How Micro-Enterprises Will be Taxed in 2018

Written by: Bridgewest

The taxation for small companies in Romania and particularly for the ones with at least RON 45.000 representing the registered minimum share capital has changed starting with January 2018 and with the new legislation comprised by the Romanian Fiscal Code. However, such firms must apply for a different kind of taxation, which can be explained by our accountants in Romania. Our team can also provide small, medium and large companies with audits in Romania and related concerns.

Stipulations related to the new income tax for micro companies

If until 2017 the micro-enterprises could apply for the income tax if a social capital of RON 45.000, this rule is no longer available in 2018. According to the new Fiscal Code, these firms should apply for a different kind of taxation, meaning that the income tax shall apply for companies with registered revenues in 2017 of around EUR 1 million, except juridical persons with activities related to the deposit guarantee fund in the banking system, private pensions, or transparent fiscal entities with juridical attributes.
On the other hand, the situation can change, and the government can reconsider the OUG 79/2017 which observes the companies with a minimum share capital of RON 45.000 apply for the income tax as established before, if each firm has at least two employees. Due to many fiscal changes in the business climate, it is suggested to consider and respect the new tax conditions, a situation where a Romanian accountant can offer support and advice.

The share capital for companies to be micro businesses in Romania

According to OUG 79/2017 which was adopted last year in November with applicability starting January 2018, the threshold for which a sole trader can be considered a small company is set between EUR 500,000 and EUR 1 million. The taxation for micro-enterprises in Romania comprises activities in the banking system, insurance, gambling, and mining. Furthermore, the rule regarding the incomes generated from other activities besides consultancy and management that sums up 80% of the total revenues has been eliminated. The companies which register incomes from consultancy and management services of 20% will not be subject to the income tax as they were in the past years.
For a proper understanding of how micro-enterprises will be taxed in 2018, we invite you to contact our accounting firm in Romania.