Ministry of Public Finance proposes non-taxation of expenses for COVID-19 testing of employees

The Ministry of Public Finance proposed the deductibility of expenses incurred by companies or PFA for voluntary testing of employees in order to detect COVID-19, while exempting from paying contributions and taxes for these amounts, which would have been recorded as salary benefits.

MFP reminds that the Romanian state provides free testing of the population that presents symptoms of the new coronavirus, as well as for people identified as direct contacts of those who are ill and who have at least one of the symptoms of the virus.

The provision takes into account the expenses incurred by the employer or payer for the voluntary testing of employees, as the Fiscal Code did not regulate such a situation, and for those amounts companies would have been required to pay insurance contributions, which significantly increased the costs of the investigation. .

The possibility of classifying these expenses in the category of deductible expenses is granted to taxpayers who carry out the activity individually or in a form of association, for the period in which the state of emergency or alert is established.

The draft normative act proposes to complete the provisions of the Fiscal Code in the sense of introducing in the category of incomes from salaries and assimilated to non-taxable salaries and which are not included in the monthly basis for calculating social contributions of benefits representing the value of expenses incurred by employer / payer of COVID-19 infection, at the initiative of the employer / payer, for individuals who earn income from salaries and assimilated to salaries.

For taxpayers of income tax on micro-enterprises, under the current taxation system there is no regime for deducting salary expenses, therefore in their case, the value of expenses incurred by the employer for performing medical tests to diagnose COVID-19 infection, it cannot be deducted from the taxable base.

The tax regime applicable to micro-enterprise income taxpayers is similar in the case of income taxpayers according to the provisions of Title IV - Income tax of the Fiscal Code, which carries out activities for which the annual net income is determined based on income norms.