Intro to our firm

"When I moved to Romania and opened my first law firm, Romania was not yet a member of the EU. For me the first years had been very interesting. Each day working with the courts and the authorities was exciting. Everyday situations, although related to common general legal practice, were treated differently. The legal norms were undergoing a big change.

Almost 10 years after the accession of Romania into the EU, the law firm Hirsch Marinescu & Partners is confronted with major legal and economic challenges. Initially we incorporated companies continuously or helped our clients in taking-over other companies. Later there was the booming days of renewable energy in which we supported clients in selling, buying or setting-up the SPVs. Today our focus is related to restructuring and optimization of companies. First and foremost, the latest legal norms in civil - and insolvency laws represent a step forward in the Romanian legal system.

Our permanent challenge is to protect the economic and financial interests of our clients in the very best way. Romania is still a country in which investors can find big success.

In order to find this success it needs a responsible and reliable consultant taking care of the situation. We are gladly your consultant for all matters related to the legal interest in order your investment becomes the success of all of us. "
Mag. Dr. Monika Hirsch, attorney-at-law

Beginning with 01.01.2018 will enter into force the provisions of the Emergency Ordinance no.79/2017 for amendments and completion of Law No.227/2015 regarding the Fiscal Code, which changes the payment methods of the contributions.

The intention of the legislative body is to shift the payments of the social contributions, which were in the employees’ burden, but paid by the employer, to the employee.

Therefore, starting with 2018 year, the pension insurance and the health insurance contributions will be paid only by the employee, the employment insurance contribution will be paid only by the employer. The contribution for the solidarity fund will be paid solely by the employer, only if it has at least 50 employees and if it does not employ at least 4% disabled persons within its total number of employees.

In all cases, the employer will still be responsible for calculating, withholding and transferring contributions to the state.

This change will have a huge impact on the employee’s net salary because it can decrease up to 16 %, according to some calculations made by experts. On the other hand, given the shift of the contributions, the employer will see a positive impact.

Though, herewith the changes, the benefit of the employer is not really existing, as all the employers were already approached by the employees for future increases of the gross salary, in order to reach the same level of the net salary, as initially negotiated.

Below, you can find a comparison between 2017 and 2018 of the gross minimum salary at national level, in terms of the changes made by OUG 79/2017:

  Contributions in total in RON
  2017 2018
EMPLOYEE OBLIGATIONS Gross 1,450 Gross 1,900
Salary tax -16% 146 Salary tax  -10% 73
Pension contributions – (CAS) – 10.5% 152 Pension contributions – (CAS) – 25% 475
Health contributions fund – (CASS) – 5.5% 80 Health contributions fund – (CASS) – 10% 190
Unemployment fund – (CFS) – 0.5% 7   0
Total employee contributions 385   738
Net 1,065 Net 1,163
EMPLOYER OBLIGATIONS Pension contributions – (CAS) – 15.8% 229   0
Health contributions fund – (CASS) – 5.2% 75   0
Unemployment fund – (CFS) – 0.5% 7   0
CCI Vacation funds 12   0
Accidents fund 2 Contributions for insuring the work – 2,25% 43
Guarantee fund 4   0
Total employer’s contributions 329 Total employer’s contributions  43
Total contributions 714 Total contributions 780

 

In order to avoid a decrease in the current net salary, the Government imposed by another ordinance, namely GEO 82/2017, that each company should start the negotiations procedure net salary with its employees, until 20.12.2017. If there are any changes to the employment contracts following the negotiation, Considering the possible changes of the labor contracts, by following the negotiations, please bear in mind that there is a requirement for their registration in REVISAL, one day before the entry into force, and no later than 31 December 2017.

Please note the REVISAL registration is mandatory and in case not operated in due time (1 day before entering into force), fines between 5,000 and 8,000 RON can be applied by the controlling competent institution.

Therefore, although this procedure does not impose an obligation to raise the gross salary, so that the employee to earn the same net salary in 2018 as currently earning, we believe that employers should pay a higher salary, directly proportional to the loss which the employee will suffer by moving the contributions in his obligation, since for the employer the total cost of salary paid in 2018 will remain as it is today. Note that this change with the previous recommendation applies to wages higher than the minimum prescribed by law. Unfortunately, for employers who are currently offering the minimum wage, the changes brought by GEO 79/2017, according to experts, bring an increase of up to 6.6% in taxes due to the increase of the minimum wage on 01.01.2018 gross to 1.900 RON.

We recommend a good calculator of taxes, for comparison purposes whilst negotiations shall be finalized at this link.

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Author: Georgiana Lazăr, georgiana.lazar@nhp.ro
For further information on this aspect and any other questions related to this topic please feel free to contact: Mag. Georgiana Lazăr. (georgiana.lazar@nhp.ro)

Producers of energy with an installed capacity of 125 MW are regaining the market

According to a recently issued Law 122 on 3rd of July 20151, regarding the new measures in the electricity field (hereinafter “Law 122/2015”) is again changing the possibility to enter on the market for big producers of energy, which develop an electricity power producing capacities of 125 MW or more, up to 250 MW (hereinafter “Big Producers”), do not need a separate individual approval of the European Commission, if attested by the Regulatory Authority in the field of energy.

In 2012, an Emergency Ordinance of the Government2 was issued according to the European Commission Decision 3, obliging the Big Producers to obtain separately from the European Commission an individual approval, after being licensed in Romania, for benefiting of the support scheme for the time-frame given in Law no. 220/2008 on the support scheme(maximum 15 years).

Therefore, starting with the application of Law no. 122/2015, respectively 6th of July 2015, for the Big Producers of energy is establishing that no separate approval is necessary any longer, and for the future accredited (licensed) producers of energy and for previously accredited (licensed) producers. Read more »

  • Individuals Insolvency Law will come into force in December 2015
  • New deadline for the financial statements
  • Amendments to the Companies Law No. 31/1990 and Trade Register Law
  • The government wants to eliminate the stamp for companies and PFA
  • New tax breaks for SMEs
  • Support to micro and small enterprises in rural areas for the establishment and development of non-agricultural economic activities

Individuals Insolvency Law will come into force in December 2015

On 26th of June, 2015 Law no. 151/2015 on insolvency of individuals, an absolute novelty in the Romanian legal system, was published in the Official Gazette no. 464 of 26th of June 2015 and will come into force on December 26th.

The main purpose of the law is to grant a chance to those in good faith debtors to redress their financial situation through a debt repayment plan; the liquidation of assets or through the simplified procedure.

The procedure applies to those individuals who have their domicile, residence or usual residence for at least 6 months prior to the application in Romania; have total debts more than 15 minimum wages with a due date expired for more than 90 days; have no possibility to redress financial on their own in the next 12 month after their debts became due.

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