Romania micro company tax: what the 1% regime is in 2026
The Romania micro company tax is a turnover tax, not a profit tax. A company that qualifies pays 1% of its revenue, quarterly, regardless of whether that revenue produced a profit or a loss. Corporate income tax, the alternative, is 16% of taxable profit. Everything in the comparison follows from that single structural difference.
From 2026 the regime has one rate rather than two. The intermediate 3% rate was abolished, so a company either qualifies for 1% or falls under corporate income tax. The revenue ceiling is the equivalent of EUR 100,000, and the regime requires at least one employee.
The regime exists to keep small businesses out of a full profit-tax computation, and it does that well. It is not a low-tax scheme: on a healthy margin, 1% of revenue can easily exceed what 16% of profit would have been on the same numbers, and it is due in years when the company loses money.
The rules sit in Title III of the Fiscal Code, whose consolidated text is published by ANAF. They have been amended in most recent years, which is the main reason to check the current version rather than an article written two budgets ago.
The conditions a company has to meet
Qualification is tested as a set. Failing one condition removes the regime, no matter how comfortably the others are met.
| Condition | What it requires |
|---|---|
| Revenue | Not more than the equivalent of EUR 100,000 in the previous financial year, converted at the exchange rate of that year end |
| Linked enterprises | The revenue of enterprises linked to the company is cumulated with its own for the ceiling test, under article 47 paragraph (1^1) |
| Employees | At least one employee with full normal working time, or an equivalent combination of part-time contracts or a remunerated management agreement |
| First employee, new companies | A newly registered company that opts for the regime from its first fiscal year has 90 days from registration to meet the employee condition, under article 48 paragraph (3) of the Fiscal Code as amended by GEO 8/2026 |
| Shareholding | A shareholder holding more than 25% may hold that position in a single micro-company |
| Ownership | Share capital not held by the state or by local authorities |
| Status | Not in dissolution followed by liquidation |
| Activity | Excluded fields include banking, insurance and reinsurance, capital markets, gambling, and oil and natural gas extraction |
| Filings | Annual financial statements filed within the legal deadline |
Three of these cause most of the practical trouble. The employee condition turns a dormant or nearly dormant company into a company with payroll obligations, a monthly D112 return and employment law exposure — a real cost that has to enter the comparison. The shareholding condition catches founders who hold majority stakes in several small companies, and it is checked on substance rather than on the register alone. And the linked-enterprise rule in article 47 paragraph (1^1) is the one that surprises groups: a company with EUR 60,000 of revenue can be outside the regime because an affiliated company has EUR 70,000. The same cumulation is applied again during the year, under article 52 paragraph (5^1), when the ceiling is passed mid-year.
What changed for 2026
| Element | Before | From 2026 |
|---|---|---|
| Rates | 1% and 3%, depending on revenue level and activity | A single 1% rate |
| Revenue ceiling | Reduced in stages over recent years | The equivalent of EUR 100,000, cumulated with linked enterprises |
| Employee requirement | At least one employee | At least one employee, with 90 days from registration for a newly registered company (art. 48 para. (3), GEO 8/2026) |
| Dividend tax on distributed profit | 10% on distributions before 2026 | 16% (Law 141/2025) |
The direction of travel on the ceiling is consistent: the regime is being narrowed. A company that was comfortably inside it two years ago may be outside it now without having grown at all, simply because the ceiling moved and linked revenue now counts. That makes the qualification test an annual exercise rather than a decision taken once at incorporation.
GEO 8/2026 cut the other way on the employee condition. A newly registered company that opts for the regime from its first fiscal year now has 90 days from registration to meet it, under article 48 paragraph (3), which removes a trap that used to catch founders still waiting on a bank account. The same article also treats the condition as met where the single employment relationship is suspended for less than 30 days, once in a fiscal year.
The arithmetic: where the two regimes cross
The comparison reduces to one number. One percent of revenue equals sixteen percent of profit when the profit margin is 6.25%. Below that margin, corporate income tax costs less. Above it, the micro regime costs less.
The table below applies both regimes to a company with revenue of EUR 100,000, at different margins. The figures are illustrative arithmetic on round numbers, not a forecast and not a promise about any particular business.
| Profit margin | Profit | Micro tax at 1% of revenue | Corporate tax at 16% of profit | Lower |
|---|---|---|---|---|
| 3% | EUR 3,000 | EUR 1,000 | EUR 480 | Corporate tax |
| 6.25% | EUR 6,250 | EUR 1,000 | EUR 1,000 | Equal |
| 10% | EUR 10,000 | EUR 1,000 | EUR 1,600 | Micro |
| 20% | EUR 20,000 | EUR 1,000 | EUR 3,200 | Micro |
| 40% | EUR 40,000 | EUR 1,000 | EUR 6,400 | Micro |
| Loss | Nil | EUR 1,000 | Nil, with a loss to carry forward | Corporate tax |
Three qualifications turn this from arithmetic into a decision.
