The procedure regarding the exemption from income tax for IT employees&employer  was modified by Order of the Ministry of Finance no. 835/2015 which replaces the old legal framework (MFP Order no. 1479/2013 – repealed). The new regulations stipulate that the employees in this sector may be exempt from income tax only if they occupy certain positions, as defined by the law.

Starting July 30, the alumni working in this sector must be in one of the eight functions, as defined in the Annex of the Order 835/2015:

• Database Administrator
• Analyst
• System Engineer in Computer Science
• Software System Engineer
• IT Project Manager
• Programmer
• Information System Designer
• Computer System Developers

In the old regulation, the provisions established that the IT employees can benefit from exemption if, besides the specific jobs, they graduated with bachelor certain specialties such as automation, mathematics, physics or chemistry informatics, cybernetics, accounting and management information systems etc.

The new regulation makes no reference to the graduate specialization, but specifies the requirement of higher education: IT employees “holds a diploma awarded after completion of a higher education long-term form or a diploma awarded after the completion of the first cycle of the collage studies, issued by an accredited higher education institution, and actually provides one of the activities listed in the Annex”, according to the Order 835/2015.

IT payroll tax – relief, eligibility, and application

The key tax change targets IT workers earning wage income, affecting their income tax exemption cap.

What's the tax break for IT salaries?

Some IT staff enjoy higher take-home pay due to income tax exemption – they don't pay the 10% income tax.

Who gets the tax break?

Under new tax rules, the exemption applies to:

1. IT sector employees earning below 10,000 lei/month (amounts over this are taxed normally, without perks, as per law).
2. Employees involved in computer program creation (research and development field).

When does the tax break kick in?

From January 1, 2024, Romania's tax rules for IT income tax exemptions have changed. The perk now only applies to gross salaries up to 10,000 lei/month/employment contract. The exemption is only valid:

1. From one employer (where the main job is registered).
2. Based on a self-declaration.

Remember:

The IT tax break only applies to income earned through December 31, 2028.

Taxes for LLCs (SRL)

IT company taxes are changing this year. For a micro company, the tax rate is now 3%.

From 2024, a positive shift reintroduces two tax rates for micro-enterprises (1% and 3%). They'll apply as follows:

• 1% for companies with revenues under 60,000 euros.
• 3% for companies with revenues over 60,000 euros or those with main or secondary activities matching CAEN codes for IT, HoReCa, legal, and medical fields.

Other conditions for the micro-enterprise regime in 2024 remain:

1. At least one full-time employee/mandate contract.
2. Income below 500,000 euros/year.
3. Consulting revenues not exceeding 20% of turnover.

As an IT entrepreneur, you must choose between:

• Micro LLC with 3% tax on total revenues.
• LLC profit tax with 16% tax on profit (beneficial if your company has many deductible expenses).

Dividend Taxes: What's New?

The dividend tax stays the same for all company types, including IT companies, at 8%.

More info mail frjacobs@telenet.be

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Taxes in 2024 for a limited liability company (srl) in Romania

Pay 1 or 3 percent taxes in Romania

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Dividend tax in Romania