Romanians! How do you declare your income? (2016)


#1

I know it’s a lot to read, but it may be worth it.

Hi,

First of all, I want to let you know that I am a full time author here, but I will post this thread with another account. Please don’t make a “tam tam” from this. I hope you understand!

Now, I am not a total newbie about declaring taxes.
I’ve been doing this for 3 years, but this year (actually 2016) I would like to change the legal form (“forma de organizare juridica”).

For the first year, I declared my income using the 201 declaration. There was some issues at first, but it went all good in the end.
Then, I opened a PFA in order to deduct some costs, but there weren’t so many. All I had to do was to give to my accountant the statements from the bank (extrase de cont).
I was part time employed at that time and I was not paying the CAS (just the income tax and CASS - 21.5%).

But, maybe you heard that the fiscal code has been modified and there will be much more taxes for a PFA or a PF.

For short:

  • 16% income tax
  • 10.5% for CAS from the net income ( and it does not matter if you’re employed, you will still pay ) *
  • 5.5% for CASS (I am not sure about the calculation base here)

*And guess what. If you want to contribute to your pension, you will have to pay another 15.8% ( 15.8 + 10.5 = 26.3% from your net income )

And there are more drawbacks for a PFA from 2016. A simple google search and you will find them (for the last month - the fiscal code was authorized in September)

I don’t think I will continue with the PFA, and I contacted my accountant to find our more about opening a SRL. From 2017 you will have to pay 3% profit tax (or 16% income tax) and another 5% for dividends (Later edit: There’s also a 5.5% tax for CASS from 2017). It sounds pretty good.

But my accountant said I can’t declare my income with a SRL. There was something with “Contabilitatea se tine in partida dubla”, and I need an invoice for every transaction.

The monthly statement from Envato is not enough, (For a PFA it was different) and there’s no way I can make an invoice for the income from partnerships ( Some other authors send me money via PayPal for a partnership - Envato payment actually ).

I don’t know so much about accountancy and I was wondering how you declare your taxes in Roumania?
I really do not want to continue with the PFA. Is there anyone else who has a SRL?

Thanks,
Radu


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#2

Yeah, i do have a srl(cu impozit de 3% pe venit) and have opened it only for the income from here initially. What i do, when i receive money from here(via swift in my srl account) i create an invoice on the amount i get and send it to my accountant. Initially we wanted to use the invoices they generate, but they are not really usable in our country for various reasons, your accountant will tell you the same(and why), so we ended up with this solution of invoicing the entity that sends us the money.
So that’s pretty much it.


#3

Good topic. Keep it coming :slight_smile:


#4

Hey @twisted1919 , thanks for your answer. I appreciate it!

So, I think I will make an invoice for the earnings from envato too. I will get in touch with my account to talk about this.

But what about partnerships? Practically, Envato also send the payment, just through a different account.
Can I invoice Envato for those earnings too?

Indeed, @CubeSounD. It is a good topic, and I invite more Romanian authors to talk about it.
There will be a lot of changes from 2016.The new fiscal code in Roumania and Envato “expanding” to USA will make us to pay more taxes than ever. A poor administration of your business can make you lose lots of money.


#5

@themesRevealed - I personally have no partner so i can’t talk about that.


#6

Damn it!

Thanks to the new “Envato expanding to 'Murica” announcement, from 2016 it will be even harder to declare the income from partnerships.


#7

Hi,

I think PFA is a better solution than SRL.
The reasons are :

  • SRL lock your money in the company, to cash out on your name you have to pay other fees ( dividend tax, and others ). Finally, there are more taxes than the PFA.

  • 10.5% for CAS - will calculate from income BUT not more than five average salaries. The average salary is aprox. 2500 RON .
    Those who earn more than 12500 RON this law favoring.

  • On PFA fees for an income of 18000 RON/month as ( 16 + 5.5 = 21.5% from your net income = 3870RON ) + 10.5% CAS from 12500 RON (1312RON) , total charges are 3870RON + 1312RON .

I use PFA. Fees are very similar with other European Union countries.
To withdraw your money I recommend SWIFT not PayPal.
Envato invoices are valid in Romania.


