Romania has implemented Country-by-Country Reporting (CbCR) requirements in line with the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13 initiative, which aims to increase tax transparency and address aggressive tax planning by multinational enterprises (MNEs). This guide provides CFOs and financial executives with a clear understanding of Romania’s CbCR requirements, including applicability, submission procedures, penalties for non-compliance, and relevant resources to ensure full compliance.

Applicability of CbCR in Romania

Criteria for Reporting:

• CbCR obligations apply to multinational enterprise groups with annual consolidated revenues of at least 3,732,862,500 romanian leus (RON) in the preceding fiscal year.
• The obligation to file the CbC report lies with the ultimate parent entity of the multinational group if it is tax resident in Romania.
• If the ultimate parent entity is not tax resident in Romania, a Romanian constituent entity may be required to submit the report under certain conditions, such as if the parent company’s jurisdiction does not have CbCR requirements or does not participate in the automatic exchange of CbCR data with Romania.

Relevant Legislation:

• Romania implemented CbCR as part of the Fiscal Code (Law No. 227/2015) and aligned its domestic regulations with the EU Directive 2016/881 (also known as the DAC4 Directive). These laws form the legal basis for CbCR obligations in Romania.

Reporting Requirements

Information to be Reported:

• The CbC report must contain the following information for each tax jurisdiction in which the multinational group operates:
  • Total revenues (segregated into related-party and unrelated-party revenues)
  • Profit or loss before income tax
  • Income tax paid and accrued
  • Stated capital and accumulated earnings
  • Number of employees
  • Tangible assets (excluding cash or cash equivalents)
• The report should also include a list of all constituent entities within the group, their tax jurisdictions, and their primary business activities.

Form and Submission:

• The CbC report must be prepared in the OECD XML format, which ensures global consistency and facilitates the automatic exchange of data.
• The report must be submitted electronically to the Romanian National Agency for Fiscal Administration (ANAF), which is the regulatory authority responsible for CbCR in Romania.
  • More details on submission procedures can be found on the ANAF website.

Filing Deadlines

• The CbC report must be filed within 12 months following the end of the MNE group’s fiscal year. For instance, if the fiscal year ends on 31 December 2023, the CbC report must be submitted by 31 December 2024.
• Additionally, Romanian constituent entities must notify ANAF by the last day of the fiscal year regarding the identity of the entity responsible for submitting the CbC report (whether it is the ultimate parent entity or a surrogate parent entity).

Penalties for Non-Compliance

Penalties:

• Non-compliance with CbCR obligations in Romania may result in the following penalties:
  • Failure to file the CbC report or filing it late can lead to fines of up to RON 100,000 (approximately €20,000).
  • Filing inaccurate or incomplete reports may result in additional fines or further audits from ANAF.
  • Failure to submit the necessary notification or providing false information can result in penalties, with fines of up to RON 50,000.

Defences:

• MNE groups may invoke reasonable cause in cases of non-compliance, such as technical difficulties or administrative errors. However, leniency is not guaranteed, and strict compliance with deadlines and accuracy is recommended.

Confidentiality and Use of Information

Data Protection:

• The CbC reports submitted to ANAF are treated as confidential and are used primarily for risk assessment purposes. The Romanian tax authority uses the information to evaluate transfer pricing risks and detect potential BEPS-related activities.
• Romania is a member of the Multilateral Competent Authority Agreement (MCAA), which ensures the automatic exchange of CbCR information with other signatory jurisdictions under strict data protection standards established by the OECD.