PFA vs SRL in Romania (2026): which actually pays less tax?

The short answer

It depends on how much you earn and where the money ends up. At low revenue, a PFA is usually simpler and cheaper. As revenue grows — and especially if you leave profits inside the company rather than paying them out — an SRL often wins.

The real answer is arithmetic, so the best approach is to run your own numbers through the Romania calculator with both entity types and compare the net result.

How a PFA is taxed in 2026

A PFA (persoană fizică autorizată) pays 10% income tax on net income, plus CAS (pension, 25%) and CASS (health, 10%). The contributions are not charged on the full amount: they are tied to fixed thresholds based on the minimum wage, and CASS is capped at 24 minimum wages.

In the real system tax is applied to revenue minus deductible expenses, so keeping justified receipts directly reduces your tax base. That is the single biggest lever a PFA has.

How an SRL micro-company is taxed in 2026

A micro-company SRL pays a 1% tax on revenue, then 10% dividend tax on what you distribute. If you also take a salary, that salary carries the normal employee CAS, CASS and income tax.

Because the 1% is charged on revenue rather than profit, an SRL becomes less attractive when your margins are thin — a large revenue with few expenses can cost more than it looks.

How to compare them fairly

• •Compare the money you actually take home, not the headline rate.
• •For a PFA, model realistic deductible expenses — not zero.
• •For an SRL, decide up front how much you will distribute as dividends versus reinvest.
• •Remember the 1% micro-tax is on revenue; test both a high-margin and a low-margin case.
• •Add the cost of accounting, which is higher for an SRL.

When a PFA usually wins

• •Lower annual revenue, where thresholds keep CAS/CASS low.
• •Simple activity with limited expenses and no need for a separate legal entity.
• •You want minimal admin, no monthly accounting and lower setup cost.

When an SRL usually wins

• •Higher revenue where the 1% micro-tax is small relative to profit.
• •You want to leave profits in the business instead of paying them out each year.
• •You need limited liability, multiple clients as contracts, or investors.

What people get wrong

• •Assuming the 10% flat tax is the whole story — CAS and CASS dominate at lower incomes.
• •Forgetting that dividend tax is on top of the micro-company tax.
• •Ignoring the accounting and admin cost of running an SRL.
• •Not re-testing every year, because thresholds and rates change.