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Law No. 32 Of 29 March 1991 Concerning The Tax On Wages

Original Language Title:  LEGE nr. 32 din 29 martie 1991 privind impozitul pe salarii

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LEGE No. 32 of March 29, 1991 *** on the payroll tax
ISSUER PARLIAMENT
Published in OFFICIAL MONITOR NO. 185 of 2 August 1996



Note * *) Republicated pursuant to art. IV of Government Ordinance no. 8 8 of 23 January 1996 , published in the Official Gazette of Romania, Part I. no. 21 21 of 30 January 1996. Law no. 32 32 of 29 March 1991 was published in the Official Gazette of Romania, Part I, no. 70 70 of 3 April 1991 and has been amended by Law no. 46 46 of 4 July 1994 , published in the Official Gazette of Romania, Part I, no. 171 171 of 6 July 1994, by Government Ordinance no. 17 17 of 4 August 1996 , published in the Official Gazette of Romania, Part I, no. 186 186 of 17 August 1995 (approved and amended by Law no. 122 122 of 15 December 1995 , published in the Official Gazette of Romania, Part I, no. 293 293 of 19 December 1995), by Law no. 135 135 of 29 December 1995 , published in the Official Gazette of Romania, Part I, no. 303 303 of 30 December 1995 and by Government Ordinance no. 8 8 of 23 January 1996 , published in the Official Gazette of Romania, Part I, no. 21 21 of 30 January 1996 (approved and amended by Law no. 54 54 of 21 June 1996 , published in the Official Gazette of Romania, Part I, no. 134 of 27 June 1996) and has been republished in the Official Gazette of Romania. Part I, no. 140 140 of 29 June 1993 and no. 19 19 of 26 January 1996. + Article 1 Incomes in the form of salaries and other salary rights made by Romanian or foreign individuals, on the territory of Romania, are subject to tax according to the provisions of this law. Salaries made on the territory of Romania are considered salaries paid in money and in kind, received by employees from natural or legal persons who have their domicile or headquarters on the territory of Romania, as well as salaries received from abroad by persons operating in Romania. They are not subject to the provisions of 1 and 2 salaries and allowances in foreign currency, established in the net amount, paid by Romanian public institutions to staff, Romanian who operate within diplomatic missions, consular offices and other forms of representation of Romania abroad. + Article 2 Income in the form of salary and other taxable salary shall include all amounts received during a month, irrespective of the period to which they relate and which are made of: a) salaries of any kind; b) bonuses of any kind; c) allowances of any kind; d) rewards and prizes of any kind; e) the amounts paid from the social security fund in case of temporary incapacity for work and maternity; f) the amounts paid for the holiday; g) any other earnings, in money and in kind, received as payment of their work, from natural or legal persons, as the case may be, to which they are employed, including those granted under the collective agreement, except those in kind granted employed household staff; h) amounts paid to employees in the form of indexation or compensation, as a result of higher prices and tariffs; i) the amounts paid to the founding members of a company, constituted by public subscription, of the share of participation in net profit, according to art. 30 30 of Law no. 31/1990 31/1990. The evaluation of the products granted as payment in kind is made at the sales price charged by the unit for the products of their own production and at the price of supply, for other products, and in the case of services, on the basis of services. Prices and tariffs are those charged on the date of payment in kind. + Article 3 By way of derogation from the provisions of the previous article, salaries and other salary rights or differences thereof, paid in the past, shall be broken down for the purpose of imposition, on the months to which it relates, cumulating with the other rights received in the months in the following situations: a) in the case of a final judgment; b) as a result of the application of 15 15 of this Law; c) in case of impossibility of monthly payment of salaries as a result of the lack of available in the bank accounts of the payer; d) in case of completion of settlements on the basis of research and design contracts; e) in the case of allowances related to holiday leave, when its duration is carried out for a period of more than one calendar month; f) in the case of amounts paid on the basis of art. 2 lit. i); g) in the case of differences in salaries that concern periods prior to the months in which they are paid, granted on the basis of normative acts on pay. The amounts representing the annual prize awarded, according to the law, to the staff of public institutions, those representing the incentives from the profit participation fund, granted according to the law, to the employees of economic agents and managers the balance sheet, as well as the amounts granted, according to the law, for non-performance of the holiday shall be taxed, according to the provisions of this law, separate from the other rights granted in the month in which their payment takes place The monthly salary rights obtained by the teaching staff at the same unit, outside the salary corresponding to the teaching