[ESTABLISHING A BUSINESS ENTITY IN ROMANIA] 403
(including the right of use) used for business purposes may apply the tax exemption on the reinvested profit. There are specific conditions that must be fulfilled as far as the duration of use of such equipment subject to reinvested profit is concerned. Starting from 1 January 2023, the tax exemption on reinvested profit is also applicable for investments in assets used for production and processing activities as well as for assets characterized by re- digitalization. • Profit tax exemption applicable to taxpayers which exclusively carry out innovation and R&D activities during the first ten years of activity. The abovementioned tax incentives are available only for corporate income taxpayers and not for taxpayers applying the microenterprise tax regime. In Romania, in the area of corporate tax, there are two applicable regimes: the standard corporate income tax regime and the microenterprise tax regime. According to the standard corporate income tax regime, the taxable profit is computed based on the following formula: total revenues – (ii) non- taxable revenues – (iii) total expenses + (iv) non- deductible expenses. Companies reporting a turnover lower than EUR 250,000 at 31 December 2024 or during the fiscal year (beginning with 31 December 2025 the applicable threshold will decrease to EUR 100,000; the threshold is calculated reported to the turnover from all the companies directly or indirectly owned by the shareholders with more than 25% of the value/number of shares or voting rights) and meeting the other requirements stipulated by the Fiscal Code – they have at least one employee, have shareholders who do not hold more than 25% of the shares in more than one Romanian legal
entity (direct or indirect) that qualify for the microenterprise income tax regime – will be able to opt for the microenterprise tax regime. This will mean a turnover tax rate of 1% up to a turnover of EUR 60,000) or 3% (after surpassing the threshold of EUR 60,000), regardless of the number of employees. Moreover, the microenterprise tax regime is an optional one, companies being able to choose from the beginning the standard income tax regime, even if they qualify for the microenterprise tax regime. 4.9 Residency and visas The majority of immigration regulations are contained in: Emergency Ordinance no. 102/2005, Emergency Ordinance no. 194/2002, Regulation (EU) No. 492/2011 on the freedom of the movement of workers within the Union and Regulation (EC) No. 810/2009 of the European Parliament and of the Council of 13 July 2009, establishing a Community Code on Visas (Visa Code). The basic rules are as follows: 4.9.1 Residency of EU nationals, citizens of European Economic Area member states and citizens of the Swiss Confederation EU nationals, citizens of European Economic Area member states and citizens of Switzerland (hereafter “ Nationals ”) have in principle free access to the labour market of Romania, under the same conditions as Romanian nationals and to economic activities under the law applicable to Romanian citizens. The entry of Nationals into Romania is visa-free and is exclusively on the basis of a national identity document, passport or of another valid travel document. Concurrently, Nationals can leave Romania by producing the same documents as those presented upon their entry. The exit of Nationals from Romania can only be denied in two cases: (i) they are defendants in criminal cases, and a preventive measure has been taken against them in compliance with the
ILN Corporate Group – Establishing a Business Entity Series
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