All companies with private capital  that earned up to 500,000 euros in revenue in 2016 are required to change their tax system by becoming a taxpayer on microfinance income. Basically, no private company with income under this ceiling can not  pay a 16%  tax rate, but is forced to apply the tax regime for micro-enterprises. The only companies that escape this obligation are those with social capital of at least 45,000 lei, who can choose which tax system they apply (micro or profit tax).

Regarding the ceiling to which a legal company  can qualify as a micro-enterprise, it has grown from 100,000 euros, as it was from 1 January 2016, to 500.000 euros. Accordingly, a micro-enterprise is considered to be a legal entity  if  in the previous financial year did not exceed revenues of 500,000 euros, equivalent in lei, this means  five times more than the previously established ceiling.

In addition to the increase of the ceiling for the "micro enterprise" category, OUG no. 3/2017 introduces a 1% tax rate for micro-enterprises with at least one employee hired under an employment contract. Previously, single-employee businesses applied a 2% tax rate, except for those newly established, who could, by way of exception to the aforementioned rule, apply a reduced rate of 1%.

Henceforth, a tax rate of 1% or 3% is applied to companies organized as micro-enterprises, as follows:

• 1% tax rate for micro-enterprises with at least one employee;

• 3% tax rate for micro-enterprises that do not even have an employee.

The companies covered by the new provisions of this Law  will file the income tax return, Form 101, by 25 February 2017 at the latest (for period January 1-31, 2017).

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