New taxation pushes PFAs toward microenterprises
It appeared in the Ziarul Financiar of March 3, 2016 the macroeconomic data regarding the 50% reduction in January 2016 compared to the previous January 2015 in the number of PFA (the individual VAT number). The figure should be read not as a symptom of a slowdown in economic activity in Romania but rather in coordination with the changes in force since 1.1.2016 regarding taxation and contribution of Romanian sole proprietorships.
Proving that this is not a crisis but “migration” is the support of the resilience of the number of companies opened in January 2016 compared to the previous year (slightly decreased by 2.5 percent). New taxation pushes PFAs toward microenterprises!
After all, it is evident that if the new Tax Code provides PFAs with a higher 10.5 percent (CAS) contribution calculated on net income and instead a decrease to 5 percent taxation on microenterprise dividends, every economic entity will tend to reprogram their business into an LLC.
As a reminder, in addition to the dividend tax decrease, a micro Ltd. discounts 3 percent tax on total revenues, with a limit of 100,000 euros per year in maximum revenues in order not to switch to the ordinary regime.
