Participants in sports activities — athletes, coaches, doctors, medical assistants, masseurs, physiotherapists, researchers — may conclude with sports structures either an individual employment contract or a sports activity contract, as the case may be.
Accordingly, income earned under sports activity contracts concluded pursuant to Law on Physical Education and Sport no. 69/2000, as subsequently amended and supplemented, falls under the category of income from independent activities.
We note that starting March 30, 2018, pursuant to Government Emergency Ordinance no. 25/Official Gazette no. 291/30.03.2020, individuals who conclude sports activity contracts are no longer required to obtain authorization from the Trade Register Office or to register with the tax authority.
Pursuant to art. 68^1, income tax is calculated by applying a rate of 10% to the gross income, and this tax is final.
Income payers that are legal entities or other entities required to maintain accounting records also have the obligation to calculate, withhold, and pay the tax corresponding to the amounts paid through withholding at source.
The tax is declared and paid by the income payer via form 112 — Declaration on the obligations to pay social contributions, income tax, and the nominal record of insured persons — by the 25th of the month following the month in which the income is paid.
By way of exception, pursuant to art. 68^1, para. (5), the income payer is not required to calculate, withhold at source, and pay the tax for income paid to associations without legal personality and entities with legal personality that organize and maintain their own accounting, for which income tax is paid by each associate for their own income.
Taxpayers are not required to complete the Tax Evidence Register or to maintain accounting records.
Mandatory social contributions are due in the year of income realization depending on whether the annual ceiling for estimated income is met.
Pursuant to art. 148, para. (2) and art. 170, para. (1) of the Tax Code, the annual ceiling mentioned above represents 12 gross minimum wages nationally applicable in the year of income realization.
Obligations regarding CAS (pension contribution) and CASS (health insurance contribution) depending on whether one or more contracts are concluded:
In cases where the estimated income for the current year equals or exceeds 12 gross minimum wages nationally applicable in the year of income realization:
- A single sports activity contract:
The income payer is required to, by the 25th of the month following the month in which the income is paid:
- calculate, withhold, and pay CAS and CASS;
- submit declaration 112.
The individual is required through the concluded contract to:
- designate the income payer for the purpose of calculating, withholding, and paying contributions through withholding at source;
- agree with the income payer on the level of contributions calculated and withheld at each payment, up to the total CAS and CASS owed.
- Two or more contracts:
Two or more sports activity contracts and/or other categories of income subject to withholding tax from other income payers, where at least one contract exceeds 12 gross minimum wages nationally applicable: The individual designates through the contract an income payer from whom the income received exceeds 12 gross minimum wages nationally applicable, who is required to, by the 25th of the month following the month of payment:
- calculate, withhold, and pay CAS and CASS at the level agreed by the parties, up to the total CAS and CASS owed;
- submit declaration 112.
Important! The income recipient is not required to submit the Unified Declaration to declare CAS and CASS, even if they also receive other types of income outside those for which the designated income payer has calculated, withheld, declared, and paid CAS and CASS, since CAS and CASS are owed only once.
- Two or more sports activity contracts and/or other income categories subject to withholding tax from other income payers, but the estimated income for each contract or income category is below 12 gross minimum wages nationally, and the cumulative income realized equals or exceeds 12 gross minimum wages nationally:
The individual is required to:
- calculate their own CAS and CASS for the current year through the estimated Unified Declaration – Chapter II;
- submit the estimated Unified Declaration – Chapter II in 2020 by May 25, 2020 at the latest;
- pay the CAS and CASS owed by March 15, 2021.
Pursuant to Government Ordinance no. 6/2020, for the year 2020 the deadline for submitting the unified declaration and paying income tax and social contributions is May 25, 2020.