The New Microenterprise Regime
As of Feb. 1, 2017, all commercial companies with private capital that made less than 500,000 euros in revenues in the 2016 calendar year will have to adopt (it is therefore mandatory if the conditions are met) the Microenterprise regime, this is what the recent Decree Law 3/2017 amending Law 227/2015 (Tax Code) established . In fact, companies that under the old microenterprise regime had exceeded the previous ceiling of 100,000 euros in revenues in 2016 will still be subject to the regime that applies the 3 percent rate to total revenues without taking into account the tax profit or loss.
The recent Decree also set the exchange rate of 1 euro/4.54.11 ron to determine the threshold exceeded at the end of 2016 when the taxpayer must mandatorily adopt the ordinary 16 percent tax regime. Accordingly, private companies that did not exceed 2,270,550 ron in revenue in 2016 and did not earn more than 20 percent of their revenue from management and consulting activities (and banking activities) are subject to the Microenterprise regime.
Other changes were established by the government measure: specifically, as of February 1, 2017, companies subject to the Microenterprise regime will apply the following rates to determine the tax:
– 1% for companies with at least 1 employee in their employ;
– 3% for companies with no employees.
In effect, the 2 percent rate under previous legislation disappears.
The latest change concerns the possibility for private companies with share capital over 45,000 lei to be able to opt for application of the ordinary 16 percent regime.
The recent legislative amendment is a measure of great significance from the point of view of attracting both local and foreign investors as it ensures that even economic activities with large turnovers (500,000 euros) remain in the Microenterprise advantage regime.
We remain available for any further clarification.
