Fin Min: Companies with turnover below EUR 1m will pay 1pc tax on turnover instead of 16pc of the profit

Finance Minister Ionut Misa has announced on Thursday a major change for 450,000 companies with a turnover below EUR 1 million. Misa has announced in the Government sitting that these companies will pay as of next year a 1% tax on turnover instead of the current 16% tax on profit.

“We have changes that will encourage the business environment. For 450,000 companies with a turnover below EUR 1 million, a 1% tax will be imposed on the turnover against the 16% tax on the profit as paid now,” Misa said, according to hotnews.ro.

The Minister of Finance has also announced another amendment to the Tax Code: companies will no longer be prosecuted for VAT fraud “unless there is material evidence that the agent has come in contact with escapist firms. Now prosecution is started on the basis of a simple suspicion,” Misa added.

He also stated that “in this way it is eliminated the situation where VAT is not deductible because a company had a commercial relationship with the fourth or fifth company on a chain that had created a chain of tax evasion.”