1. Personal deduction. Supported persons. Statements and justifying documents
   • Personal deduction

 According to the Fiscal Code applicable starting to this year, the procedure for calculating the personal deduction is modified starting with January 1^st 2016. Personal deduction is granted for individuals deriving a gross monthly salary up to 1.500 lei (included), as it follows:

• tax payers without supported persons – 300 lei;
• tax payers with one supported person – 400 lei;
• tax payers with two supported persons – 500 lei;
• tax payers with three supported persons – 600 lei;
• tax payers with four or more supported persons – 800 lei.

For the gross incomes derived from salaries between 1.501 lei – 3.000 lei, the value of the personal deduction is, as previously, decreasing in comparison with those above and it is determined through an order of the public finance minister.

 Consequence: For the salaries that do not overcome the 3.000 ron ceiling, the withheld income tax is diminished simultaneously with the increase of the value of personal deduction, the final result being the increase of the net salary.

• Supported persons

According to the provisions of the Fiscal Code, the personal deduction is determined according to the gross monthly income from salaries derived at the main job by the tax payer and the number of persons supported by the tax-payer. 

The obligation of determining the persons supported by an employee – situation according to which the personal deduction is calculated – is the duty of the employer (if there are more than one employers, the obligation belongs to the principal employer). The supported  person may have or not a common domicile with the tax payer supporting him/her.

Pursuant to the law there are considered supported persons the spouse and children of the tax-payer, and other family members up to second grade (relatives of the tax-payer or of his/her spouse up to the second grade included). If the income of a supported person surpasses 300 lei/month, he/she is not considered supported.

According to the new legal provisions applicable starting with this year, if a person is supported by more than one tax-payer, the amount representing the personal deduction is attibuted to one sole tax-payer, according to the understanding between the parties.

Exception: For the underage children of the tax-payers, the amount representing the persoanl deduction is granted to each tax-payer legally supporting them.

If in a family there are more children to be supported, excepting underage children, those children will be registered in the support of one of the parents, according to ther understanding between the parties. In such situations the tax payers will fill in to the income payer a self-responsibility statement from the spouse or a certificate issued by the salary income payer of the spuse, according to each situation, attesting the number and the identity of the children registered for support by each spouse.

• Statements and justifying documents

For the establishing of the personal deduction he/she is entitled to, the tax-payer will fill in at the payer of the salary income a statement on self-responsibility, that must contain the following information:

• identification data for the tax-payer who derives incomes from salaries (name and surname, domicile, personal identification code);
• identification data for each supported person (name and surname, personal identification code).

For supported children that are not minors, the tax-payer deriving incomes from salaries must add to the mentioned statement the certificate from the salaries income payer of the spouse or the statement on self-responsilibity of the spouse that they do not benefit by a personal deduction for that child.

You will find attached to this tax alert drafts for documents helping you for determining the situation of the persons supported by the employees of your company.  

2. Gross minimum national basic salary guaranteed for payment starting with May 2016 – Decision no. 1017 from December 30^th, 2015

Starting with May 1^st 2016, gross minimum national basic salary guaranteed for payment is established at 1.250 lei per month. Establishing basic salaries under the level of 1.250 lei, for staff employed through an individual employment agreement, represents a contravention and it is sanctioned with a fine from 1.000 lei to 2.000 lei.

3. Average gross salary used for establishing the insurance budget for the year 2016

The gross average salary used for establishing the budget of national social insurance for 2016 is of 2.681 lei.

Starting with 01.01.2016, the amount for funeral payments is established as it follows:

a) for the insured person or for the retired person at 2.681 lei;

b) for a family member of the insured person or of the retired person at 1.341 lei.