The most efficient tax vehicle for deriving income in Romania, is incorporation of a Romanian Limited Liability Company that would qualify as "Microenterprise".
However, certain criteria should be met to qualify as a Microenterprise and certain risks should be carefully evaluated from both individual perspective and from the non-resident entity perspective (if implicated in such a transaction) before implementation of such structure.
The taxes that would be payable under such a scheme would be:
- 3% turnover tax to the income derived by the Microenterprise;
- 10% to the dividends paid at the end of the year to the individual shareholder (only if certain conditions are met);
- social contributions that could be due from the owner perspective, (however their cost in absolute figures could be minimised);
For such a structure it should be also considered bookkeeping costs and salaries cost for at least one employee.
Among the criteria that should be met by a Limited Liability Company (LLC) for qualifying as a Microenterprise are:
- should have as object of activity: production of material goods, provision of services and/or trading activities;
- should have between 1 to 9 (inclusive) employees;
- the income derived should not exceed 100,000 EURO/year;
It would not qualify as a Microenterprise, Romanian legal entities that:
- carry out banking activities;
- carry out activities in insurance, reinsurance, and securities market. An exception from this rule is for "intermediaries" in the previous mentioned fields;
- carry out activities in gambling, betting, and casinos;
- have as shareholder a legal entity that have more then 250 employees.
It is envisaged that this structure should exist until Romania would receive EU membership (at earliest in 2007).
© 2003 - 2011 Global Tax Services S.R.L. All rights reserved.
Information contained in this site is not a tax advice and consequently can not be used as such. Issuance of a tax opinion for a certain case, can be made only following a complete analysis from a tax, economic and accounting perspective, using all relevant information available for that specific case. Global Tax Services SRL is not responsible in any way for any use of information contained in this site by third parties.