The Chamber of Fiscal Consultants (CCF) analyzed a Finance Ministry draft that seeks to clarify the problem of related enterprises, a concept introduced by the Çolaku government last year but which applies from 2024.

According to the consultants, in its current form it does not resolve all the reported uncertainties, and they have sent a letter to the Ministry about this. The problem is that entrepreneurs have until March 31 to determine the applicable tax regime, and the legislation has problems with interpretation.

See also: Do ​​you have several companies and do you collectively exceed €500,000? None of them can be in the micro mode anymore / New clarifications of the Ministry of Finance

“Therefore, we understand that under the new regulations, starting January 1, 2024, an associate/shareholder may hold, directly or indirectly, more than 25% of the value/number of shares or voting rights in a single company, paying micro-enterprise income tax, and we also understand that the new paragraph (4) of Art. 47 also acts as a transitional provision for actual situations registered on December 31, 2023,” the CCF said in a statement.

Thus, if the same associate owned (directly or indirectly) as of December 31, 2023 more than 25% in two or three micro-enterprises, by March 31, 2024, only one of the enterprises must be created, which will remain a micro-enterprise income tax payer , the rest will be subject to income tax, including for the 1st quarter of 2024.

In other words, the possibility of designating one company for the application of the tax regime for micro-enterprises in 2024 does not depend on the transfer of holdings to other companies until December 31, 2023, but no later than the first quarter. 2024, since the goal of the regulation on the application of the micro-enterprise taxation regime by only one such company has been achieved.

“The ambiguity of the problem that remained unresolved in the current GEO project, accordingly, the need for clarification is imposed by the fact that the current paragraph h) of Art. 47 par. (1) if we take into account the fact that letter h) is one of the conditions that must be met collectively to be able to apply the micro-enterprise regime, it concerns the holdings of associates/shareholders of more than 25% of the value/quantity of participation securities or voting rights,” reports the Chamber of Fiscal Consultants.

• “(1) For the purposes of this section, a micro-enterprise is a Romanian legal entity that, as of December 31 of the previous fiscal year, collectively meets the following conditions:

[…]

h) has associated companies/shareholders who own, directly or indirectly, more than 25% of the value/quantity of participation rights or voting rights, and is the only legal entity established by the associated persons/shareholders for the application of the provisions of this title;”

“In the spirit of the law, as it follows from the will of the legislator, expressed in the accompanying note, amending clause h) of Art. 47 par. (1) situations where the ownership percentage of 25% of the value/number of shares or voting rights is exceeded (directly or indirectly), in such a case, the number of micro-enterprises owned by such shareholder/associated person is limited/reduced for the application of this taxation system to an individual micro-enterprise” , – it is also stated in the CFP.

According to the consultants, this was not taken into account when adopting GEO no. 115/2023 and an amendment to the micro-enterprise taxation rules in a situation where the company is owned only by shareholders/associates holding less than 25% of the value/quantity of participation rights or voting rights (eg 5 associated companies with 20% each), although the usual reading the text of the law can easily lead you to such a conclusion because of the less successful form in which it is drafted.

Therefore, in their opinion, such a company, existing on 12/31/2023 or newly created during 2024, can apply the micro-business regime under the conditions in which other conditions provided for in Art. 47 par. (1) are performed.

“Such an interpretation corresponds to the declared purpose of the changes introduced by GEO no. 115/2023, as follows from the explanatory note. In addition, we would like to note that even at the time of adoption of OG no. 16/2022, which is the norm from letter z) of Art. 47 par. (1) of the Fiscal Code, valid until 31.12.2023, the legislator did not intend to limit the application of the micro-enterprise taxation regime to associations/shareholders who would have less than 25% of the value/number of shares or voting rights, but, on the contrary, to limit the number of micro-enterprises, owned by an associate/shareholder with more than 25% ownership, to a maximum of 3 commercial companies that can apply this micro-enterprise tax regime, vice versa In case of ownership of more than 25% in more than 3 commercial companies, the associated persons/shareholders had to choose 3 commercial companies companies that could be taxed as micro-enterprises,” says the CCF.

The organization also proposed changes to the articles to make them easier to interpret.

Other issues that the Chamber of Tax Consultants mentions in the letter (click to open) relate to:

• Exiting the micro-entrepreneurship taxation system and submitting a declaration of information for exiting the micro-entrepreneurship system

• The method of determining the minimum turnover tax by subtracting from the volume of total revenues those “excise taxes that were simultaneously reflected in the accounting of costs”

• Minimum turnover tax (IMCA)