The order providing for the exemption from payment of tax on income from salaries and similar salaries for employees carrying out activities whose object of activity includes the creation of computer programs (CAEN code 5821, 5829, 6201, 6202, 6209) was published in the Official Gazette.
By the provisions of this Order, initiated by Ministry of Research, Innovation and Digitalization, benefits equally both employees in public and private institutions.
The order brings a series of important changes targeting IT employees in public institutions. We list some of the relevant aspects of this order and how they will contribute to Romania's digital transformation:
1. Income tax exemption: Good news for IT employees working in public institutions! The new order clarifies that they will benefit from the exemption from paying income tax on income from salaries and similar salaries. This measure aims to attract and retain ICT specialists in public administration, accelerating the country's digitalization process.
2. The areas of activity of the departments from which the position must be taken have been expanded.: the position may be part of a department that has as its object of activity at least one of the following areas, highlighted in the organizational chart or outside the employer's organizational chart: information and communications technology, artificial intelligence and emerging digital technologies, electronic tax administration, databases, e-government services and digital transformation;
3. It also applies to employees outside the organizational chart.
4. Applicability of the order in local public institutions: The Order also applies to personnel employed in local public institutions, in accordance with the definition provided in Law no. 273/2006. This eliminates ambiguities related to the application of the provisions within the local public administration.
5. Duration of application of the exemption: The tax exemption applies for the entire period in which the employee actually carries out the activity of creating computer programs. This is established by administrative act of the head of the public institution.
6. The exemption applies for the entire duration of the month, regardless of the actual duration of work.: If the employee works only part of a month on creating computer programs, the income tax exemption for the salaries of employees referred to in Article 2(1) applies to the whole salary received that month. Simply put, even if they work less, employees enjoy income tax exemption for their entire salary for that month.
7. Highlighting employee activities: The new order requires the distinct highlighting of the activities of employees who benefit from the tax exemption. This highlighting is carried out monthly, during the period in which the activity of creating computer programs is actually carried out, and is established by administrative act of the head of the public institution.
8. Exceptions for employees of public institutions: The Order recognizes that the activity of creating computer programs can be established/provided for in any other legal act that establishes the employee's job duties, not just in the job description.
9. Periodic employee evaluation: The new order provides for the periodic assessment of IT employees to verify that they meet the tax exemption criteria. This measure maintains a high level of professionalism and ensures that employees properly perform their tasks related to creating computer programs.
The new order brings important clarifications and changes that support IT employees in public institutions. Tax exemption, local applicability and clarification of the duration of the exemption are key points that contribute to Romania's digital transformation and the professional development of specialists.
