Changes to the taxation of PFA and rental income under the Coalition’s new tax hike bill. Fiscal consultant Cornel Grama made a brief analysis of the news from this document presented by HotNews.ro.

Cornell Grama is a tax consultantPhoto: Hotnews / Florin Barbuta
  • The latest tax increase project is a DOCUMENT

What tax changes are planned for PFA

Cornell Grama presented 4 changes:

1. CASS will be paid on the basis of net income, not on the maximum amount as it was before this year (the upper limit of 12.06.24 remains for other categories of income).

Basically, for self-employed activities, taxation increases by another 10% on top of the current 10% tax.

2. CASS will not be paid less than 10% based on 12 minimum wages with the following exceptions:

  • received income from:

– salary and salary equivalents at a level at least equal to 12 minimum gross salaries in each country, valid during the period in which the income was received; or

– from the provisions of Art. 155 para. (1) lit. c) – h), for which he has social health insurance contributions at a level at least equal to 12 minimum wages in the country (that is, he has income from dividends, rent, interest, investments in the stock market and other sources)

3. Introduced a new CAS ceiling for independent activities (PFA, liberal professions) of 36 post salaries in addition to the 12 and 24 that currently exist.

Practically, if it exceeds 36x 3000 = 108,000 lei/year, 25% CAS will be paid, i.e. 27,000 lei compared to 18,000 lei now.

Note: I took the current minimum wage of 3,000, but it is being discussed that it will increase to 3,300 from October, and possibly to 3,500 lei from January 1, 2024.

And then, he says, the calculations are even more terrible: 3500 x 36 = 126,000

CAS 2024: 126,000x 25% = 31,500 compared to 21,000 under current law.

4. The possibility of redirecting the 3.5% tax to a non-profit organization (NGO, association, fund) has been cancelled.

What are the rent changes?

Even those with rental income need to be careful. According to Grama, the changes mentioned in the project:

1. Net profit will be calculated by subtracting 20% ​​of flat-rate expenses from gross revenue (currently, net revenue is equal to gross revenue)

2. If an individual rents housing from a company or a PFA, the company withholds the tax calculated in accordance with paragraph 1 and declares and pays it to ANAF every month by the 25th of the month following the payment of the rent.

3. The possibility of taxation in the real system is eliminated