The foreign employer, from the law perspective, is the one that does not have its principal headquarters, permanent headquarters or representative office in Romania, but has employees who work in this state.
Non-resident employers should be aware that, first of all, they must be able to establish a tax domicile in Romania.
Order no. 3706/2016 from December 27, 2016 approved the Procedure for the registration of agreements concluded by non-resident employers who do not have a principal headquarters, permanent headquarters or representation in Romania and which owe the compulsory social contributions for their employees, according to the European legislation applicable in the field of social security, as well as agreements regarding the social security systems to which Romania is a party, as well as other procedural aspects.
The procedure concerns two situations:
1. The obligation of non-resident employers to pay the compulsory social contributions is due in accordance with the provisions of the European legislation applicable in the field of social security, as well as the agreements regarding the social security systems to which Romania is a party.
2. The obligation of non-resident employers to pay the compulsory social contributions based in states that are not covered by the European legislation applicable in the field of social security, as well as the agreements regarding the social security systems to which Romania is a party.
For the first situation, in order to fulfill the obligation to declare and pay social contributions, the employer has two possibilities.
1. To conclude an agreement regarding the obligation to declare and pay the compulsory social contributions with his employee, an agreement by which the latter obliges to declare and pay the contributions to the Romanian state.
In this situation, the resident and non-resident natural persons, who work in Romania and obtain income in the form of wages from employers who do not have principal headquarters, permanent headquarters or representation in Romania must register the following documents:
a) form 020 “Tax registration statement / Statement of mentions for Romanian and foreign natural persons holding personal numeric code” at the fiscal authority where it is filed with the tax domicile or, as the case may be, form 030 “Tax registration statement / Statement of mentions for natural persons who do not have a personal numeric code”;
b) a copy of the agreement, translated into Romanian, certified by authorized translators, of the agreement concluded with the employer, regarding the obligation to declare and pay the compulsory social contributions; in the absence of the employee’s power of attorney, employers have the obligation to transmit to the competent fiscal body information regarding the agreement concluded with its employees.
After registration, the employee has the following obligations:
a) the obligation to submit monthly the form 112 representing “Declaration regarding the payment obligations of the social contributions, the income tax and the nominal records of the insured persons”
b) the obligation to pay the contributions to the state.
c) Upon termination of the agreement, the employee will submit a declaration of mentions, the number of the form being the same as in the case of the fiscal registration, for the elimination from the fiscal vector of the declarative obligations regarding the income tax from wages and social contributions.
2. In case the employers did not conclude agreements with the employees, they have the following obligations:
a) fiscal registration using the form for fiscal registration 015 “Tax registration statements / Statement of mentions / Declaration of cancellation for non-resident taxpayers who do not have permanent residence in Romania”;
b) payment of the social contributions due, of the withholding and payment of the individual social contributions;
c) monthly / quarterly submission of form 112 “Declaration regarding the payment obligations of social contributions, income tax and the nominal records of the insured persons”.
In the second case, if the foreign employer is established in a state that does not fall under the regulations of the European Union on the coordination of social security systems or in states with which Romania does not have agreements or conventions in the field of social security, they have the following obligations :
a) to register tax by filing the form 010 “Tax registration statement – Declaration of mentions for legal persons, associations and other entities without legal personality”.
b) monthly or quarterly submission of form 112 “Declaration regarding the payment obligations of the social contributions, income tax and the nominal evidence of the insured persons”
c) the monthly withholding and payment of social contributions and tax due for the salaries that its employees obtain for the activities carried out in Romania.
In case you want more information on this subject we are available at our law firm in Sibiu, str. Spartacus, no. 13 A, Sibiu County, by phone +40720291919 or by e-mail at [email protected].