The Map of Special Tax Regimes
The tax regimes of micro and small business sit in the special-taxation chapter of the Tax Code: the law provides that special regimes extend to the micro-business and small-business statuses, and each status has its own conditions, rate and duties. This page explains the micro-business regime — the simplest contour, reaching a full exemption — and separately notes the rate-based taxation of small business, which is devoted to its own page. A boundary is noted too: the administrative procedure of granting statuses and the details of accounting are settled by acts of the Minister of Finance, while the list of prohibited activities by a government act — those lists should be reviewed before filing an application.
The Conditions and the Exemption
Micro-business status may be granted to a natural person who does not use the labour of hired persons and independently carries on economic activity from which his aggregate annual income does not exceed thirty thousand lari. Two thresholds are central here: the absence of hired employees and the income ceiling. The law empowers the government to define types of activity to which the thirty-thousand ceiling does not extend, to prohibit particular activities for the status, and to define excluded types of income — these acts draw the practical map. A physical person holding the status does not pay income tax — this full exemption is the core of the regime. The certificate, and the granting and cancellation of the status, follow the procedure established by the Minister of Finance.
The Cases of Cancellation of the Status
The status is cancelled during the current tax year where: the person himself applied to the tax organ for cancellation or for the granting of small-business status; an inventory conducted by the tax organ established that the residue of goods and material stocks exceeds forty-five thousand lari; or the person registered as a VAT payer. The rule following a breach of the ceiling is particularly important: where, within fifteen days of breaching the income limit, the person does not apply for the granting of small-business status, the micro status is cancelled and he leaves the special regime. Upon cancellation, the income existing at that moment becomes subject to taxation: upon receipt of small-business status — in accordance with the rule established for micro business, and in other cases — under the general rule established by the Code. This transitional regime is precisely the point at which a planning error is paid for in money.