We remind taxpayers that as of January 1, 2023, income tax on microenterprises is optional. Art. 47 par. (1) of the Tax Code, as amended and supplemented, defines microenterprise as a Romanian legal entity that cumulatively meets the following conditions, as of December 31 of the previous fiscal year:

– earned income that does not exceed the countervalue in lei of 500,000 euros – The exchange rate for determining the countervalue in euros is the one in effect at the end of the fiscal year in which the income was recorded;

– its registered capital is held by entities other than the state and administrative-territorial units;

– is not in dissolution, followed by liquidation, registered in the commercial register or in court, according to law;

– earned income, other than consulting and/or management income, with the exception of tax consulting income, corresponding to CAEN code: 6920 – “Accounting and financial control activities; tax consulting,” in excess of 80 percent of total income;

– Has at least one employee, except for the newly established company;

– has partners/shareholders holding more than 25 percent of the value/number of equity securities or voting rights in no more than three Romanian legal entities qualified to apply the tax regime on microenterprise income.

The condition regarding the ceiling of 500,000 euros applies from the income of the year 2023 for the income for the year 2022, the ceiling is 1,000,000 euros. (Legal basis: Article IX (e) from G.O. NO. 16/2022, amended by Law No. 370/2022).

micro-enterprises that become taxpayers in 2023 due to non-compliance with the conditions set forth in Article 47 par. (1) of the TUF, which are obliged to notify the tax authority of their exit from the tax regime by March 31 inclusive of the 2023 tax year, by submitting Form 700 “Declaration for the registration/amendment in the telematic environment of the declared tax obligation categories entered in the tax carrier.”

Please contact the firm to confirm this fulfillment