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New tax incentives for teleworking

The December amendment of Law 227/2015 – Tax Code, provides for the addition of the list of non-taxable income.

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Although Romania is the EU country with the least number of employees working on the basis of telework, the situation could soon change thanks to state support through the new tax regulations.

The December amendment of the Law 227/2015 – the Tax Code, provides that the list of non-taxable income is supplemented by the amounts granted to employees operating on the basis of telework in order to cover service expenses at the place where the employees are active, such as electricity, heating, water and data subscription, and the purchase of office furniture and equipment up to 400 lei per month.

We propose to look into some important aspects of the application of this regulation.

  • the regulation is not binding on employers who have employees working on the basis of teleworking and sets the maximum limit, which means that the amount we refer to may be less than 400 lei/month;
  • the purpose of this aid is to cover service expenses at the place where employees work, such as electricity, heating, water and data subscription, and the purchase of office furniture and equipment;
  • the aid may be granted only to employees working as teleworkers in accordance with the law; the ceiling, terms and structure of such support must be laid down in the worker’s contract of employment or by means of an amendment to the individual contract;
  • the actual amount that the employee will receive must be calculated by aligning the ceiling with the number of days in the month in which the employee was engaged in a teleworking activity;
  • the employee is not required to provide supporting documents;
  • the amounts received are deductible expenses for the employer and are non-taxable income for the employee. No social contribution will be calculated and deducted for such employee benefits;
  • the tax exemption for those amounts shall apply with effect from the revenue for January 2021;
  • the amounts attributed to employees under this title, even if governed by the individual employment contract or the amendment, are not disclosed in Revisal and are not taken into account in determining other remuneration rights, e.g. in the calculation of any amount of allowances or allowances.

For the sake of clarity, transparency in the case of ANAF controls and ease of implementation, we recommend that companies that have employees working on telework agreements and want to grant such facilities, lay down in the internal rules the maximum amount that may be granted, the criteria for granting the aid and the rules for payment of the aid.

We are tempted to believe that teleworking will become normal for Romania even after the health crisis caused by the pandemic that we are experiencing, and employers will be encouraged to find solutions to get as many employees as possible into this scheme of work.