Micro-enterprise in 2026: when the regime stops being a fit
Micro-enterprise in 2026: when the regime stops being a fit
Key point: The micro-enterprise regime remains the cheapest way to hold a Romanian company with one asset: 1% of turnover instead of profit tax, and minimal bookkeeping. It has one limitation, and it is not about the size of the company: under this regime, expenses do not reduce the tax at all. Below: what counts toward the threshold and what does not, why buying a property does not break the regime, at what point 1% of turnover becomes more expensive than 16% of profit, and what an owner who already has two properties should do.
The micro-enterprise regime remains the cheapest way to hold a Romanian company with one asset: 1% of turnover instead of profit tax, and minimal bookkeeping. It has one limitation, and it is not about the size of the company: under this regime, expenses do not reduce the tax at all. Below: what counts toward the threshold and what does not, why buying a property does not break the regime, at what point 1% of turnover becomes more expensive than 16% of profit, and what an owner who already has two properties should do.
What is the micro-enterprise regime, and when does it stop being a fit?
It is a tax on turnover instead of a tax on profit: the company pays 1% of its revenue regardless of its margin or whether there is any profit at all. Since January 1, 2026 there is a single rate — the former second rate of 3% has been abolished.
It stops being a fit for two reasons, and they carry different weight. The first is known to everyone: revenue has exceeded the threshold, and the company is moved to profit tax compulsorily. The second is far more common and is almost never calculated: expenses have grown, the margin has fallen, and 1% of turnover has become more expensive than 16% of profit — even though the threshold is still far away.
The second reason is what this article is about. For the owner of one or two apartments in Constanța, the threshold is a distant figure; the economics of the regime change much earlier.
What conditions must be met to stay on the regime?
The conditions are checked as of the end of the previous year, and all of them must be met at once.
The basic one — revenue for the previous year no higher than 100,000 euros in the lei equivalent. The threshold has been lowered step by step: until 2024 it was 500,000 euros, in 2025 it was 250,000, from 2026 it is 100,000.
For 2026 the figure is checked against revenue as of December 31, 2025.
Next come the structural conditions: the capital belongs to private persons, the company is not in liquidation, and the annual financial statements were filed on time. Separately, there are activities for which the regime is closed — banking, insurance, gambling, oil and gas extraction, and also consulting and management when such revenue makes up a high share.
Sources interpret the requirement to have an employee differently since the second rate was abolished, so for a specific company it is confirmed as of the date, not carried over from someone else's article.
What counts toward the threshold, and what does not?
The threshold includes the revenue that makes up the company's accounting turnover. The key word here is revenue: not assets, not the account balance and not the transaction amount.
This leads to a direct consequence that clears up the main misunderstanding of the topic. Buying a property does not create revenue — it creates an asset. The money used to buy the property is not revenue either: a share capital contribution, a shareholder loan, a bank loan, retained earnings from previous years — none of these amounts count toward the 100,000 euros. It is impossible to buy a second property and drop out of the regime through the purchase itself.
What really counts is the rental income from the properties. And it is not counted for one company alone: revenue is checked together with the revenue of linked enterprises. Splitting turnover between two linked firms and staying on the regime in both will not work.
The sale of a property is a separate matter: the sale of a single fixed asset does not count toward the threshold, but with two or more sales they are taken into account.
What happens if the conditions are no longer met?
There are two ways out of the regime, and they work differently.
Compulsory: revenue for the year exceeded 100,000 euros. The company moves to profit tax from the quarter in which the threshold was exceeded, with no right to return to the regime until the end of that year. No application is required, and no notice comes.
Voluntary: the company itself decides to move to profit tax while still meeting the regime's conditions. There is a time restriction here — this cannot be done during the year. The option takes effect from the next tax year, it is reported on form 700, and the filing deadline is March 31 of the year from which the new regime applies.
Hence the practical conclusion: the decision to change regime is made in advance, before the end of the year, not when it has become clear that you are already overpaying. A missed March costs a whole year on the wrong regime.
A second property has been bought, but expenses do not reduce the tax: what should you do?
Calculate the ratio of revenue to expenses, not the threshold. The threshold has nothing to do with it — the margin does.
The picture is typical. The company held one apartment: the rent came in, there were almost no expenses, and 1% of turnover looked like a gift. A second property is bought — and everything appears that was not there before: renovation and furnishing, interest on the shareholder loan, depreciation, insurance, maintenance, vacancy between tenants. Under profit tax, each of these amounts would reduce the base. Under micro, none of them do: 1% is taken from turnover, even if the year closes at a loss.
The analysis covers three situations.
First: expenses are small, the margin is high — the regime is still profitable, nothing needs to change.
Second: renovation and interest have eaten up the margin, and the calculation shows that 16% of profit is cheaper than 1% of turnover — then the switch is planned for the next year, with the filing made by March 31.
Third: revenue together with linked enterprises is approaching the threshold — then the switch will happen on its own, and it needs to be caught in advance so you are not recalculating retroactively.
The mistake here is not buying a second property. The mistake is that the regime was chosen once when the company was registered and never revisited.
How to calculate in advance: expenses, dividends and the total cost of ownership
What you need to calculate is not the company's tax but the entire path of the money to the owner. Since January 1, 2026 dividends are taxed at 16% versus 10% a year earlier.
The total cost of ownership is made up of three parts: the company's tax, the cost of maintaining the structure and the tax on dividend payouts. Micro wins with low turnover and a high margin. Profit tax wins where there are real expenses: investment in the property, interest, depreciation, loss-making years.
On top of this come requirements that are triggered automatically by turnover figures: the threshold for registering as a TVA payer with a rate of 21% and the share capital — 500 lei for new companies, 5,000 lei with net turnover above 400,000 lei. The tax side of buying a property in the company's name is covered separately, in the article on TVA when registering an apartment to a Romanian company.
The decision on a specific company is made by ANAF: applying the regime cannot be guaranteed, but the structure can be built so that there are no questions about it. The timelines, the amount and the working procedure are in the contract.
What is important to decide before the end of the year
The regime is not a property of the company but a choice that is tested by the numbers every year. Buying a property does not change it; the ratio of revenue to expenses does.
Will the company drop off the regime if it buys a second property? No. A purchase does not create revenue, and the money for it — a capital contribution, a shareholder loan, a credit — does not count toward the threshold. Only revenue takes you off the regime, including the revenue of linked enterprises.
Can you move to profit tax in the middle of the year? No. Such a switch is not possible during the year: the option applies from the next tax year and is reported on form 700 by March 31.
The exception is the compulsory exit when the threshold is exceeded; it happens from the quarter.
How can you tell the regime has become unprofitable? Compare 1% of annual turnover with 16% of actual profit after all expenses. If the second is smaller, the regime is working against you, and you need to work this out before the end of the year.
Book a free compliance assessment: we will review your situation based on your documents and give you a written opinion — a calculation under both regimes using your figures, the threshold including linked enterprises, TVA and share capital obligations, and the filing deadline if you change regime. And a straight answer: whether this structure suits you. The assessment is free and does not oblige you to anything.
Write to us in the Telegram chat @alliance_consulting_SRL — we will review your situation.
Sergey Valentinovich Kononov is the head of the consulting company Alliance Consulting (Constanța, Năvodari). Over 30 years of management experience; the company has run a licensed practice in Romania for four years and supports clients from the first consultation to receiving their documents. The company's licenses and documents are publicly available on the website.