Non-cash perks not advisable

“We just thought everything was crystal clear.” This is what Maria Manolescu, state secretary within the Finance Ministry said, after two months of discussions and general confusion created by the enforcement guidelines of the income tax law.
The Finance Ministry has not done a thing to allay the confusion since December 2002, when the Government endorsed the first draft of the guidelines, making economic operators wait until the beginning of February, when the guidelines were published in the Official Gazette.
“The management of the non-cash employee perks can be a very simple thing,” Manolescu reassures taxpayers.
The Exchequer official says that the status of such benefits is eventually up to the employer.
“We issued it as a procedure. We have no idea how many people will choose this system. We think there are no problems. So far, our colleagues at the Exchequer have not gone into such details,” Maria Manolescu says, commenting on the commotion stirred by the idea of having the perks in form of phone calls, company-paid car or home taxed as employee income as of the beginning of this year.
Practically, it is the company management that decides which employees get a company car, even if for an unlimited period of time, as well as which employees get a company-paid phone subscription and how many call minutes.
Yet, it is the company again that may decide to cap these perks and have everything above the cap registered as perk and taxed accordingly.
The Finance Ministry official says the Exchequer is not after these perks, because they are difficult to manage. She explains the stipulations in the guidelines regulating the taxation of the non-cash perks have a precise target, that is “discouraging certain practices.” Manolescu means the situation last year when the insurers assaulted companies offering them a solution to dodge the payment of salary tax by paying the employees certain insurance premiums maturing in a matter of days.
“We wanted to discourage this process, by double taxation of the insurance premiums-related revenues, inclusive. Had we not done this, we would have risked having everybody pay taxes up to the minimum wage in the economy,” Maria Manolescu concluded.