norm related to the basic function, shall be taxed separately, without applying, in their case, the provisions of art. 7 lit. c). + Article 4 It is taxed, under the conditions of this law, the following rights in money and in kind, due to individuals: a) earnings of day labourers or temporary employees; b) the fees collected by lawyers through bars; c) the rights due to doctors and health personnel in paid polyclinics; d) gains made from collaborations of any nature; e) the fees collected from the expertise of any kind; f) due rights for inventions and innovations. The amounts paid for inventions and innovations in the course of a calendar year shall be broken down for the 12 months of the year, cumulating with other rewards of this nature paid by the unit during that year, even if the value they are related to a period of more than one year. Where the amount paid is related to a period of less than one year, it shall be broken down for the months to which it relates. These rights are not cumulated, for taxation, with the other incomes made at the unit where the employees have the basic function. + Article 5 The incomes made by individuals resident in Romania, in the form of salaries, as well as other money rights of the nature of salaries, for activities carried out abroad, are required with the quotas and under the conditions provided by art. 8. + Article 6 Shall not be included in the taxable monthly income and shall not be required: a) the amounts paid on the basis of employment contracts, statutes or legal provisions, on the occasion of moving or transferring in the interest of the service of an employee to another locality, the amounts paid for the coverage of travel expenses in the interest of the service, as well as the allowances payable on the basis of the service; b) the amounts received by employees for work performed during the period of the dismissal notice, as well as the compensation granted to the employees made redundant on the occasion of the restructuring of economic agents, regardless of the form of ownership. The conditions for granting compensation not subject to payroll tax shall be adopted by Government decision; c) social aid and other aid granted, according to the law, from the state social insurance budget, except for the amounts paid according to art. 2 lit. e), from the state budget and from the local budgets or from the special funds established according to the Public Finance Law *), as well as the aid granted from the salary fund to the mothers employed for births and in case of death of the employees; d) pensions of any kind; e) allowances, allowances and any amounts of this nature, granted, according to the law, to persons with children, except those from art. 2 lit. e), as well as the maintenance allowances granted to persons who have been given family placement or have been entrusted with minors; f) free meal and antidote nutrition, granted in kind according to the law; g) gains in kind referred to in art. 2 lit. g) currently granted to employees by autonomous regions receiving subsidies for products and activities from the state budget, as well as those granted according to the law by public institutions financed from the state budget; h) amounts representing the contribution for the additional pension and the contribution due by employees to the fund for the payment of unemployment benefits, established according to the ------------------------ Note * *) Law no. 72/1996 on public finances, published in the Official Gazette of Romania, Part I, no. 152 152 of July 17, 1996, repealed Law no. 10/1991 10/1991 on public finances. + Article 7 The following categories of persons are exempt from the tax provided by this law: a) foreign press correspondents, for the salaries they receive, under the condition of reciprocity; b) students, students and doctoral students, for scholarships; c) persons who, during the same month, earn income in the form of basic salaries and other salary rights of up to 97,000 lei * *), from the unit where they have the basic function. In the case of the increase, by normative acts, of the level of the minimum gross basic salary per country, the above amount is amended accordingly; ------------------------ Note ** **) See Government Decision no. 594 594 of 22 July 1996 , published in the Official Gazette of Romania, Part I, no. 162 162 of 25 July 1996. d) war veterans, war widows and unmarried widows of war veterans; e) the descendants of the heroes-martyrs of the Revolution, as well as the holders of the title of Fighter for the Victory of the Romanian Revolution of December 1989, conferred by patent, for the incomes made within the basic function f) military in term, students and military students, for the money rights received; g) invalids of first or second degree with right of work, according to the legal provisions, as well as handicapped persons within the first or second degree of invalidity, defined according to Law no. 53/1992 on the special protection of handicapped persons, only on the basis of certificates issued by the commissions of medical expertise and work capacity recovery, under the conditions provided by law, and certifying that the invalidity does not prevent in the exercise of the profession or function. The issuance of certificates of attestation of the state of invalidity or of handicapped