The compulsory employee. For a company that would otherwise employ nobody, the salary and contributions of one employee are a genuine annual cost. On revenue near the ceiling, that cost can be several times the tax saved.
Expense deductibility. Under the micro regime, deductibility is irrelevant — the base is revenue. Under corporate income tax, a business with large legitimate costs benefits from every one of them, and one with significant non-deductible expenses does worse than the headline margin suggests.
Losses. A micro-company pays 1% in a loss-making year and carries nothing forward. A corporate taxpayer pays nothing and keeps a loss that can shelter later profits, within the limits set by the Fiscal Code. For a business investing ahead of revenue, this alone can decide the question.
Leaving the micro regime
Exit is automatic, not elective. The regime ends when a condition stops being met:
- Revenue passes the ceiling during the year. Corporate income tax applies from the beginning of the quarter in which the limit was exceeded, for the whole of that quarter.
- The employee condition is lost. Where the single employment relationship ends, there are 30 days to conclude a replacement contract. The 90-day term applies only to a newly registered company meeting the condition for the first time, not to a replacement. If the window closes unused, corporate income tax applies from the following quarter.
- An excluded activity begins, or the shareholding condition is breached.
The mechanics matter because the switch is retroactive to the start of a quarter, not prospective from a date. A company that passes the threshold in mid-November recalculates the fourth quarter on a profit basis, which means the accounting for that quarter has to support a corporate tax computation that nobody planned for. Whether the company can return to the regime for a later year is governed by the option rules in article 48 and the exit rules in article 52, and it is worth reading those against the version of the Fiscal Code in force for the year concerned before assuming either answer.
Companies that expect to cross the ceiling are better off modelling both regimes from the start of the year, so the quarterly closes already produce the numbers a profit-tax computation needs.
The dividend layer sits on top of both
Neither regime is the end of the calculation for an owner who wants the money out. Profit distributed to shareholders is taxed at 16% from 2026, withheld by the company on distribution or payment.
The total burden therefore stacks. A micro-company that distributes everything it earns pays 1% on revenue and then 16% on the distributed profit. A corporate taxpayer pays 16% on profit and then 16% on what it distributes. For individual shareholders, the health contribution may apply on top of the dividend tax, once total non-salary income reaches a threshold expressed as a multiple of the gross minimum wage.
Because the dividend layer is identical under both regimes, it does not change which of them wins — but it changes the answer to the more useful question, which is how much of the profit reaches the shareholder. The detail is in the guide to dividend tax in Romania.
When 16% corporate income tax is the better position
Corporate income tax is the right regime more often than its reputation suggests:
- Low-margin trading businesses — distribution, wholesale, retail with thin markups — where 1% of revenue is a large share of the actual profit.
- Companies in an investment phase, spending ahead of revenue, where losses have real future value.
- Businesses with heavy deductible cost bases, including significant depreciation on equipment.
- Companies that expect to grow past the ceiling within the year, for which two regimes in one financial year is an avoidable administrative burden.
- Companies carrying out research and development, because the 10% tax credit introduced by GEO 8/2026 is set against corporate income tax and is worthless under a turnover tax — see the article on the Romanian R&D tax credit.
- Companies buying equipment in 2026, which can depreciate up to 65% of the entry value of qualifying new assets in the first year under GEO 8/2026 — again, a base-side benefit that a turnover tax cannot use.
- Subsidiaries of foreign groups, which usually have transfer pricing obligations and intra-group charges that a profit-based regime handles more coherently.
Conversely, the micro regime tends to win for service businesses with healthy margins, low cost bases and at least one employee already on the payroll for commercial reasons.
The errors we see most often
- Treating 1% as the total tax. The dividend layer and the health contribution can more than double what the shareholder actually gives up.
- Testing the threshold in lei only. The ceiling is expressed in euro and converted at a specified exchange rate; a company close to the limit can cross it on the currency alone.
- Losing the employee without noticing. The 30-day window runs from the end of the employment relationship, not from the date somebody in finance finds out.
- Assuming the regime is chosen annually in all cases. Exit during the year is automatic and applies from the start of a quarter.
- Ignoring the shareholding condition when a founder holds majority stakes in several small companies.
- Comparing rates instead of outcomes. The comparison that matters is total cost including the compulsory employee, not 1% against 16%.
How we help
We model both regimes on your own figures — revenue, cost base, planned distributions and the cost of the employee the regime requires — and give you the comparison in writing, with the qualification conditions checked against the version of the Fiscal Code in force for the year. If the answer changes mid-year, we handle the switch: the recalculation for the affected quarter, the corporate tax computation and the returns that go with it. The analysis sits under tax advisory, the ongoing work under accounting, and both run on a fixed monthly fee.
