In the coming year of 2024, significant modifications are set to take place regarding corporate taxation. Here are the primary alterations that will be implemented.

Conditions for inclusion as a micro-enterprise in Romania

The most important changes concern the classification of companies as micro-enterprises.

If until 2023 you had the right to hold more than 25% of the value/number of shares or voting rights in no more than three micro-enterprises, from January 1, 2024 things change. Thus, you will be able to own, directly or indirectly, more than 25% of the value/number of shares or voting rights in just one micro-enterprise. The rest of the companies will switch to profit tax.

Also, in order to remain a micro-enterprise, you must ensure that you are not late in submitting your annual financial statements. Thus, the deadline of March 31, 2024 appears, by which you must make sure that you have no unsubmitted balance sheets for previous years, and if there are, submit them. Otherwise, the company will be classified as a corporate tax payer.

The calculation method for the micro ceiling also changes, which means that the limit of 500,000 euros is calculated by adding up the income of the micro-enterprise with the income of the enterprises related to it, as defined by Law no. 346/2004.

What else is changing for micro-enterprises in Romania?

1. The 3% rate is reintroduced: Starting January 1, 2024, companies that have a turnover below 60,000 euros and/or that do NOT carry out their main or secondary activities in IT, Horeca, legal activities, healthcare and health, will pay 1 %. Instead, companies with a turnover between 60,000 euros and 500,000 euros and/or carry out main or secondary activities in the mentioned fields, will pay 3%.

2. Facilities for HoReCa are disappearing: This means that HoReCa companies can be classified as micro only if they have at least one full-time CIM employee or a mandate contract. In addition, it must respect the ceiling of 500,000 euros. Another disadvantage for this domain is the tax rate, which, as mentioned before, will be 3%.

Important:

1. If you want to set up a company, you should know that you can opt to pay microenterprise income tax starting from the first fiscal year, if the eligibility conditions are met at the time of registration in the Trade Register. The condition of having at least one employee must be met within a maximum of 30 days from the date of establishment (date of registration in the Trade Register).

2. If the employment contract is suspended for more than 30 days, or has been suspended before, then the company will be reclassified as a profit tax payer.

3. If a company has only one full-time employee, but the contract is suspended as a result of child-rearing leave, then the company remains classified as a micro-enterprise.

4. Starting from January 1, the ceiling for micro is 500,000 euros!

5. If a company does not cumulatively meet all the conditions for micro, it will become a corporate tax payer, even if the turnover is below the ceiling.

What does not change for companies in Romania?

Although there are many tax changes, there are also aspects that remain unchanged.

Tax on dividends in Romania

For now, it is calculated the same as in 2023, by applying the 8% rate. In addition, a 10% health insurance contribution (CASS) will be paid for dividends received as follows:

• the level of 6 gross minimum wages per country, if the dividends received are between 6 and 12 gross minimum wages per country

• the level of 12 gross minimum wages per country, if the dividends received are between 12 and 24 gross minimum wages per country

• the level of 24 gross minimum wages per country, if the dividends received are above 24 gross minimum wages per country.

Profit tax in Romania

Companies that pay corporate income tax still apply the 16% rate. This category includes companies that do not opt for the micro regime, and those that no longer meet the conditions for micro:

1. until December 31, 2023 you have at least one full-time employee

2. the turnover is achieved in a proportion of at least 80% from other activities less consulting and management

3. on December 31, 2023, you had a turnover below the ceiling of 500,000 euros.

What happens if you have a suspended company in 2023 and resume your activity in 2024?

In order to remain a micro-enterprise, you must ensure that on the date of resumption of activity you meet the conditions valid on January 1, 2024 for micro-enterprises. Otherwise, you will be classified as a corporate tax payer. That means you have 30 days to make a hire.