person shall be made only by the commissions of medical expertise and work capacity recovery. The exemption from the payment of the tax is granted only for the incomes made by the employees to the unit to which they have the h) persons referred to in art. 4 of Decree-Law no. 118/1990, republished, for the income made by them at the unit to which they have the basic function. The provision shall also apply to persons who, on the date they were in one of the situations referred to in art. 1 of Decree-Law no. 118/1990, republished, were minor; i) foreign individuals who carry out in Romania consultancy activities in the framework of free financing agreements, concluded by the Government of Romania with other governments or international governmental or non-governmental organizations; j) blood or plasma donors, for the amounts received by them, representing the value of days off granted, according to the law, for the donation of blood or plasma; k) athletes, coaches and sports technicians for the first awarded as a result of achieving the following high performance objectives: -ranking on the award podium of the world, European and Olympic Games; -qualification and participation in the European, world and Olympic Games; -participation in the upper stages of European club competitions, starting with the round of 16. The exemptions from the payment of the tax shall be granted starting with the salary rights related to the month following the month in which the persons concerned register the requests by which the supporting documents are submitted certifying the fulfilment of the conditions The revision of certificates of attestation of the state of invalid or of handicapped person is made within 60 days *) from the publication in the Official Gazette of Romania Government Ordinance no. 17/1995 , the period during which they maintain the validity of their previously issued and unexpired certificates. Exemptions provided in lett. d), e), g) and h) shall be granted only within the limit of a gross monthly income of up to 6 times the minimum gross basic salary per country. If this limit is exceeded, the tax is calculated on the total amount from which the tax related to the 6 gross minimum wages per country is deducted. ------------------------- Note * *) art. II of Government Ordinance no. 8 8 of 23 January 1996 : -The 60-day deadline stipulated by Government Ordinance no. 17/1995 , approved by Law no. 122/1995 , respectively 17 October 1995, provided for the revision of certificates of attestation of invalidity or disability status, shall be extended until 31 March 1996, under the following conditions: a) persons who present themselves in this new term for the revision of certificates and fall within the criteria provided by law to receive a new certificate entitling the tax exemption on salary and receive such a certificate will benefit from this exemption from the date of entry into force of this Ordinance; b) for persons to whom, presenting themselves within the new term provided by this ordinance to the commissions of medical expertise and work capacity recovery, they are no longer recognized, according to the criteria established by the legal provisions in This facility shall cease from the date of the first of the month in which it was presented to the Commission, within one of the categories of persons entitled to benefit from the exemption. + Article 8 The payroll tax is calculated monthly, on each job, on the totality of income realized in the month expired by each employee, based on the following quotas: Monthly taxable income *) Monthly tax * *)-lei-lei-up to 10.4005% 10.401-11.500520 + 8% for what exceeds the amount de10.400 lei 11.501-15.400608 + 14% for what exceeds the amount of 11,500 lei 15.401-26.3001.154 + 17% for what exceeds the amount of 15,400 lei 26.301-42.8003.007 + 18% for what exceeds the amount of 26,300 lei 42.801-63.9005.977 + 19% for what exceeds the amount of 42,800 lei 63.901-108.0009.986 + 20% for what exceeds the amount of 63,900 lei 108.001- 150.70018.806 + 21 %for what exceeds the amount of 108,000 lei 150.701-214.20027.773 + 22 %for what exceeds the amount de150.700 lei 214.201-321.20041.743 + 25% for what exceeds the amount of 214.200 lei 321.201-429.30068.493 + 28% for what exceeds the amount of de321.200 lei 429.301-535.90098.761 + 32% for what exceeds the amount of 429,300 lei 535.901-613.600132.873 + 36% for what exceeds the amount of 535,900 lei over 613.600160.845 + 40% for what exceeds the amount of 613,600 lei ---------------------- Note **) The taxable income tranches and the tax rates applicable from the payment of the salary rights for July 1996 are reproduced as approved by the Government Decision no. 542 542 of 5 July 1996 , published in the Official Gazette of Romania, Part I, no. 143 143 of 8 July 1996. The share of the total taxable monthly income exceeding the level of 1,148,400 lei * **) is required with the share of 60%. If, by applying these tax rates, the net monthly income of an employee, realized in the unit where he has the basic function, would be reduced below the level of income provided in art. 7 lit. c), the tax is reduced so as to ensure the realization of that income. In the case of salaries and other salary rights, as well as some money rights (as mentioned in art. 2 and 4 of this law), in foreign