The tax rate for a micro enterprise with one full-time employee amounts to 1% in Romania

The revenue threshold of a micro enterprise will be EUR 1 million, from
January 1, 2018. The tax rate for a micro enterprise, with one full-time
employee, amounts to 1%, whereas the tax rate for micro enterprises with no employees
reaches 3%.

According to the latest changes in the Fiscal Code,  a newly established legal entity is required
to follow the micro-enterprise tax regime starting with the first fiscal year
and will remain under this tax regime if it meets all of the following


1.     The maximum threshold of annual turnover is EUR 1

2.     Income generated from consultancy and management
activities is not more than 20% of the annual turnover;

3.     It does not carry out any banking, insurance and
reassurance, capital markets, gambling or upstream oil & gas activities;

4.     The share capital must be held by entities other than
the state or the local authorities.


As long as the micro-enterprise continues to meet all of the above
criteria, its status will remain.

Any newly registered legal entity with a share capital of at least RON
45,000 may choose to become a corporate income taxpayer as of its date of

Any existing micro-enterprise with a share capital of at least RON
45,000, as well any existing micro-enterprise that increases its share capital
up to this threshold may also opt to become a corporate income tax payer.

As from February 1, 2018, companies that are qualified as corporate
income taxpayers, but their annual revenues fall below the threshold of EUR 1
million will have the obligation to apply the micro-enterprise tax regime.


Taxation on micro-enterprises

Micro-enterprises are taxed on their turnover. Micro-enterprises with at
least one full-time employee are subject to a tax rate of 1% imposed on the
business income, representing RON 1.000. Moreover, the firm has to pay to the
state the imposed social contributions (pensions, health, work contribution)
and the income tax for each employee. One should know that micro-enterprises
with no employees are subject to the business income tax of 3% imposed on
profits generated in one fiscal year.

Taxpayers of income tax like companies with a turnover of more than EUR
1 million may choose, according to the Fiscal Code, for the calculation,
declaration, and payment of profit tax on a yearly basis or for quarterly


What is the threshold for micro-enterprises in


The modifications of the Fiscal Code for 2018 mention that the income
tax is applicable for micro-enterprises with revenues under EUR 1 million
registered in 2017. This rule does not apply for juridical entities with
activities in the banking sector in Romania.


Tax deductions for micro-enterprises in Romania


According to the Fiscal Code for 2018, micro-enterprises in Romania can
also benefit from tax deductions. More specifically, they may fall to 20% of
tax for sponsorship, for the quarter in which the expenditures were registered.
This feature is applicable starting with the second quarter of 2018. For a
proper understanding of the new business and tax rules for micro-enterprises in
Romania, it is best to talk to one of our accountants in Romania. They can help
small, medium and large entrepreneurs align with the tax regulations imposed by
the Fiscal Code and its modifications.


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