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Romania micro company tax rules change announced today

#21
marzio said:
If you already setup the Romanian SRL and 500K turnover is acceptable because your business have low costs and it allows you to hire an employee with minum salary you could pair that with Portual NHR paying 1% total taxes because Romania levies no withholding taxes on dividends to non resident individuls.
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Something OP should take into consideration for sure.
 
#23
I am thinking the deal is:

- Have a Romanian girlfriend.
- Ask her to be your special secretary
- She gives you back the salary money in cash at the end of the month

So in the end, you only pay the social security of the employee.
 
#24
marzio said:
If you already setup the Romanian SRL and 500K turnover is acceptable because your business have low costs and it allows you to hire an employee with minum salary you could pair that with Portual NHR paying 1% total taxes because Romania levies no withholding taxes on dividends to non resident individuls.

The employee also would allow you to protect you from potential PoEM issues even though that Romanian micro company could be seen as a CFC because of the low taxation but probably the fact that the company has an office and an employee would be exempted.
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Yes this is what I thought when I moved here last year. But now they changed the rules and if I'm not mistaken I must employ myself to benefit from the 1% tax and pay like 2500€ a year minimum tax. This apart from the fixed tax seems to overcomplicate things if I want to move abroad somewhere else in the upcoming years.

For example, let's say I want to move to Portugal, I can't be the director of my Romanian company or afaik it will be considered a local company for tax purposes.
 
#27
Bimblis said:
I think you can only employ a Romanian for that condition. You may only be able to employ yourself if you are romanian.
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That is not correct, anyone who has a Romanian NIF or CNP is fine.

pucecacou said:
The 3% rate of the micro company with no employee is dumped already ?
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No, starting January it's 1% with one employee to be eligible.
 
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#29
pucecacou said:
So 1% or 16% but no more 3% ? Hum what's the catch with the "20% consultancy rule" ? Can anyone explain what does it consist and why it's a bummer ? Only briefly heard of it. Cheers
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Yes, it's 1 or 16 for corporate income tax and 8 for dividend from 2023 onwards.

The changes are essentially all in line with what the EU demands, so every other country offering a better deal (e.g. Bulgaria) will have to change that as well in the coming years.
 
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#32
gab1 said:
See article here.

- Dividend tax increases from 5% to 8%.

- Income tax is 1% of turnover, but you MUST have at least one employee. If you have no employees you are not considered micro and therefore will have to pay 16% tax.

- Turnover must be 500k or less.

- Only 20% of the revenue can be from consulting and management

- Must not be banking, insurance, capital markets, gambling, oil and gas

Personally I am more concerned about the 'must employ at least 1 person' thing. Can I employ myself? How much extra is that going to cost me?
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Mot me it is still a good a valid option for the company setup.
 
#35
You're talking about 1% and 500K limit per year. It's great. But what about additionally VAT 19% rate which applies to all supplies of goods and services?
Or is it not applicable to micro-companies?
 
#37
AlexRon said:
You're talking about 1% and 500K limit per year. It's great. But what about additionally VAT 19% rate which applies to all supplies of goods and services?
Or is it not applicable to micro-companies?
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VAT will need to be charged to customers in the EU if you go above the limit for VAT registration, I believe it was EUR75k. If you do B2B or non EU it is irrelevant anyhow and if you do B2C simply add the prevailing VAT rate of the country of residence of your customer onto the invoice and done.
 
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#40
boogieboogie said:
Well that sucks. There were a couple of people in this forum that wanted to create substance in Romania and moved there relatively recently. I myself seriously considered moving earlier this year and ended up postponing it. IMO the worst part is not the tax raise itself, which isn't that high (RO is probably still the best country for small businesses tax-wise apart from UAE), but the precedent that this sets and the unstability of the jurisdiction. Today it's 500k, tomorrow might be 100.

I don't think so, it's still the lowest tax for businesses in the EU (and Europe). But it's like Larin said: Is it worth it to deal with Romanian accountants and law firms, create substance, etc etc... only to have this potentially change from one day to the other? Plus we know that the EU is after that 1% on turnover... I'd be surprised if we don't see another legislation change by 2024 (at the latest).
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Hello,! And Happy new year!!
About the micro regulation in Romania, please be inform that starting with 1January 2024 the max turnover will be 300k, !
Don't bet on the romanian taxation allways is changing during the game,! But you ha e solutions ,. Where are you come from???
 
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