PRIVATE HEALTH CARE SERVICES: NEW FACILITIES FOR EMPLOYEES

Employees who benefit from health insurance premiums and/or medical subscriptions contracted for their benefit by their employer are exempt from the payment of income tax and compulsory social security contributions up to a ceiling of 400 Euros per employee, per year, according to the new amendments brought to the Tax Code by Emergency Ordinance no. 25/2017, published in Official Journal no. 706 as of 31 August 2017.

LEGAL CONTEXT

Previously, employees benefiting from this type of medical services offered by their employer were exempted only from the payment of income tax, under Law no. 177/2017, which had amended article 76 paragraph (4) letter (t) of the Tax Code.

The authorities state that, through this new tax facility (namely the exemption from the payment of compulsory social security contributions for employees who benefit from insurance premiums and medical subscriptions), which entered into force on 3 September 2017, they intend to continue aligning legislation with the changes in the labor market in terms of benefits offered by employers to their employees. Moreover, the authorities also state that they aim at encouraging companies to contract private medical services.

As far as employers are concerned, health insurance premiums and/or medical subscriptions contracted by them for the benefit of their employees as part of their wage stimulation policy are deductible expenses.