Tax exemption for IT salaries, extension of area and new beneficiaries

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On 02.05.2023, Order no. 1415/2023 was published on the classification of the activity of creating computer programs, which brings new elements:

  • provisions of some areas of activity of IT departments included in the organizational chart of companies such as information and communication technology, artificial intelligence and emerging digital technologies, electronic tax administration, databases, e-government services and digital transformation;
  • introduction of local public institutions defined under Law no. 273/3006 on local public finances as beneficiaries of this exemption in addition to companies and public institutions;
  • mention that the positions allocated to the activity of creating computer programs do not have to be included in the organisation chart, but can be established by administrative act of the institution’s leader, but only applicable to public institutions;
  • possibility that the job duties of the employee in the public institution may be mentioned in a legal act other than the job description;
  • the fact that the exemption applies to the entire income from salaries even if the activity of creating computer programs in one month is partial.

The new legislative provisions will enter into force starting with 01.06.2023.

With regard to the new amendments, we are of the opinion that they bring flexibility and clarity in application, support on the one hand for private companies by encouraging investments in the IT sector and on the other hand public and local institutions to create software thus contributing to the digitization process.