#8

Hi @thezoc. Thanks for your detailed answer.

I know that you can get your money only after the fiscal year has ended for a SRL.
Being the only associate for the firm, you will have to pay 5% dividends and 5.5% CASS ( that is 10.5%).
And, of course, 3% profit tax for the firm. I don’t know about other taxes for a SRL…

Ohh yeah, if you want to be employed at your firm, there will be taxes for the employer and employee. This way, I know it is better to be a PFA, but, I will be just an associate, not an employee.

For most of the freelancers, a PFA is a better solution than a SRL. The main advantage is that you can have your money on a monthly basis, and of course, it is a lot easier for accountancy (also, an accountant is cheaper for a PFA than for a SRL).

I don’t think I will have an income of at least 12500/month in the near future so that I will not have to pay more than 687.5 RON for CASS.

Also, you probably forgot the income tax ( 16% ) for the point 3. And there aren’t so many deductible expenses for our activity.

However, for now, I just try to compare the two legal forms and think of the best solution for me.


#9

In point 3, I wrote of 15.8 mistake, I corrected 16%.
I pay this tax for PFA ( 16% + 5.5% + ( 10.5% from 12500) ) For me there is no change in 2016 (because I am not employed)
For SRL (normal) in 2015 taxes are (16% + 24%), taxes on dividends are in 2015 (because I am not employed) 16% + 5.5% + 10.5%) + incredibile big bank taxes, salary accounting.

I have SRL and PFA . I have normal SRL (16% + 24% VAT) - I do not know the conditions for 3% SRL, but I know clearly that 3% is for those with 65,000 euro annual turnover. I’m having a higher turnover figure of 65.000 euros annually. The management costs are much higher (accounting is mandatory, bureaucracy, bank taxes ). I worked SRL 4 years, in summer I started the PFA and the costs are half. Deductibility phase is very complicated if you have high income.

In Romania, PFA fees are same with many European countries and U.S.
Also as SRL, ANAF visit quite often, about once every 3 months. Especially if you have no employees. “Fighting corruption and evasions” :smile:

I think for 10.5% do not complicate your life. :joy: :sweat_smile:

A simple example on PFA (available in 2016) I won last month 3075USD , Tax are 995 USD , Your money 2080 USD . From 995 USD , CAS = 322 USD . In 2015 your tax without CAS are 673 USD

Positive part : If you earn $4.000, $6.000, $ 10,000 or more :sunglasses: on month / CAS = 322 USD

In the above posts I am confused CAS 10.5% (10.5% from 5 medium income) with CASS 5.5%. I corrected.


#11

@thezoc - tell me more how those envato invoices have any value in Romania?
In Romania the invoice has to contain serial numbers, one after another and it has to contain the name of the entity from where you get the money, so that they can be traced back and be verified.
Think that in my invoices from envato i have a number of purchases from users that don’t specify their real name/address/etc, so you think anaf will swallow this? (and no, you can’t just say, hey you know, i didn’t know that they’re doing this, i have no control over what’s written into those invoices, because it won’t work, it’s your business and you have to know what the heck you’re doing and who you’re invoicing)

Also, how can you write an invoice now and get money on it weeks later? (and from a total another entity than specified on invoice) What if a control in meanwhile? Or you don’t register the invoice at the moment of sale? which would get you in more trouble (hello evaziune).

Also, the invoice has to contain the exact money amount you receive after a sale but Envato writes an amount as a total and you get less than that(ceea ce te face evazionist).

I remember my accountant gave me so more much reasons why i should not use those invoices, i just can’t remember them all.

P.S: I am not against you or something (maybe the post sounds like) i just state the obvious.


#12

@twisted1919 Could you say me please, how looks your invoice issued to Envato? You write on it all your items, what your sold in a month? Or you issue simple invoice with “digital services” or somethink like that?


#13

Yup, i’m writing the items i sold, how many times each item and the exact money i got from each item(the amount i get after envato takes it’s cut, after i pay all fees).
In the end the math should match with the amount you received from Envato (exclude banking fees).

