Although the choice of the type of sole proprietor/ self-employed freelancer existing in Romania seems to be at the free choice of entrepreneurs, in reality it is influenced by the activity which is performed, more precisely, it is about the romanian NACE codes specified in the Romanian Order no. 925/2017. Pavel Margarit and Associates Romanian Law Firm recommends to contact a lawyer specialized in corporate, commercial and tax law in Romania, considering the fact that the type of sole proprietor/ self-employed freelancer existing in Romania, which suits on the activity carried out, will influence the entire legal status of the sole proprietor/ self-employed freelancer in Romania, especially being about the tax payment procedure for sole proprietors/ self-employed freelancers in Romania.
The procedure for registering a sole proprietor/ self-employed freelancer in Romania
The procedure for registering a sole proprietor/ self-employed freelancer in Romania is mainly governed by the provisions of the Romanian Government Emergency Ordinance no. 44/2008. According to it, the sole proprietor/ self-employed freelancer must have its main office in Romania, regardless of the type of activity carried out, being required to be registered in the Trade Register in Romania, competent according to the office thus chosen.
There are certain typical conditions provided in the Romanian legislation, which must be met in order to carry out an activity in Romania, mentioning as an example the full capacity of the natural person. In addition to these conditions that must be respected and interpreted ad literam, the documents that must be submitted to the Romanian Trade Registry in order to start the procedure for registering a sole proprietor/ self-employed freelancer in Romania are of particular importance, which is why Pavel Margarit and Associates Romanian Law Firm recommends to contact a lawyer specialized in corporate, commercial and tax law in Romania, considering the strictness and accuracy required in drafting or submission of the documents by the Romanian authorities, as well as due to the Romanian provisions in this matter, the analysis of which must be done strictly.
The legal legal status of the sole proprietors/ self-employed freelancers in Romania
The legal legal status of the sole proprietors/ self-employed freelancers in Romania will be mainly influenced by the type of sole proprietors/ self-employed freelancers existing in Romania,applicable, on a case-by-case basis. Thus we mention two types sole proprietors/ self-employed freelancers in Romania, namely with income norm and in real system. The difference between these is given by the way in which the Romanian income tax and the Romanian mandatory social contributions, that must be paid to the Romanian authorities, are calculated, respectively what is the basis of the calculation from which to start. The annual gross income achieved must also be taken into account, exceeding the threshold established by the Romanian Law, determining the transition to the real system.
Of interest is the fact that not every sole proprietors/ self-employed freelancers in Romania can choose the taxation based on the income norm, but only those that carry out certain activities established by the Romanian authorities. Pavel Margarit and Associates Romanian Law Firm recommends to contact a lawyer specialized in corporate, commercial and tax law in Romania, who can guide you in understanding the Romanian applicable provisions, given the fact that there are certain Romanian NACE codes that determine the application of the taxation regime based on the norm of income, so the choice of the object of activity must be made wisely, taking into account the applicable consequences.
Tax payment procedure for sole proprietors/ self-employed freelancers in Romania
The sole proprietors who are taxed in real system pay a tax of 10% of their net income. Taxation with income norm implies the application of a 10% to a predetermined amount, called “income norm”, regardless of the income realized by the proprietor. Regardless of the chosen taxation method (in real system/with an income norm), if the total annual income on the basis of which the tax due is calculated is higher than the minimum wage in the economy multiplied by 12 months (or, for newly established proprietors with the number of months of the activity), then the proprietors also owe pension and health contributions
Pavel Margarit and Associates Romanian Law Firm has vast experience, within it working lawyers specialized in corporate, commercial and tax law, who assist and represent countless clients, both Romanian and foreign, at the stage of drafting the necessary documents and also in relation with the Romanian authorities, when necessary.
Pavel, Margarit and Associates Romanian Law Firm recommends contacting a lawyer specialized in corporate, commercial and tax law who can guide interested parties in choosing the most suitable and advantageous system for carrying out their activity as sole proprietors/ self-employed freelancers in Romania.
The procedure for registering a sole proprietor/self-employed freelancer in Romania requires having a main office in Romania and being registered in the Trade Register according to the chosen office. Certain conditions must be met, and specific documents need to be submitted to the Romanian Trade Registry. It is recommended to consult a lawyer specialized in corporate, commercial, and tax law in Romania to ensure compliance with the strict requirements and accurate document submission.
The legal status of sole proprietors/self-employed freelancers in Romania is influenced by the type of sole proprietorship/self-employment chosen. There are two types: income norm and real system. The difference lies in how the income tax and mandatory social contributions are calculated, based on different criteria. The transition to the real system is determined by exceeding the annual gross income threshold established by Romanian law. Not all activities allow for taxation based on the income norm, and it is important to consider the applicable Romanian NACE codes and their consequences when choosing the object of activity.
The tax payment procedure for sole proprietors/self-employed freelancers in Romania depends on the chosen taxation method. For those taxed in the real system, a tax rate of 10% is applied to the net income. Taxation with the income norm involves applying a 10% rate to a predetermined amount, regardless of the actual income. Additionally, if the total annual income exceeds the minimum wage multiplied by 12 months, pension and health contributions are also owed by the proprietors.