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Romania Confirms Income Tax, Social Security Plans

by Ulrika Lomas, Tax-News.com, Brussels

03 August 2017


Romania's Ministry of Finance has confirmed that planned changes to personal income tax and social security contributions are going ahead, despite the recent cancellation of key parts of the Government's tax plan.

The ministry said in a statement released on July 27 that as part of the Governance Program for 2017-2020, social security contributions will be reduced from 39.25 percent to 35 percent, and will be paid solely by employees from January 1, 2018, instead of by employers. However, employers will be responsible for withholding and remitting the tax.

In addition, the Government will also proceed with plans to replace the existing 16 percent flat tax on individual income with a 10 percent tax on total household income, minus certain deductions.

The ministry's announcement responds to calls from taxpayers for clarification of the Government's tax reform plans after Prime Minister Mihai Tudose told reporters on July 25 that proposals to replace corporate tax with a progressive tax on turnover had been cancelled. Tudose also confirmed that a solidarity tax on incomes above RON13,600 (USD3,740) would also no longer be introduced.

TAGS: Finance | tax | employees | Romania | social security | tax reform | individual income tax

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