This way is simpler, because you act as a provider to envato, which you really are because you provide the software. You are not a direct seller as envato says you are(we really are far from this thing), you sell your items with a certain price(the one you take into consideration when doing the invoicing math) and envato adds it’s fees on top of it and handles vat and all, which it does, so it’s easier to explain this workflow if someone asks you about.


#14

@twisted Try to talk to an accountant makes multinational accounting will clarify it, or find an accountant who did bookkeeping for online stores in Romania. Online store with card payment is the same. You cut bill in the same day. But the money come a month later from PayU or MobilPay or PayPal and all the money comes along. If I declare that is my name “thezoc” and give fictitious address is not your job. You’ve paid your taxes for that bill. This your job . The state wants your taxes do not care what it says on the invoices. Many accountants told me that “you can not use these invoices” . But I found an accountant to resolve this situation. I had controls the company and I explained the situation some did not understand so I showed them and they understood. After discussions with headaches and calculations said “it’s ok” .

You do not deduct EU VAT if you do not include Envato bills ? Or you’re not paying VAT?
My advice is to change your accountant. For a long time I did like you.

If you have problems you can tell " I make legal translation from my bill. ". Just like bills at customs when you have a product outside the EU.


#15

For now i don’t pay VAT. If you have any hints for anyone on Constanta i am more than willing to go and speak. I went to at least 12 different ones here and all of them seems to be on same page, thus my answers above.


#16

I ask my accountant, and if I consent to public site here. I’m from Bucharest .

Updated with this previous post " If you have problems you can tell " I make legal translation from my bill. ". Just like bills at customs when you have a product outside the EU. "

UPDATE : I discovered this when I bought all kinds of items on eBay from America or China and bills look the same. And believe me I’ve seen in China the world’s oddest bills. And at custom said “are very good.” :smile:

UPDATE 2: Think at this example : Do you have a normal shop . A customer comes to buy bulbs. He will say a name and address. It’s not your job to check that data are real. Your job is to pay taxes for that bill. Romanian law does not force you to have a particular invoice form or ask for an ID when writing a bill. I remember I made a 'internal decision about bills" signed and sealed but nobody ever asked me anything about it.


#17

@thezoc
Ok, how you deduct Envato fees from your sale?

Envato sent just invoice to us, but we never paid those fees in real life. If i didn’t pay them i can’t use them as my business expense, because this transaction never appears on my bank statement. So, in my country, i could not deduct fees from my gross sale.

In your country you don’t need the bank statement proving your expenses?


#18

Hi,
I do not understand what you mean …
You can deduct just VAT if you are in EU country, for EU customers . Because they already have paid VAT. It’s not necessary to you in your country you pay this . http://www.icaew.com/en/library/key-resources/double-tax-treaties
And it’s not necessarily bank statement for this operation .
Have a nice day,


#19

EU Value-Added Tax (VAT)
As we’ve previously announced, from January 1st, 2015, we are managing VAT compliance, collection and remittance. We’ve set up an EU MOSS VAT registration and our registration number is EU826409867. When we begin collecting VAT, it will be reflected in the relevant commercial documents outlined above. We’ll announce this here and in the forums and also publish a series of help center articles to support authors and buyers through the change.


#20

@thezoc I didn’t speak about VAT, but author fees.
You have invoices issued by Envato with higher price, than you receive.
No problem for you to pay income tax from higher amount?


#21

On your account specified your profit, envato fee, vat … and you pay just for your specified profit .


Update : I checked my other account now. Invoices are for exactly how much money you earned. As a buyer you another bill for Envato buyer fees, and an Invoice for price product . And as the author no invoice for fees, the invoice is for only your profit.

Example for buyer non EU : in market product is 19$ you have a bill with $15.20 (product price) and a bill with $3.80(envato fees) . They are separated.
Example for author : you have a bill just with $15.20 because bill with $3.80 is from : Envato Pty Ltd PO Box 16122, Collins Street West , Victoria , Australia , ABN 11 119 159 741
If you have a buyer from EU at $15.20 + VAT (VAT are payed by client) .

Conclusion : You pay exactly for what profit you make.