currency, the tax due is calculated by converting into lei, at the exchange rate in force on the last day of the month for which the payment is made, after which the tax in lei, established on the basis of the quotas 1, turns, retains and flows to the state budget in foreign currency, at the same course. With the indexation, as well as in the case of granting compensation to salaries, the Government will properly modify the taxable monthly income tranches provided in par. 1, the level of the amount set at 2 and 3 of this Article, as well as of the amount referred to in art. 7 lit. c) of this law, in order not to cancel the effect of indexation or compensation granted. ---------------------- Note *** ***) See Government Decision no. 542/1996 . + Article 9 The payroll tax is calculated by their payers and is withheld monthly from the amounts due to the second chenzina. For money rights in the category of those provided in art. 4 of this law, the tax is calculated and withheld at each payment, by cumulation with the amounts previously paid during the same month, by the payer. If the payer has a bank account, the tax is withheld and paid once the amounts are raised for the payment of the second chenzine. Banks are obliged to check, on the occasion of lifting the amounts for payment of salaries in the country or to or from abroad, the detention and payment to the budget of the central public administration of the payroll tax. + Article 10 The Romanian individual has the right to deduct from the payroll tax due in Romania an amount equivalent to the salary tax from the external source, paid directly or by withholding abroad, on the basis of documents certifying the payment, confirmed by the tax authorities of the country in which they operate. This amount will not exceed the amount of the payroll tax, calculated according to the tax legislation in force in Romania. + Article 11 The salary tax withheld in addition shall be returned to the employees concerned by their payer within 30 days from the date of the finding of the surplus. The refund of the amounts retained in addition can be made for a period of 3 years ago from the date of detention. The tax on unpaid wages on time or in the legal amount shall be retained by the payer of the income, from the respective employees, for a period of 3 years from the date of the finding. The retention can be made, in equal installments, no later than 12 months after the date of finding the non-dealers. If the payroll tax can no longer be recovered from the employee in question, it shall be borne by the payer of the salary. + Article 12 Natural or legal persons, who in the exercise of their activity use employees, are obliged to submit half-yearly to the financial body within which they have their headquarters or domicile a report on the calculation, retention and payment of the budget central public administration of payroll tax. Economic agents with special profile, defined according to the law, will submit this report to the Ministry of Finance. + Article 13 For the term non-burning of the payroll tax an increase of 0.3% is applied for each day of delay *). ------------------- Note * *) See Government Ordinance no. 11 11 of 23 January 1996 , published in the Official Gazette of Romania, Part I, no. 23 23 of 31 January 1996. + Article 14 The control on the calculation, retention and payment of the payroll tax shall be carried out by the tax authorities to which the payers of salaries are obliged to submit the reports on the calculation, retention and payment of the payroll tax. + Article 15 Against the way in which the provisions of this law are applied by the natural or legal persons to which they are employed, the employees can address with direct complaint to them, within 30 days from the date of withholding tax. The natural or legal person who made the employment is obliged, within 30 days from the date of registration of the complaint, to proceed with the recheck of the determination of the taxable monthly income and the payment tax and to issue a decision containing the results of the recheck. The decision will be communicated to the employee concerned. + Article 16 Within 30 days of the communication of the decision given by the one who made the employment, the employee may appeal to the general directorate of public finances and state financial control, in whose territorial area he has his domicile or the headquarters of the natural or legal person whose employee is, who is obliged to resolve it within 30 days of registration. The resolution of the appeal is made by a decision that is communicated to the employee concerned. Within 30 days of communication, against the decision given by the general direction of public finances and state financial control, the employee can appeal to the Ministry of Finance, which, within 40 days of registration, is forced to settle it. The solution given by the Ministry of Finance is final and communicated to the employee concerned. + Article 17 Appeals and calls for payroll tax are exempt from the stamp duty. + Article 18 The Ministry of Finance may grant, in duly justified cases, instalments or deferrals to the payment of tax on salaries and instalments, deferrals, discounts or exemptions to the payment of late increases. + Article 19 It constitutes the following facts, if, according to the criminal