References: EOG 42/2017; Law 207/2015; Directive UE 2016/881;
In the Official Gazette no. 438/13.06.2017 it was published the Emergency Ordinance no. 42 for implementing in domestic legislation the provisions of the UE Directive 2016/881 regarding the automatic exchange of information (these provisions follow Action 13 initiative of OECD Base Erosion and Profit Shifting (BEPS) Action Plan).
You may find below the main amendments brought by the mentioned Emergency Ordinance.
Purpose of the reporting
The Emergency Ordinance is introducing the obligation of the Ultimate Parent Entity of a Multinational Enterprises group (MNE group), tax resident in Romania, to submit a country by country report (CbC). The report may be submitted also by a Surrogate Parent entity appointed by the MNE group to file the CbC report.
The information communicated by the Member States to each other through the CbC reports is used to assess the high-level transfer pricing risks and other base erosion and profit shifting risks, including risk assessment of non compliance by members of the Group with applicable transfer pricing rules and, where appropriate, for economic and statistical analysis.
The Emergency Ordinance is applicable for all the entities part of a MNE Group having total consolidated group revenue in the fiscal year immediately preceding the Reporting fiscal year higher than EURO 750 millions (calculated at the BNR exchange rate of 4,4877 lei). In addition, the Ordinance is applicable only for the entities that are required to prepare Consolidated Financial Statements for financial reporting purposes under applicable accounting principles.
Content of the report
The country-by-country report must include the following:
The template and the content of CbC report will be approved by order of the National Agency for Fiscal Administration president.
The deadline for submitting CbC report is 12 months from the last day of the reporting fiscal year of the group. The filing obligation applies to CbC reports for reporting fiscal years beginning on or after January 1, 2016.
The Romanian entities part of a MNE group subject to this EOG must notify Romanian tax authorities whether they are the Ultimate Parent Entity or a Surrogate Parent Entity that has the obligation to submit the CbC report.
However, if the Romanian entity does not qualify as the Ultimate Parent Entity or a Surrogate Parent Entity, it shall notify the Romanian tax authority of the identity and tax residence of the reporting entity appointed by the MNE group to file the CbC report.
These notifications have to be submitted until the last day of the Reporting fiscal year but no later than the last day for filing the tax return for the preceding fiscal year.
The template and the content for the notifications will be approved by order of the National Agency for Fiscal Administration president.
Failure to comply with the requirements of the Ordinance would trigger the following sanctions:
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