Situation:
A microenterprise, ABC SRL, has only one employee, and their employment contract ends on May 15, 2025. The company does not intend to hire another person.
Question:
From when does the microenterprise become subject to corporate income tax?
Solution:
One of the essential conditions for a company to be classified as a microenterprise and benefit from the microenterprise income tax regime is to have at least one employee. This requirement is regulated by Article 47 paragraph (1) letter g) of the Fiscal Code.
If this condition is no longer met, the respective company becomes subject to corporate income tax.
If an employee’s contract is suspended, the condition regarding the existence of at least one employee is considered fulfilled only if the suspension is less than 30 days and it is the first suspension recorded in that fiscal year. Otherwise, the provisions of Article 52 paragraph (2) of the Fiscal Code apply.
According to Article 52 paragraph (2) of the Fiscal Code:
“If, during a fiscal year, a microenterprise no longer meets the condition provided in Article 47 paragraph (1) letter g), it becomes subject to corporate income tax starting with the quarter in which this condition is no longer met.”
Applying these provisions to this case:
Since the employment contract of the only employee ends on May 15, 2025, and the company does not hire another person, ABC SRL becomes subject to corporate income tax starting with the second quarter of 2025, i.e., from April 1, 2025.
The company is required to notify the tax authorities of this change within 15 days from the date of the event by submitting Form 700 (notification declaration).
This obligation is regulated by:
- Article 55 paragraph (1) of the Fiscal Code:
“Microenterprises falling under the provisions of Article 52 must notify the competent tax authorities of their exit from the microenterprise income tax system, in accordance with the Fiscal Procedure Code.” - Article 88 paragraph (1) of the Fiscal Procedure Code:
“Subsequent changes to the data in the tax registration declaration must be communicated to the central tax authority within 15 days from the date they occur, by completing and submitting the notification declaration.”