PFAs will be hit hard by the PSD-PNL coalition because of the tax change. First of all, contributions to CAS and CASS, because for now they will be tied to the minimum wage, they will automatically increase from this point of view only.

See: OFFICIAL What tax increase the PSD-PNL coalition envisages. What the DOCUMENT project looks like

It is expected that the minimum salary on January 1, 2024 will be at least 3,500 lei (from October 1, it will be 3,300 lei).

In the calculations, we will take the minimum gross salary for 2024 – 3,500 lei.

Regarding CASS…

CASS remained on the basis of the calculation between 6 salaries and 60 salaries of net income, respectively annual rate of income, accordingly adjusted annual rate of income.

Any PFA that will be created will have to submit a calculation base of at least 6 minimum salaries (21,000 lei) in the Unified Declaration and pay CASS at the rate of 10% – 2,100 lei until May 25 of the following year.

Those PFAs that have income from:

a) wages and wage equivalents at a level at least equal to the 6 minimum wages in each country in force during the period in which the income was received; or

b) from the provisions of Art. 155 para. (1) lit. c) – h) (rent, dividends, interest, stock exchange, cryptocurrency, other sources) for which they must pay social health insurance contributions at a level at least equal to 6 minimum salaries before gross in each country.

If a PFA has an income from independent activities of more than 60 salaries (210,000 lei) and from (dividends or rent or stock market, cryptocurrency, etc.) more than 24 minimum salaries, it will end up paying CASS in the amount of 84 minimum salaries (i.e. at 294,000 lei – a share of 10% will be 29,400 lei).

In other words, almost 30,000 lei/year ONLY contribution to CASS.

I argue this below:

We are talking about a CASS in a PFA with an income of, say, more than 60 salaries (210,000 lei), which also has a dividend of more than 24 salaries.

I quote: “Article 170 – Basis for calculation of contribution to social health insurance, which is paid by natural persons who receive the income provided for in Article 155, paragraph (1) letters b) – h) (1) Natural persons who receive the income provided for in Art. 155 paragraph (1) letter b), from one or more sources, must pay a social health insurance contribution on an annual basis equal to the annual realized/gross net income or the annual rate of income, according to the annual rate of adjusted income, depending on the circumstances, established in accordance with articles 68, 68^1 and 69, depending on the circumstances, which cannot be higher than that which corresponds to the annual basis of calculation, which is equal to the level of 60 minimum wages for the year. of the country in effect at the time of submission of the declaration provided for in Article 120. When determining the annual basis for calculating the contribution to social health insurance, the annual tax losses provided for in Article 118 are not taken into account.

(in the letter b independent activity of PFA, liberal professions)

(2) Natural persons who receive income provided for in Art. 155 para. (1) lit. c) – h), from one or more sources and/or categories of income, pays the social health insurance contribution to the calculation base established in accordance with para. (5), if he assesses the income of the current year, the total value of which is equal to at least 6 minimum gross salaries per country, valid for the deadline for submitting the declaration, provided for in Art. 120″.

(under the letter ch: dividends, rent, profit from the stock exchange, cryptocurrency, interest, etc.)

(5) The annual basis for calculating the contribution to social health insurance for persons who receive income from the income provided for in Art. 155 para. (1) lit. c) – h) represents:

• a) level 6 of the minimum gross wages per country, effective at the time of submission of the declaration, provided for in Art. 120, in the case of incomes from 6 minimum salaries per country up to and including 12 minimum salaries per country;

• b) the level of 12 minimum gross salaries per country, valid for the deadline for submission of the declaration, provided for in Art. 120, in the case of incomes from 12 minimum salaries per country up to and including 24 minimum salaries per country;

• c) the level of 24 minimum gross salaries per country, valid at the time of submission of the declaration, provided for in Art. 120, in the case of earned income at least equal to 24 minimum gross wages per country.”

Who will say that CASS will pay like this:

• 60 salaries x 3,500 x 10% = 21,000 lei per PFA

• 24 salaries x 3500 x 10% = 8400 lei in dividends

There is no provision that if you pay from PFA of 24 salaries on top of other income (dividends, rent, stock, interest) you are exempt from tax because you have already ‘contributed’ 24 salaries, in fact you have paid more on .. .60 salaries!

Nowhere in the law is it written that those from Art. 155 letter b with those from the letters ch.

They are considered separately.

Regarding CAS…

A new self-employed (PFA) CAS limit of 36 wages has been introduced, on top of the 12 and 24 that currently exist.

Practically, if it exceeds 36x 3500 = 126,000 lei / year. 25% CAS will be paid, i.e. 31,500 lei compared to 21,000 lei now.

In other words, a PFA with an income of more than 60 salaries will pay ONLY from social contributions (31,500 CAS, 21,000 CAS) an amount of 52,500 lei per year, i.e. 10,000 EUR from only social contributions in addition to 10% tax.

If he has other categories of income that I mentioned above (rent, dividends, stock exchange, cryptocurrency, interest, other sources), he “contributes” to CASS another 10% for 24 salaries, that is, 8400 lei.

Under these conditions, such a form of organization as PFA no longer has any reason to be chosen by an entrepreneur, a micro-enterprise is by far the best solution.

N.red: Cornel Grama is a tax consultant from Cluj and one of the founders and administrators of the Tax Consultants Association and the Tax Consultants Facebook Group with over 44,000 members. Its services cover the following areas: preparation of tax and tax declarations, assistance in tax matters and budgetary claims, representation in tax authorities, education and training in the tax field. The opinions expressed in this article belong solely to the author.