Svetlana Slobodyanu
Experts emphasize: the law on freelancers is initially focused on the freelancer-individual relationship and is not business-oriented.
Both independent entrepreneurs and businesses, they believe, due to the emphasis placed by the government during the advertising campaign, have not realized several important points that significantly limit the application of the law. The non-application of the 15% rate to freelancers in relations with businesses depends not on their registration as such, but on the status of the business itself. What matters is whether it is entitled to deduct freelancer expenses or not.
Limitations for businesses
Recall, according to the law, the right to a deduction have:
(a) taxpayers with no more than nine employees and annual turnover up to 18 million lei or total assets owned by them up to 18 million lei as of the last day of the tax period. At the same time, such expenses may not exceed 10% of the annual labor remuneration fund of the respective taxpayer in the reporting tax period;
b) taxpayers who have as their main activity (accounting for more than 70% of turnover) one of the following types of activity: production of cinema, video films and television programs; performing arts (performances); auxiliary activities for the promotion of artistic performances; activity of sports facilities and activity of sports clubs.
If an enterprise “falls” out of these criteria, which will happen in most cases, it must treat the freelancer as an employee and tax his income in full as wages.
Enterprises are not interested in working with freelancers
“Here lies the first “surprise”: it is not clear whether the conditions listed above must be met simultaneously or each of them separately,” asks auditor, Doctor of Economics Svetlana Slobodeanu. – If separately, then there is at least the slightest chance that a number of companies will meet these criteria, and payments in favor of freelancers will be deductible for companies. Accordingly, no payroll taxes will be withheld from them. Under these conditions, enterprises will be interested in working with freelancers”.
At the same time, representatives of the tax service insist on their simultaneous compliance. So far there are no official explanations, but this position is voiced at various meetings and seminars.
In this case, the likelihood of freelancers entering into a relationship with a business is reduced to zero, as it will lead to double taxation – both on the part of the company and the tax service, which is obliged to calculate a single tax of 15%”.
The criteria for restrictions are unclear
“However these norms are perceived, one would like to understand why such narrow categories of enterprises can work with freelancers without subjecting them to payroll taxes,” asks Lilia Tsapu, administrator of Caus Consult SRL. – Why only show business enterprises and those related to sports? Are these the only important industries in the country? Or do the others pose any tax risks? If yes – it is certainly very serious. It is important to understand the criteria that underpinned these restrictions. And the most important thing is to revise them and make it so that freelancers can work not only with individuals, but also with economic agents, without finding themselves in the situation of paying double taxes.”
Betting on the unknown
“There is a second ‘surprise’ in the law,” continues Svetlana Slobodeanu. – The number of employees, income from sales and/or total assets, as well as the labor remuneration fund of any enterprise are determined at the end of the current year.
That is, in the case of the new law, the stake is made on the unknown! Here, even a tiny number of companies that fall into a narrow corridor of those who can optimize taxation with the help of services provided by freelancers, have no desire to risk understatement of taxes on salaries during the year, if suddenly the criteria by the end of the year do not match!”.
Double taxation
If a business takes a risk and enters into a relationship with a freelancer without taxing their income as wages, another trap may await them.
When the tax audit decides that the company has incorrectly applied the provisions of the law, it will be “additional” payroll taxes on the income of an independent entrepreneur. With corresponding penalties.
But that’s not all. Recalculation of the single tax of a freelancer from these incomes is not provided. It will turn out that the same tax is paid twice. Once – as freelancer’s income, and the second time – as additional taxes on wages calculated at the enterprise level.
The audit community hopes that the problems raised will be heard by lawmakers and they will urgently make appropriate amendments to the law.
