Starting from 9 July 2015, taxpayers who receive tips will no longer be required to document them on a separate fiscal receipt, as the legislation governing tips has been amended. The amendments repeal the recently enacted and controversial tax on tips. (Click here and here for our previous Law-Now alerts on this topic).
The amendment repeals the following provisions of the law:
- the definition of tips;
- the requirement for taxpayers to issue distinct fiscal receipts for the tips received;
- the requirement for taxpayers to have an internal policy on the destination of tip proceeds;
- the accounting treatment of tip proceeds; and
- the requirement of employees to register the money they hold in the Registry of personal money.
The corresponding fines and penalties for failure to comply with the rules governing tipping have also been repealed.
With the elimination of these provisions, the previous legal framework that left tip proceeds unregulated is reinstated and from a tax perspective, tips will no longer be subject to corporate income tax, VAT or income tax. However, tips cashed in by taxpayers between 8 May - 8 July 2015 fall under the repealed provisions and are subject to taxation.
These amendments result from the Romanian Parliament’s adoption of Law no. 186/2015, modifying the Government’s Emergency Ordinance no. 8/2015.