Sursa foto: Pixabay
The provision that the threshold for SMEs to qualify for the 1% income tax decreases from €1 million to €500,000 from 1 January 2022 has disappeared from the government ordinance. On Thursday, the draft ordinance, published on the Finance Ministry’s website, contained this provision. The form published on Friday, which is due to go to the government meeting, no longer provides for this threshold to be lowered.
UPDATE Prime Minister Nicolae Ciucă has confirmed that the reduction of the tax threshold for micro-enterprises has been dropped.
“Because we have seen a number of debates generated by the issue of lowering, as of 1 January 2022, the threshold for classification as a micro-enterprise from €1 million to €500 thousand, I would like to clarify this right now. The Government will not approve such an initiative, Romanian entrepreneurs need a predictable and friendly environment to develop and consolidate their honest business”, said Ciucă, at the beginning of the government meeting.
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According to the form published on Thursday, companies with a turnover of more than €500,000 would have to pay a 16% tax on profits from 2022 instead of 1% on turnover.
More specifically, the threshold would be lowered from €1 million to €500,000. As a result, companies with a turnover of more than €500,000 would have to pay 16% tax on profits instead of 1% on turnover from 2022.
The explanatory memorandum to the emergency ordinance cites the provisions of the National Resilience and Recovery Plan (PNRR) as the reason. The problem is that in the PNRR the measure has a target date of the first quarter of 2023 and provides for a gradual lowering of the threshold without imposing a specific limit.
In other words, the PNRR was invoked arbitrarily, and the decision comes a year ahead of the target assumed by the government in the agreement with the European Union.