Christmas represents a time when employers can offer benefits to their employees in the form of gifts, whether monetary, in-kind, or gift vouchers. In Romania, these benefits are not only a way to reward employees’ work but also an opportunity to reduce tax costs, according to the provisions of the Fiscal Code. In this context, it is essential to understand how Christmas gifts can be granted and the conditions for benefiting from fiscal advantages.

Tax rules for Christmas gifts

According to the Romanian Fiscal Code, Christmas gifts, including gift vouchers, are clearly regulated. They can be granted to employees and their children and benefit from favorable tax treatment under the following conditions:

1. 300 Lei Limit per beneficiary, per occasion: Gifts will not be taxed if their total value does not exceed 300 Lei per employee or their child, per occasion.
2. Exemption from income tax and social contributions: As long as the 300 Lei limit is not exceeded, the gifts are exempt from income tax and social contributions, which is advantageous for employers who wish to reward employees without incurring additional taxes.
3. Provision in the employment contract or internal regulations: To benefit from these tax advantages, the gifts must be provided for in the employment contract or the company’s internal regulations. These documents should detail the manner in which the benefits are granted and the conditions under which they apply.

What happens if the 300 Lei limit is exceeded?

If the value of the gifts exceeds 300 Lei per beneficiary, per occasion, they will be considered taxable benefits and subject to income tax and social contributions for both the employee and the employer.

Author : Oana Gradinariu