2023-09-02 09:01:00
The government needs money, so there are all kinds of tax options to bring money to the budget as quickly as possible. An idea that has been circulating in the Finance area recently is related to the payment of CASS (healthcare) on dividends, but not capped, according to our information. That is 10% of the whole amount.
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We specify that at the moment it is only a discussion. No decision was made.
In the Fiscal Code, these are income from investments, there are also others such as those from bank interest. What we write here would apply to them as well.
At the moment, CASS pays capped dividends at 6, 12 or 24 minimum wages. If we look at the minimum salary from 2023, it would be 18,000 lei, 36,000 lei and 72,000 lei (valid for 2024).
For example, if the dividends received by the entrepreneur are over 100,000 lei, he pays, in addition to the 8% tax, an amount of 7,200 lei CASS.
*The amount of 7,200 lei is regardless of how big the dividends are. It can also be 1 million lei, they will pay 7,200 lei.
If the idea of not paying capped will be put into practice, then it would give 10,000 lei. That is, 2,800 lei more. Basically, 10% is applied to the whole amount, not to the ceiling.
Another example: an entrepreneur collects somewhat smaller dividends between the ceilings of 12 and 24 salaries: 71,900 lei. In 2024, he would have to pay an amount of 3,600 lei according to the current legislation.
If the legislation is amended, then it would be about 7,190 lei, that is, much more.
Those who collect dividends well above the 24 salary cap are the hardest hit if such a measure were to be taken.
We specify that in the version of the Draft regarding tax increases presented by HotNews.ro, it was only about independent activities, this discussion with dividends being new.
Under these conditions, if such a thing were to be adopted, many entrepreneurs might ask themselves the question: Do we get better health services if we pay more?
In addition, the dividend tax increase from 8 to 10% is still on the table.
Cornel Grama – tax consultant: Let CAS be introduced and we all turn off the lights and leave
“Of all the “madness” I have seen in the intentions of the governors, this seems to me to be by far the most fire-fighting and absolutely without any economic thought”, said Cornel Grama, fiscal consultant, for HotNews.ro.
Let’s see why.
“First of all, if we remember when it was decided to increase the tax on dividends from 5% by OG 16 from July 2022 to 8% (from 2023). What did the entrepreneurs do? Well, they took the dividends out of the companies (they effectively decapitalized them ) between July 2022 and Dec 2022 to benefit from the 5% quota,” he says.
- Starting in 2023, the 8% dividend tax collection was very low to none, as what was to be taken out as dividends was taken out in 2022.
“Now the increase in the tax on dividends from 8% to 10% is being discussed and the scandal has started in the Coalition. You can imagine if for these 2 percentage points there is such a big fuss in the Coalition, what will it be like when another 10 is added % in addition (CASS share) to the dividends that the associates collect from the company”, explains Grama.
- “And let’s think about how much would be collected from the state budget if these dividends are no longer paid or almost not at all. Practically, the taxation of dividends would be 10% + 10%, i.e. 20%”.
“Never in the economic history of Romania has taxation on dividends been so high. I say that CAS should also be introduced on dividends at 25%, we all turn off the lights and leave,” says the tax consultant.
According to him, the business environment will find alternative methods, but the effect in the economy will be the growth of the economy from the white zone to the gray or black zone of tax evasion.
“Every time taxes have been increased, increasing the pressure on the business environment, this leads either to the closing of companies or, who stubbornly resist the market, they will use other refuges in gray or black areas of the economy. In both situations, the state budget does not will be collected nowhere near the sums that the governors in their offices imagine”, concludes Cornel Grama.
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