The government, through the tax increase order (OG 16/2022), introduced changes in the field of micro-enterprises, one of which is related to consulting and management, but they do not have definitions in the legislation. Thus, if the ANAF inspection comes, many companies may find that they have made a mistake in their interpretation of the law.

Dan Barascu, head of the tax department, partner of BDO Romania, spoke on the topic of consulting and management for micro-enterprises at the TaxEU forum.

“Companies that, as of December 31 of the previous fiscal year, receive income from consulting and/or management (with the exception of tax consulting) in percentages higher than 20% of the total income cannot elect a microenterprise income tax payer. “, he reminded.

• What was the will of the legislator in consulting and management? The will was that the M section of CAEN has a fairly high profitability. This section is devoted to consulting activities.

• But I can consult even if it’s not in M. I can consult in all possible CAENs. By law, I am allowed to do this if I specialize in something.

“In section M, as an interpretation, the law should have taken you to that section, so that’s what the legislature was referring to, but it wasn’t just referring to that, it was referring to everything about consultation and management,” he said.

• We will see if there is a definition of consulting somewhere in this micro-enterprise legislation. We won’t find it. So where are we going? Let’s consider what definitions exist.

“What does the “Foreign” section tell us? This tells us that we need to review contracts and other documents that confirm the nature of the income. We are also reviewing the Fiscal Procedure Code, we find something, through the Civil Code, the Civil Procedure Code: they do not have the ability to regulate what is consulting and management,” he explained.

The only definitions of consulting and management in DEX and what to do

Therefore, says Barascu, there is really nothing for us to do: “we are going to the DEX. We have two definitions:

1. Consulting is the activity of a consultant – a specialist who provides conclusions, gives instructions, gives conclusions on issues related to his specialty.

2. Management – all activities related to the organization, management and management of enterprises; the science of business organization and management.

• “We have some incomplete definitions, yes? What should we do?”

“If we talk about consulting, we have to think about the result, what we give and what the beneficiary does with what he receives. If the beneficiary makes a decision based on our advice, it is consultation,” he explained.

If the beneficiary, he says, gives us a mandate to create an architectural project, design, etc., and we accept it as such, submit it to the authorities and get what is required, we get permission, that is, no longer consultation, even if we are talking about Class M sections .

“And if before that we ask the opinion of that architect or designer? Look, I have a project, tell me what it should look like, and after you tell me and my board makes a decision, I’ll hire you to do it for me, but I’m not paying you separately. I pay you once for both results. How do we divide how many are consulting services and how many are non-consulting services?” Barasku explained.

• Then we go to the non-resident zone, and the zone tells us: you have to divide them according to the reasonable parts of the contract so that you can see how much income it is. Would you do that about ANAF? I do not!

“If she was independent, I would say to her: Boss, tell me how much the consultation and another project cost, and if you are still independent, then you see that I would not take this job. Spend less on consulting and more on the project,” said a representative of BDO Romania.

Photo source: Dreamstime.com