Many people are waiting until February to implement the law (34/2023) that allows employers to offer employees gym memberships, money that will not be charged.

In practice, there has been a problem, particularly as the benefit also falls under the 33% of salary cap that employers can offer tax-free.

This was introduced by OG 16/2022, but it applies from January 1, 2023, and accountants noticed when they wanted to apply other possibilities, such as the appointment of pensions at will, that it could not be done in practice, because the regulation was poorly written.

In this regard, the Chamber of Fiscal Consultants sent an appeal to the Ministry of Finance to clarify the situation.

The problem concerns the corresponding amounts, that is, the distribution of 400 euros per year (for example, an optional pension or a gym membership).

Did the government want a hidden reduction in taxable value?

The CCF found that in practice there is double capping of some wage incomes and that there are significant uncertainties and difficulties in the actual calculation of wages and related budget commitments, given the level of processing as well as the amount of information required.

“At the same time, this approach leads us to the conclusion that, in fact, due to the double limitation, a disguised reduction of the non-taxable amount of income from wages, previously established by the Fiscal Code, was meant,” the message reads. CCF.

• Taking into account the cascading limit of amounts, as well as the fact that the individual limit, for example, for a non-compulsory pension carried by an economic entity, is annual, situations may arise when the entire amount of the calculation month falls under the individual limit ( but which is one per year) is subject to taxation as a result of the application of the general monthly limit of 33% of the salary for employment.

“We note that the consequences of the application of the provisions (Art. 76 paragraph (4.(1))) create significant amounts of non-taxable income in relation to the annual maximum amount, which is converted into taxable income by applying the monthly maximum amount of 33%, especially in the case of employees with low wages, but also in the case of those with high wages,” says the Chamber.

A practical example of the 33% problem.

The Chamber of Physical Consultants also gave an example, a similar situation with a gym membership.

An employee with a tariff salary of 15,000 lei has the following double benefits, according to the current provision, in January 2023:

– payment of tourist services 6789 lei, of which:

– 6789 lei (average salary)

– the amount over the individual annual limit – 0

– optional pension carried by the subject – 2000 lei

– the amount related to the individual annual limit of 2,000 lei (400 euros * 5 lei/euro)

– the amount over the individual annual limit – 0

• It should be noted that in practice both voluntary pensions and voluntary insurance contributions are paid by employers not in monthly payments, but only once a year.

• Also, the cost of travel and/or medical services, including transport, during the vacation period is not borne by the employer every month, but only once in the month in which the employee is on vacation, only on the basis of supporting documents.

In this situation, the total amount of income, taking into account the maximum amount of 33% of the tariff salary, is 8,789 lei (6,789 lei tourist services + 2,000 lei optional pension).

The marginal amount of 33% of the official salary is 33% * 15,000 = 4,950 lei.

Therefore, the difference of 3,839 is the final taxable amount because it exceeds the threshold of 33% of the full-time tariff salary, although this difference is included in the annual thresholds.

Tax procedure established by the employer:

1. Optional pension at the expense of the employer – 2000 lei

2. Calculation for tourist services – the difference of 1,839 lei to the total taxable amount of 3,839 lei.

IMPORTANTLY: In this situation, it can be seen that the entire amount related to the optional pension is taxable in January 2023, even though the annual limit of €400 has been met. Given that the monthly limit of 33% was exceeded in the first month and the full amount was accrued as a result, the employee did not benefit from the tax-free amount of €400, which is annual.

In these circumstances, the obvious question is will the €400 be carried over to February, or will the tax-free income within the €400 ceiling be considered to have been provided in January and any amount provided from February onwards be taxable?

In the text of the Fiscal Code, the Chamber of Fiscal Consultants did not define any provisions for the possibility of carrying forward amounts that exceed the upper limit of 33% during the year, or provisions for annual regularization, at least in the case of these benefits provided within the annual maximum amount already provided by law.

So the answer to this question is probably no, and in this case, The CCF believes that the introduced second limit effectively eliminates the non-taxability of income within the annual limits previously established by the same law.

To solve the problem, the Ministry of Finance should probably issue an order to amend the Fiscal Code.