Romania to tax tips starting next month

Romania to tax tips starting next month

Bucharest, April 22, 2015/ Independent Balkan News Agency

By Daniel Stroe

The Romania Government today passed an emergency ordinance which says money left as tips by customers to be registered on a separate fiscal receipt and taxed by 16 per cent, Finance Minister Eugen Teodorovici announced in a press briefing at the Victoria Palace, the seat of the executive branch.

“The ordinance introduces some provisions for defining the amounts collected in addition as tips in view to show this type of earning on the fiscal receipt, with the purpose of clearly delimiting it from the revenues collected by the economic operators for delivering services or for directly providing services for the population and ensuring its taxation”, Teodorovici said.

“The difference between the service provided and the customer’s will to compensate the service, this amount will be registered on a separate fiscal receipt and taxed by 16 per cent,” he added, as quoted by the state news wire Agerpres.

He went on to explain the amount resulted from tips “can remain at the employer’s discretion who can decide either to keep it and use it to cover some current costs or to distribute it to employees, as an incentive.”

Teodorovici also maintained that the employee has the obligation to register the amounts of money he has in a separate register kept by the employer. “In case amounts of money are identified in the possession of the employee, a fine will be charged,” the Finance Minister said, however, pointing out that in case an employee hides money “the state fiscal administration cannot force him/her” to show these amounts.

The Finance Minister also said that, in the coming period, including during the forthcoming May 1 mini-holiday, “check-ups will be intensified.” “We shall increase the number of those who will make check-ups, for sure,” Eugen Teodorovici also said.

The tip taxing initiative came up after many hoteliers and restaurants argued supplementary amounts of money tax inspector found and which the employers could not justify came from tips.

In the same conference, Teodorovici said Romania’s arrangement with the International Monetary Fund (IMF) and the European Commission will be restarted in order to be closed late this year. A joint mission of the IMF and the European Commission is expected in Bucharest May 19-26 for technical talks on Romania’s Tax Code and the latest developments in the implementation of measures included in Romania’s arrangement with the IMF and the European Commission.