Health contributions in Romania

The recent Law 112/2016 amended the Tax Code by introducing, effective June 2, 2016, an optional procedure for the payment of health care contributions (CASS) owed byindividuals who do not earn income, do not enjoy exemption from payment, and have not been insured by third parties.

These people may opt for:

1- the payment of health care contributions at the rate of 5.5 percent monthly, through the submission of the declaration form (D604), using at least 12 statutory minimum gross monthly wages as the taxable base; currently the statutory minimum wage is 1,250 lei and consequently the current contribution liability will be 1,250 lei *12* 5.5 percent = 825 lei;

2- the payment of the 5.5 percent contribution by taking as a basis 7 minimum gross monthly salaries valid at the time of utilization of health care services; as a result, the current tax base will be 1,250 lei * 7 = 8,750 lei and the contribution to be paid equal to 8,750 lei + 5.5 percent = 481.25 lei.

Payment of health care contributions must be made by the 25th of the month following the month in which the obligation to contribute arises (either by option or by use of health services). Recall that previously the law imposed the obligation to pay quarterly and there was no option but only the obligation to contribute to the health service to the extent of 5.5 percent of the gross minimum wage by law.

Another major change, effective 1.1.2017, concerns the exemption to the payment of health care contributions for investment income (dividends, interest, capital gains) and miscellaneous income when it is earned by an individual taxpayer and the taxable base is below the threshold of 12 gross monthly salary minimum by law.

We remain available for further information.