In addition to the fact that IT workers will pay income tax for an amount exceeding 10,000 lei, there is another change in the Çolak government’s tax legislation (296/2023), which is interpreted differently by tax experts. Let’s not forget that these measures for IT workers are effective from November 1.
The uncertainty is related to the exemption of pensions from Level II: the rate of contributions to private pension funds, which is currently 3.75%.
Taxation experts with whom HotNews.ro spoke have two different interpretations:
1. One is that the 3.75% contribution to Tier II will not mean a higher net salary for the employee, but will go to Tier I.
2. Another interpretation is that CAS of 21.25% is payable on amounts up to 10,000 lei. That is, 3.75% belongs to the employees, and for what exceeds 10,000 lei, the CAS is 25%. In other words, it will be reflected in a higher net salary.
example, if a person has 15,000 lei, up to 10,000 lei is an exemption from income tax of 10%, to which is added an exemption of 3.75% (contribution to Level II). Income tax and full CAS of 25% is payable on the remaining 5,000 lei.
From discussions I have had with people in the government sphere, some close to the drafting of the law, the second would be the correct interpretation.
Several tax officials have sent requests to the ministry, believing that it will be effective from November 1, and do not know what to do. Most likely, a circular will be issued in this regard.
HotNews.ro sent an official request to the Ministry of Finance. We will publish it after receiving an answer.
Since the possibility to contribute a full percentage to the II level of pensions has been applied
Perhaps the strangest thing about the Act in this chapter is that IT scholars are automatically exempt from this contribution up to the second level. If they still want to transfer money to a private pension, they must submit a request to their employer.
The law states that after the application is submitted, the option becomes effective from the following month.
IT professionals must submit this application today, October 31st, to apply from November 1st. If they do it in November, then only from December they will again receive 3.75% of the pensions transferred to the II level.
Source: Hot News
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.