Tips are taxable from the beginning of the year. Basically, it is taxed at a rate of 10%. However, as the Act was written, people actually leave larger tips. Dan Schwartz, managing partner of RSM Romania, explained why.
“We’ve been trying to fix this problem we’ve had for years. The fact that it was regulated (the advice was not) is to be applauded. The details are not the most appropriate,” he said at the TaxEU forum.
- For example, amounts given as tips are not included in the database of social contributions for an individual and are not included in the tax base (profit/income tax or VAT of the taxpayer).
“Question: When you put a 10% tip on the bill, is that on the price with or without VAT? If it is for someone who has VAT, why give a tip, which the tax payer should remit to the government?” he asked.
This means, says Dan Schwartz, that 10% tip turns into 11-12%.
“It should be borne in mind that we tip more because it is added to the VAT price of Horeca products,” the expert explained.
Photo source: Dreamstime.com
Source: Hot News
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