How to choose an activity code when establishing a company?
One of the first tasks when entering the process of starting your own business is the choice and registration of the main activity. According to the regulations outlined in the Law on Business Companies, it is imperative to declare the predominant activity, signifying those pursuits which the company anticipates engaging with most extensively.
The predominant activity denotes the primary source of revenue and profit over the course of the fiscal year. Additionally, legal provisions permit the undertaking of supplementary activities not explicitly prohibited by law, irrespective of their inclusion in the founding documents or organizational statutes. This means that, in addition to your main activity, you can also perform others, provided that it does not require a special permit. The key is that most of the business transactions comes from the predominant activity.
Activity codes for entrepreneurs
Entrepreneurs contemplating the adoption of a flat tax rate should be aware that certain activities are ineligible for such taxation.
Carefully choosing the code of the predominant activity has a significant impact on the amount of taxes, and it is often observed that future entrepreneurs make this decision routinely, without realizing the potential consequences. In practice, it is often advised as “the most common routine matter”, however, the selection of this code can significantly affect the amount of future tax obligations to the state. Choosing the code of the predominant activity also determines the status of flat taxation, the obligation to have a fiscal cash register and the need for business space.
Flat rate taxation, although it may be the optimal solution in certain situations, requires a serious analysis of the individual needs of entrepreneurs. Every entrepreneur goes through phases in which keeping the books allows him lower taxes, while at other times the lump sum option becomes more favorable. The key is the ability to provide a predominant activity code that enables the option of flat-rate taxation, adaptability to changes in business development and the ability to choose the most optimal tax model at a given moment.
For entrepreneurs adhering to bookkeeping practices or operating as a limited liability company (d.o.o.), the significance of the activity code diminishes.
Special permits and licenses
Certain sectors necessitate meticulous adherence to regulatory protocols, mandating specific permits, licenses, or approvals for registration. These sectors encompass a broad spectrum, including but not limited to: employment mediation, court interpreter services, arms trade, pharmaceutical products trade, legal practice, exchange and banking services, and the operations of insurance companies. Moreover, the issue extends to the feasibility of registering identical activity codes for both limited liability companies (LLCs) and entrepreneurial endeavors.
In these specialized domains, entry into the market is contingent upon obtaining requisite permissions, ensuring compliance with stringent regulatory frameworks. Activities such as employment mediation demand official authorization, while sectors like arms trade and pharmaceuticals are subject to stringent oversight due to their potential societal impact. Similarly, professions such as law and financial services, including exchange and banking, necessitate accreditation to safeguard consumer interests and maintain market integrity. Furthermore, the insurance sector operates within a highly regulated environment, requiring comprehensive licensing to ensure financial stability and consumer protection.
Furthermore, the compatibility of activity codes between LLCs and entrepreneurial ventures warrants consideration. While certain codes may overlap, distinct legal structures often entail nuanced registration processes and regulatory obligations. Hence, entrepreneurs navigating these sectors must meticulously navigate the intricacies of regulatory compliance, safeguarding against potential legal repercussions and ensuring the seamless operation of their ventures.
Activities without the obligation to have a fiscal cash register
Areas that are not mandatory for recording retail transactions and received advances via electronic cash registers include:
sale of own agricultural products at markets and similar places;
Operations requiring fiscalization, whereby charges for rendered services or goods sold to individuals are computed through consumption accounts based on metered utilities (such as heating, gas, telephone, electricity, water, etc.).
Rendering marketing services within retail establishments to corporate entities and entrepreneurs.
Where can I find activity codes?
On the shared PDF document you can find the classification of activity codes:
It is important to emphasize the importance of carefully choosing the code of the predominant activity when registering business entities. This choice has a direct impact on tax obligations, the status of flat taxation, the obligation of the fiscal treasury, and other aspects of the business. Proper analysis of the individual needs of an entrepreneur or legal entity in relation to the activity code enables the optimal choice of tax model. It is important to raise awareness of the potential consequences of these decisions in order to enable optimal business practices and compliance with legal requirements.