“Tax Reform” from January 1, 2018


As part of the “Tax Reform” from January 1, 2018, changes in legislation come into effect, including the Law on the Tax on Microenterprises. In fact, two basic tax rates are introduced – 15% and 20%, as well as an additional rate. The decision on whether to retain business as a microenterprise should be taken before December 15.

At the moment, in case of an annual turnover of up to 7,000 euros, the tax rate is 12%, and drom 7,001 to 100,000 euros – 15%.

The tax on microenterprises is a single tax payment, which includes the following taxes:

  • compulsory state social insurance contributions, personal income tax, state duty for business risk for microenterprise employees;
  • Income tax from enterprises, if the micro-enterprise meets the criteria of the enterprise income tax payer;
  • Income tax from the people of the microenterprise owner for a part of the income of the microenterprise’s economic activities.

If the microenterprise did not have a turnover during the taxation period (in the calendar year) or the accrued tax on microenterprises does not exceed 50 euros, then a tax of 50 euros is transferred to the budget.

Now the maximum permissible turnover of microenterprises should not exceed 100 000 euros, and from the year of 2018 – 40 000 euros.

Starting from January 1, 2018, the 15% rate will be applied only for turnover up to 40,000 euros, then an increased rate of 20% comes into effect.

The transitional rules of the law provide for special conditions for those taxpayers whose turnover in 2018 or 2019 does not exceed 52,000 euros. In 2018, these micro-enterprise tax payers are entitled not to apply a rate of 20% to exceeding the allowable turnover, that is, amounts exceeding 40,000 euros if their turnover in 2017 or turnover in 2016 exceeded 40,000 euros. In 2019, these taxpayers can use this tax on microenterprises, which turnover in 2017 did not exceed 40,000 euros.

From next year the employee will be able to work only on one microenterprise. Therefore, from January 1, 2018, the SRS will no longer be registered as an employee in a microenterprise, if it is employed in another similar enterprise.

But the law does not stipulate compulsory dismissal. For those persons who work at several microenterprises as of December 31, 2017, the mentioned restriction will be introduced only from January 1, 2019.

The State Revenue Service (SRS) promises to inform all owners of the Electronic Declaration System (EDS) by February 1, 2018 about employees who work for other business people.

Since 2019, an additional tax is imposed on “extra” workers, that is, those who work simultaneously at several microenterprises.

If the employee continues to work simultaneously in several microenterprises at the same time in 2019, then two percentage points for each such employee are added to the tax calculation, and from the year 2020 such companies will lose the status of microenterprises.

Prior to this date, taxpayers can apply to the SRS to refuse or apply for a taxpayer status on microenterprises.

Current taxpayers from microenterprises, who want to keep this status next year, do not need to file an application with the SRS.

The tax service calls for a decision, assessing the changes in the legislation, which will come into force next year.

Applications can be filled in a free form and sent to the SRS by mail or submitted in the electronic declaration system of the SRS.