Business Categories: Definitions and Classifications

An entrepreneur is considered any natural or legal person acting within the scope of their independent economic or professional activity.

As a taxpayer, an entrepreneur is legally obligated to pay taxes, fees, or social and health insurance contributions, as well as to withhold tax at source.

A tax regime is independent of the form of organization or the legal personality of a person with the status of a merchant.

The determining factor is the turnover realized during a tax period (calendar year).

According to the tax regime to which they belong and the tax obligations they have under each regime, entrepreneurs are divided into the following categories:

• Taxpayers of Corporate Income Tax and Value Added Tax (VAT).
• Taxpayers of Simplified Corporate Income Tax and Value Added Tax (VAT).
• Taxpayers of Simplified Corporate Income Tax.

Tax Liabilities per Category

Taxpayers of Corporate Income Tax and Value Added Tax

The tax liabilities, namely the tax obligations payable by them, are

• Value Added Tax (VAT)
• Corporate Income Tax (Profit Tax)
• Personal income tax on employment (in the form of withholding tax);
• Personal income tax on services performed by third parties, dividend distribution, etc. (in the form of withholding tax);
• Social security contributions;
• Health insurance contributions;
• National taxes (depending on the type of activity/field of application);
• Local taxes.

Taxpayers of Simplified Corporate Income Tax and Value Added Tax (VAT)

The tax liabilities, namely the tax obligations payable by them, are

• Value Added Tax (VAT)
• Simplified Corporate Income Tax;
• Personal income tax on employment (in the form of withholding tax), for the employee;
• Personal income tax on services performed by third parties, individuals (in the form of withholding tax);
• Social security contributions;
• Health insurance contributions;
• National taxes (depending on the type of activity/field of application);
• Local taxes.

Taxpayers of Simplified Corporate Income Tax

The tax liabilities, namely the tax obligations payable by them, are

• Simplified Corporate Income Tax;
• Personal income tax on employment (in the form of withholding tax), for the employee;
• Personal income tax on services performed by third parties, individuals (in the form of withholding tax);
• Social security contributions;
• Health insurance contributions;
• National taxes (depending on the type of activity/field of application);
• Local taxes.

Source: General Directorate of Taxes.