According to the Emergency Ordinance no. 42/2017, which completes art. 291 of the Fiscal Procedure Code, a Romanian tax-resident entity that:
- Is the ultimate parent entity (UPE) of an MNE group (Multinational enterprise) with consolidated revenues of EUR 750 million or more, and
- Is required to prepare consolidated financial statements of the group,
must file in a County by Country Report (CbCR) with the Romanian tax authorities within 12 months of the last day of MNE group’s reporting fiscal year.
The Order no.3049/2017, issued by the president of the National Agency for Fiscal Administration (published in the Official Gazette no.894/1047 November 2017) approves the template, content and filing instructions for the:
- Country by Country (CbCR), and
- Notification regarding the quality of the constituent entity of the multinational enterprise group, respectively the identity and tax residence of the reporting entity of the multinational enterprise group (“Notification”).
The legislation is applied to the fiscal years beginning on 1 January 2016.
Romanian resident entities part of MNE (Multinational enterprise) group must notify the Romanian tax authorities if they are the ultimate parent, the surrogate parent of the other Romanian resident entity required to file the CbC report. Alternatively, the Romanian resident entity must notify the Romanian tax authority regarding the identity of the MNE member filling the CbC report and its residency.
An MNE group is any group which includes two or more enterprises resident in different jurisdictions or includes an enterprise that is resident for tax purposes in one jurisdiction and is subject to tax with respect to a business carried out through a permanent establishment in another jurisdiction.
In terms of timing, the following submission deadline apply:
- CBCR: if required to be filed in Romania, CBCR is due to be submitted within 12 months from the last day of the reporting fiscal year of the multifunctional enterprise group.
- Notification: to be submitted in Romania by the last day of the reporting fiscal year of the multinational group, but not later than the legal deadline for submission of the annual corporate income tax return (101 statement) for the preceding fiscal year of the Romanian constituent entity. For the companies for which the fiscal year is similar with the calendar year the deadline is 25th of June 2022.
Penalties
Under the law, failure to provide the CbC report, failure to do so in time or providing incomplete/ incorrect data would trigger the following penalties:
- For failing to file CbC report, the penalty ranges from RON 70.000 to RON 100.000.
- For late filing of a CbC report, or incomplete/incorrect data in a CbC report, the penalty ranges from RON 30.000 to RON 50.000.
If the above situation applies to your company and you need our help to fulfill this obligation, please do not hesitate to contact us.