Local companies with a share capital of at least RON 45,000 (EUR 9,700) and minimum two employees will be able to opt from next year for the 16% profit tax instead of the 1% turnover tax, Romania’s Senate decided yesterday.

The amendment also needs the approval of the Chamber of Deputies.

The Government has recently increased from EUR 500,000 to EUR 1 million the turnover threshold below which companies will have to pay the tax on turnover. The senators kept the threshold established by the Government, but introduced the possibility for small companies with two or more employees to opt for another type of tax. Some 96% of the Romanian companies with a turnover below EUR 1 million meet these requirements, according to data from the Finance Ministry.

The Senate yesterday approved the Government’s emergency ordinance bringing important changes to the Fiscal Code, including the transfer of social contributions from employers to employees and the individual income tax cut from 16% to 10%. These measures should enter into force at the beginning of next year.

The Chamber of Deputies will also discuss the fiscal changes and may introduce new amendments.

editor@romania-insider.com