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Small businesses in Romania for

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In this video I would like to show you the advantages of a microenterprise in Romania.

A micro or small business is a full-fledged company without any limitation, but it does not exceed a certain annual turnover.

In Germany, for example, the threshold is EUR 17,500 per year. If you stay below this amount with your annual turnover, you are exempt from value added tax or sales tax. That means you can't show them on an invoice - and you can't pay them off either.

For example, if I charge a customer 119.00 EUR for a product or service, the VAT of 19%, in this case 19 EUR, is shown for non-small businesses.

In this example, these taxes go directly to the German tax office. Of course, you can add expenses invoices and thus reduce the VAT to be paid - but very often this can be done only very slightly or not at all.

If there is nothing to be expected against this, the entrepreneur has EUR 100.00 in income left over.

The situation is different in a micro company: The invoice of 119.00 EUR is the final amount - for which no 19% sales tax or 19 EUR have to be paid.

Now to our special case in Romania:

The total turnover there, depending on the exchange rate from the Romanian LEI to EUR, is currently around €70,000 per year in order to be exempt from sales tax.

Within the EU, this seems to be one of the most liberal small business regulations and thus creates a considerable competitive advantage - especially for startups and small businesses.

A small business owner can generate a monthly turnover of almost EUR 6,000 without having to worry about VAT. As a result, an entrepreneur has up to 19% more profit left. In Romania, the sales tax rate is also 19%.

This can be a huge advantage over the highly competitive markets. Not only in classic product sales or within providing various type of services, but also on very transparent platforms or markets such as:

Amazon, ebay, Dropshipping, Shopify, etc.

The savings potential extends to all areas in most cases.

As I said, this regulation ONLY applies to small businesses who do not make more than just under EUR 6,000 in sales per month.

Whether for large companies or companies subject to VAT, the income tax burden in Romania is also one of the lowest in the EU.

Income tax for companies in Romania:

Variant a) no employees or staff:

3% tax on sales up to 1 million per year or 16% tax on profit or, in principle, 16% if this was chosen voluntarily.

Variant b) One or more employees:

1% tax on sales up to 1 million per year or 16% tax on profit or generally 16% if this was chosen voluntarily.

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  • Thorben P.

    Published on 20 January, 2020 / Answer

    Good article! Thank you

  • Jetter

    Published on 28 October , 2022 / Answer

    60.000 EURO turnover per year without paying sales tax is not a small amount at all. Over 5k per month.