law, they are not considered crimes: a) non-submission, within 30 days from the end of the semester, of the account on the calculation, retention and payment of the payroll tax; b) the refusal to provide the tax authorities with the documents on the way of calculating, retaining and shedding the state budget of the payroll tax. The contravention of lit. a) is sanctioned with a fine from 200 000 lei to 1.000 1.000 000 lei, and the one from lit. b), with a fine of 600 000 lei to 2 000 000 lei. The finding of contraventions and the application of the fines provided by this law shall be made by the specialized bodies of the Ministry of Finance and by its territorial units, within 3 years from the date of the commission of the respective facts. The finding documents drawn up by the authorized bodies to find and impose fines constitute enforceable securities, under the law, after their final stay. Banks will implement these securities without the acceptance of payers. + Article 20 Provisions Law no. 32/1968 on the establishment and sanctioning of contraventions, except art. 25, 26 and 27, shall apply in the case of contraventions provided in art. 19 19 of this law. + Article 21 Until the date of entry into force of this law, the Ministry of Finance will develop methodological instructions on the calculation technique of payroll tax, appropriate formulary, duties and responsibilities of tax bodies on the application of this law, which will be published in the Official Gazette of Romania *). ----------------------- Note * *) See Order no. 1.363 1.363 of 10 November 1993 of the Minister of State, the Minister of Finance, published in the Official Gazette of Romania, Part I, no. 273 273 of 26 November 1993. + Article 22 Appeals pending in the judicial, administrative or judicial bodies shall be settled in accordance with the legislation in force at the time of the finding of the act. + Article 23 In situations where, in order to avoid double taxation, there are conventions or other international agreements to which Romania is a party, the provisions of those conventions or agreements shall apply on salaries. + Article 24 On the date of entry into force of this Law, the Law no. 1/1977 on the tax on the total retribution fund to the socialist state units, art. 16 16-18 of Law no. 2/1977 on agricultural tax, art. 3 3 of Law no. 4/1990 on the remuneration and other rights of the President of Romania, senators and deputies, art. 9 9 and Annex no. 2 2 of Decree no. 279/1983 on the regulation of healthcare with payment, Decree no. 409/1985 on increasing the contribution of persons without children art. 3-7 3-7, 9 and 10 of the Decision of the Council of Ministers no. 545/1970 on the regulation of taxes on population incomes, art. 7 7, art. 14 14 para. 3 3 and Annex no. 3 3 of Government Decision no. 1.222/1990 on the regime of taxes and duties applicable to Romanian representations of companies or foreign economic organizations, Government Decision no. 52/1991 on the payroll tax, as well as any other provisions to the contrary * *). -------------------- Note ** **) On the date of entry into force Government Ordinance no. 17 17 of 4 August 1995 , published in the Official Gazette of Romania, Part I, no. 186 186 of 17 August 1995, shall be repealed: 7 7 para. 4 4 and art. 20 20-27 of Law no. 32/1991 on the payroll tax, republished in the Official Gazette of Romania, Part I, no. 140 of June 29, 1993; provisions on taxation of individuals from Government Ordinance no. 22/1993 on the exemption for payment of tax on income made by foreign consultants for the activity carried out in Romania, within the framework of international governmental or non-governmental agreements Official Gazette of Romania, Part I, no. 209 of August 30, 1993, approved by Law no. 102/1994, published in the Official Gazette of Romania, Part I, no. 321 of 18 November 1994; art. 8 lit. l) of Law no. 42/1990 for the honor of the heroes-martyrs and the granting of rights to their descendants, to the injured, to those who were detained from 16 to 22 December 1989 as a result of participation in the actions of the revolution, as well as those who participated directly, from 16 to 25 December 1989, to the battles for the victory of the Revolution of December 1989, republished in the Official Gazette of Romania, Part I, no. 204 of August 21, 1992; the provisions on the payroll tax from art. 6 6 para. 1 of Decree-Law no. 118/1990 on the granting of rights to persecuted persons for political reasons of dictatorship established with effect from March 6, 1945, as well as those deported abroad or constituted in prisoners, republished in the Official Gazette of the Romania, Part I, no. 310 of November 7, 1994; the provisions on the payroll tax from art. 15 lit. e) of Law no. 44/1994 on war veterans, as well as some rights of invalids and war widows, published in the Official Gazette of Romania, Part I, no. 172 172 of 7 July 1994 and art. 11 11 para. ((3) of Law no. 4/1995 on blood donation, therapeutic use of human blood and transfusion organization in Romania, published in the Official Gazette of Romania, Part I, no. 9 9 of 19 January 1995. + Article 25 This Law shall enter into force on 1 April 1991 * **). ------------------ Note ***) See also the dates of entry into force of the amending normative acts. ---------------------