2. Contribution for health insurance – 10% (in 2018) and its reflection in the Unique Declaration for Individuals

We continue the series of articles dedicated to individuals, about taxes and duties and how to highlight them in the Unique Declaration.

The articles in this series address those organized in independent activities such as:

• PFA – Authorized Physical Person
• II – Individual Enterprise
• IF – Family Enterprise
• PFI – Independent Physical Persons
• Liberal professions

Legal notice: The text of the articles is in accordance with the EMERGENCY ORDINANCE no. 18 of 23 March 2018 for amending and completing the Law no. 227/2015 regarding the Fiscal Code. The Ordinance was published in the Official Gazette and it is in force but may be amended by the law of approval.

2. Contribution for health insurance – 10% (in 2018) and its reflection in the Unique Declaration for Individuals

Taxpayers to the social health insurance system owe, as the case may be, the social health insurance contribution for the incomes from Romania and abroad, made from the following categories of income:

• incomes from self-employment
• incomes from intellectual property rights
• incomes from association with a legal entity
• incomes from the disposal of the use of the goods
• incomes from agricultural, forestry and fish farming activities
• investment incomes
• incomes from other sources.

Individuals who earn income from self-employed activities from one or more sources and / or other income categories owe the health insurance contribution if they estimate for the current year revenues whose cumulative value is at least equal to 12 gross minimum wages per country, in force at the deadline for submission of the declaration.

Individuals who earn wage income and assimilated salaries do not owe the health insurance contribution for intellectual property income.

Compliance with the annual limit of at least 12 gross national salaries in force at the time of submission of the Unique declaration is made by aggregating the revenues obtained from:

• net income or income norm from self-employment
• net income from intellectual property rights established after the flat-rate allowance has been granted, as well as the net income of intellectual property rights determined in a real system
• net distributed income from associations with legal entities
• net income or income tax, as appropriate, for income from the disposal of the use of the goods
• income and / or earnings from investments (dividends, interest, etc.)
• net income or income tax, as appropriate, for income from agricultural, forestry and fish farming activities
• gross income and / or taxable income from other sources

For taxpayers who expect a cumulative net income of more than 12 gross wages and are required to pay CASS, the annual basis for calculating the health insurance contribution is the equivalent of 12 gross national salaries, in force at the time of submission the unique declaration.

The social health insurance contribution is calculated by the taxpayers by applying the contribution quota on the annual basis of calculation.

For 2018 the calculation base is 22,800 lei and the payment contribution is 10% * 22,800 lei = 2,280 lei.

For 2018, the payout date is March 15, 2019, and you can always pay your contribution up to that date from one or more payments. Interest and penalties are not calculated within this term.

Individuals who earn income from self-employment for which there is no obligation to withhold CASS shall file the Unique declaration by March 15 inclusive of the year following the year of income. For the year 2018, the Unique Declaration is submitted until July 15, 2018. For individuals who make revenues from intellectual property rights, from lease or from associations with legal entities for which the tax is withheld at source, and the estimated net of this income for the current year is at least equal to 12 gross national salaries, from a single payer of income, he has the obligation to calculate, withhold and pay the social health insurance contribution. Individual taxpayers do not file the Unique Declaration, but the payer has the obligation to file monthly, until the 25th of the month following the one for which the earnings are paid, the declaration of social security pay, income tax and nominal value insured persons.

Individuals who start work and / or earn income in the course of the fiscal year and aggregate annual income aggregated from one or more sources and / or income categories (excluding intellectual property, lease income or associations with legal persons for which the tax is withheld at the source), estimated to be achieved for the current year is at least equal to the level of 12 gross national salaries, recalculated according to the number of months remaining until the end of the fiscal year, are obliged to file the unique Declaration within 30 days from the start date of the activity.

Taxpayers who, during the fiscal year, enter into temporary suspension of activity under the relevant legislation, as well as those who cease their activity, submit the unique declaration to the competent fiscal body within 30 days from the date of the event, and recalculate the contribution due and declared for the current year.

Taxpayers whose estimated income changes during the year in which the earnings are made and no longer fall below the minimum basis of calculation may recalculate the contribution due for the current year by submitting the Unique Declaration at any time by the due date .

Taxpayers who start an activity in December filed a Unique income tax return and social contributions due by individuals until March 15, inclusive of the year following the year of income.

if individuals achieve an annual cumulated annual net income below the level of 12 gross national salaries and in the previous fiscal year they did not have the quality of an employee and did not fall into the categories of persons exempted from the insurance contribution social health insurance contribution shall be calculated on a basis of calculation equivalent to 6 gross national salaries and shall submit the Unique declaration, up to and including 15 March of the year following the year of the income, with a view to finalizing the contribution health insurance.

Compared base for 2018 = 6 * 1,900 = 11,400 lei

Minimum payment contribution = 10% * 11 400 lei = 1 140 lei.

The payment term of the health insurance contribution is until March 15, inclusive, of the year following the year for which the contribution is due. The taxpayer can benefit from a maximum of 10% (reduction in the amount of contributions) to pay health insurance contributions under certain conditions.

Option to pay social health insurance

Individuals who estimate cumulative annual earnings below the limit of 12 gross minimum wages, as well as individuals who do not earn income, can opt to pay the contribution as follows:

a) taxpayers who have estimated cumulative annual revenues for the current year below the minimum limit, i.e. below 22,800 lei.

• if they submit the unique declaration and registering with the health insurance system by the legal deadline for submission, it can be ensured on a basis of calculation representing the amount of 6 basic minimum salaries per country in force on the date of its submission; or
• if they submit a unique declaration and register with the health insurance system after the legal deposit deadline, on a basis of calculation equivalent to the amount of the country’s gross minimum salary in force at the time of the declaration, multiplied by the number of months remaining at the legal deadline for submitting the Unique Declaration (March 15 next year), including the month in which the Declaration is filed.

b) individuals who do not achieve incomes as listed above are not paid and do not fall into the categories of persons exempted from the social health insurance contribution owe the social health insurance contribution on a basis of an amount equal to 6 gross national salaries, irrespective of the date of submission of the Unique declaration.