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The return to microcompanies

On 30th of December 2010 the Romanian Government introduced through the O.U. no. 117/2010 the possibility to return to the status of microcompany.

In the understanding of this ordinance, the microcompany is a legal entity that at 31st of December 2010 meets ALL the following conditions:

  1. has incomes other than those obtained from banking, insurance, reinsurance, capital markets (except the intermediary in these areas), gambling, consultancy and management.
  2. has minimum 1 and maximum 9 employees
  3. achieved revenues that did not exceed the equivalent in lei of 100.000 EUR
  4. the registered capital is held by persons, other than state and local authorities

On 30th of December 2010 the Romanian Government introduced through the O.U. no. 117/2010 the possibility to return to the status of microcompany.

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On 30th of December 2010 the Romanian Government introduced through the O.U. no. 117/2010 the possibility to return to the status of microcompany.

In the understanding of this ordinance, the microcompany is a legal entity that at 31st of December 2010 meets ALL the following conditions:

  1. has incomes other than those obtained from banking, insurance, reinsurance, capital markets (except the intermediary in these areas), gambling, consultancy and management.
  2. has minimum 1 and maximum 9 employees
  3. achieved revenues that did not exceed the equivalent in lei of 100.000 EUR
  4. the registered capital is held by persons, other than state and local authorities

On 30th of December 2010 the Romanian Government introduced through the O.U. no. 117/2010 the possibility to return to the status of microcompany.

On 30th of December 2010 the Romanian Government introduced through the O.U. no. 117/2010 the possibility to return to the status of microcompany.

In the understanding of this ordinance, the microcompany is a legal entity that at 31st of December 2010 meets ALL the following conditions:

  1. has incomes other than those obtained from banking, insurance, reinsurance, capital markets (except the intermediary in these areas), gambling, consultancy and management.
  2. has minimum 1 and maximum 9 employees
  3. achieved revenues that did not exceed the equivalent in lei of 100.000 EUR
  4. the registered capital is held by persons, other than state and local authorities

On 30th of December 2010 the Romanian Government introduced through the O.U. no. 117/2010 the possibility to return to the status of microcompany.

In the understanding of this ordinance, the microcompany is a legal entity that at 31st of December 2010 meets ALL the following conditions:

  1. has incomes other than those obtained from banking, insurance, reinsurance, capital markets (except the intermediary in these areas), gambling, consultancy and management.
  2. has minimum 1 and maximum 9 employees
  3. achieved revenues that did not exceed the equivalent in lei of 100.000 EUR
  4. the registered capital is held by persons, other than state and local authorities

The income tax for small companies is optional, meaning that the companies that meet the above conditions may choose to pay this tax, or may choose to pay the profit tax of 16%.

The companies that have been microcompanies since their start-up and were “forced” to opt for profit tax in 2010, may now return to the status of microcompanies starting with 2011, if they meet all the conditions listed above. Also, the companies that didn’t pay taxes as microcompanies can choose for this status if they meet all the same conditions.

A Romanian legal entity that was newly formed in 2011 may choose for the income tax for small companies, if at the beginning of fiscal year at the moment of registration meets ONLY the condition from point d) stated above, as well as the condition from point b), meaning at least one employee, that must be satisfied in maximum 60 days from the registration of the company.

The tax rate for small company’s income is 3%.

The fiscal year for a small company is the calendar year.

The option to return to microcompany status must be made by each legal entity that is interested until 31st of January 2011.