1. Micro-enterprises:
  • The turnover threshold for applying the micro-enterprise income tax is changed from EUR 1.000.000 equivalent to EUR 500.000 equivalent in lei. This condition regarding the threshold must be fulfilled on 31.12.2022 for 2023. Suppose a company that pays micro-enterprise income exceeds the turnover threshold of EUR 500.000 during the fiscal year. In that case, it will pay corporate income tax starting with the quarter when the limit was exceeded.
  • Companies can apply the micro-enterprise income tax if their revenue from all sources, other than consultancy and/or management, is over 80% of their total revenue.
  • To be eligible to pay micro-enterprise income tax, a company must have at least one full-time employee or several part-time employees collectively covering a full-time employee’s working hours. Therefore, the old alternative of 3% income tax for micro-enterprises without employees does not exist any longer, and only the 1% income tax remains.
  • The micro-enterprise income tax will become optional, and companies can no longer opt to pay profit tax during the current fiscal year, but rather starting with the next fiscal year.
  • A shareholder may hold 25% of the value/titles/voting rights in a maximum of three Romanian legal entities that are eligible for the micro-enterprise income tax system.
  1. Dividend tax:

The dividend tax rate is increased from 5% to 8% for dividends paid by a Romanian legal entity to a Romanian legal entity, a Romanian individual shareholder/investor, or a non-resident of Romania.

Moreover, the individuals that receive dividends also owe the health insurance contribution (CASS) as follows:

  • A 10% contribution applied at the total amount of 6 minimum gross salaries at the time of submission of the tax return, if the net income is between 6 and 12 minimum gross wages;
  • A 10% contribution applied at the total amount of 12 minimum gross salaries at the time of submission of the tax return, if the net income is between 12 and 24 minimum gross wages;
  • A 10% contribution applied at the total amount of 24 minimum gross salaries at the time of submission of the tax return, if the net income is over 24 minimum gross salaries;

The health insurance contribution (CASS) is not owed for net dividend income below six minimum salaries.

Our team of professional is available for any clarifications or additional details required in your analysis. The above information represents just a summary of aspects we consider relevant in the recently published legislation. This is not exhaustive disclosure of information and it is not intended to be used as advice on any particular matter. We invite all readers to contact us for further clarification of any specific issue. Argus Audit team and its associates disclaim liability in any action taken by a third party in reliance exclusively on summarized information presented in our publications.