What tax caps do we have in 2023?

Each year we have a series of tax ceilings updated according to the euro/leu exchange rate for that year. These cover both the classification of companies as micro-enterprises and various VAT ceilings and the classification of PFAs.

The main categories of tax ceilings set for 2023 are detailed below.

Micro-enterprise threshold:
The applicable ceiling for micro-enterprises starting with revenues for the year 2023 is 500,000 euros, i.e. 2,473,700 lei. The exchange rate for determining the equivalent in euro is that valid at the close of the financial year in which the income was recorded.

The exchange rate valid for 31 December 2022 is 4.9474 lei/euro.

VAT registration threshold – €88,500 or 300,000 lei:
Taxpayers domiciled in Romania according to art. 266 para. (2) lit. a) of the Accounting Law with declared or realized annual turnover exceeding the threshold of 88.500 € are obliged to register for VAT purposes. The exchange rates of affiliates are determined and rounded to the nearest thousand or 300.000 lei. However, intra-Community supplies by new modes of transport are an exception and are exempt under Art. 294 (2) lit. The reference turnover for the application of the ceiling of 300.000 lei will consist of the total pre-tax value when a taxable person complies with the de-registration of registered persons.

VAT ceiling: 100.000 euro, i.e. 494.740 lei:
The exchange rate communicated by the NBR on 30 December 2022 valid for 31 December 2022 is 4.9474 lei/euro.
The RON equivalent of the EUR 100,000 ceiling provided for in Article 322(2)(a) of the Treaty is (2) of the Tax Code, in any case, is determined on the basis of the exchange rate communicated by the National Bank of Romania valid for 31 December of the previous year, including for taxable persons applying for registration for VAT purposes, according to Article 316 of the Tax Code, during the year.

Ceiling for the changeover from VAT on collection to normal VAT: 4,500,000 lei:
Taxable persons registered for VAT purposes according to Art. 36, who have their place of business in Romania according to Art. 266 para. (2) letter a), whose turnover in the previous calendar year did not exceed the threshold of 4,500,000 lei.

The turnover for the calculation of the ceiling of 4.500.000 lei is constituted by the total value of supplies of goods and services taxable and/or exempt from VAT, as well as the transactions resulting from economic activities for which the place of supply is considered to be abroad, according to art. 275 and 278, carried out during the calendar year.

The ceiling for intra-Community acquisitions in the case of non-payers of VAT is EUR 10,000 or RON 34,000 (exchange rate communicated by the NBR on the date of accession).

For intra-Community acquisitions of goods, the ceiling of EUR 10,000 provided for in Article 268(2)(a) of the VAT Code is EUR 10,000. (4) letter b) of the Fiscal Code, applicable during a calendar year, is determined on the basis of the exchange rate communicated by the National Bank of Romania on the date of accession and is rounded to the nearest thousand. Rounding is done by increasing when the number of hundreds is equal to or greater than 5, and by reducing when the number of hundreds is less than 5, therefore the ceiling is 34,000 lei.

The following elements are taken into account when calculating the ceiling for intra-Community acquisitions of goods:

• the value of all intra-Community acquisitions of goods, with the exception of acquisitions referred to in paragraph 1. (7);
• the value of the transaction leading to the ceiling for intra-Community acquisitions of goods being exceeded;
• the value of any import carried out by the non-taxable legal person in another Member State, for goods transported to Romania after import.

Distance selling ceiling: 10,000 euro, i.e. 46,337 lei:
The threshold for taxable persons carrying out the operations referred to in Art. 275 para. (2) of the Tax Code is 10,000 euros, i.e. 46,337 lei, and is made up of services rendered to non-taxable persons in other Member States and supplies of goods transported to another Member State, according to Art. 2781 of the Tax Code.

PFA ceiling – income norm/real system: 100,000 euro, i.e. 492,040 lei:
Taxpayers for whom the net income is determined on the basis of income rules and who in the previous tax year had a gross annual income greater than the RON equivalent of 100,000 euros, starting with the following tax year, are required to determine the net annual income under the real system. The exchange rate used to determine the RON equivalent of 100,000 euros is the average annual exchange rate communicated by the National Bank of Romania at the end of the tax year.

The average EURO value for 2022 is 4.9315 lei/euro.

Starting with the income for 2023, the ceiling is reduced to €25,000. Thus, if in 2023 taxpayers for whom the net income is determined on the basis of income rules will have a gross annual income higher than the RON equivalent of 25,000 euro (calculated at the average annual exchange rate communicated by the National Bank of Romania at the end of 2023), in 2024 they will be obliged to determine the net annual income in the real system.