The Micro-business Tax Act permits existing and newly-formed businesses to acquire micro-business status and register for MBT if they meet certain criteria. In general, MBT status provided for the option to pay MBT at the standard rate based on a micro-business’s revenue of up to EUR 40,000 which covered payroll taxes, business risk duties, and CIT. As of 1 January 2021 the extensive amendments have been introduced into MBT normative regulation.

As of 1 January 2021 limited liability companies (LLC’s) cannot acquire MBT status; for the existing LLC’s with MBT status, there is a transitional period of one year after which this status will be withdrawn. 

The revenue limit is reduced from EUR 40,000 in a calendar year to EUR 25,000. Applicable tax rate below this figure is 25%, above - 40%.

As of 1 January 2021 only the shareholder of the company having MBT status will be considered MBT payer, whereas the remuneration of the new employees of such company will be subject to payroll taxes at the standard rates. For the existing employees, there is a transitional period providing for the application of payroll taxes as of 1 July 2021.