Amendments regarding the social health insurance contribution for income derived from assigning the usage of goods

by Theodor Artenie, Managing Director Schoenherr Tax Bucharest

Government Emergency Ordinance no. 88/2013 regarding the adoption of fiscal-budgetary measures for fulfilling certain commitments agreed with international organizations and amending and completing certain normative acts, published in Official Gazette of Romania, Part I brings a series of amendments regarding the social health insurance contribution.

The Emergency Ordinance introduces the obligation to pay social health insurance contribution on income derived by individuals from assigning the usage of goods (e.g. rental activities), starting 1st of January 2014:

• The applicable rate is the individual one, (5.5%). Currently, the social health insurance contribution is due on such income only under certain conditions (e.g. the recipient of the income does not derive income from wages, certain income from independent and agricultural activities);

• The monthly contribution base is defined. Minimum and maximum limits are set as follows: the minimum is the level of the gross national minimum wage (if it is the only income for which the contribution is paid) and the maximum is five times the average salary per economy;

• The recipients of the income have the obligation to make advance payments for the social health insurance contributions, except for those who derive income from land leasing, for which special rules apply;

• New regulations are introduced regarding the manner of determining and reporting the new contributions in the fiscal declarations/the tax decisions, and performing the annual regularization of the taxable income. The responsibility for fulfilling these procedures is also set.

The Emergency Ordinance also brings amendments to Law no. 95/2006 regarding the reform of the healthcare system and to the Methodological Norms establishing the sup-porting documents for acknowledging the status of insured person (Order no. 617/2007), with the purpose of correlating these pieces of legislation with the new provisions of the Fiscal code.