Finance News by Mazars Romania - April 2021

Mon | 12.04.2021

Accounting/audit/tax

The automotive industry, one year into the COVID-19 pandemic: navigating current challenges, the shift to sustainable mobility, and the tax measures adopted by the authorities - Mazars' analysis

According to ACAROM (The Association of Romanian Automotive Manufacturers), during 2020, the production of cars in Romania reached 438,107 units, registering a decrease of 10.67%, compared to 2019, when 490,412 units were produced. The statistics also showed a downward trend in the case of new cars registered in 2020.

 

Increased demand for sustainable cars

Electric vehicles remain significantly more expensive than other types of cars, even if in the long run fuel and maintenance costs offset this difference. To increase customers' interest in „green" cars, it will be necessary for automotive players to collaborate and identify affordable solutions so that the production cost and implicitly the price to decrease.

At the same time, the authorities are taking measures to improve Romania’s car fleet, which is one of the oldest in Europe. Recently, the Ministry of Environment announced important changes to the Rabla program to support the purchase of new or electric cars. This increases the scrapping bonus (from RON 6,000 to RON 7,500), while the budget for the purchase of electric or plug-in cars will double.

 

The online acquisition of cars has a high potential

2020 was an important year for the e-commerce market, even when we are talking about cars. Manufacturers have launched dedicated sites through which customers can choose their desired car, can check in the stock of which dealer the car can be found, and after completing all the documents, the purchase can be made online, while the delivery will take place at the customer's home or in the showroom. Even though the sales of new cars are on a downward trend, the imports of used cars continue to remain high.

Read more info HERE.

 

Undeterred by COVID-19, dealmaking in the CEE region remained remarkably steady, reveals Mazars’ study

The disruption caused by COVID-19 to CEE’s M&A market was short-lived as dealmaking returned to the fore in the second half of the year, according to a new report published by Mazars in association with Mergermarket.

The report, Investing in CEE: Inbound M&A Report 2020/2021, offers an overview of inbound M&A activity in the CEE region throughout 2020 and looks ahead to the challenges and opportunities in the coming months.

Main conclusions:

  • Four countries continue to dominate the market. The top four countries in deal value terms remained the same as in 2019 – Russia, Poland, the Czech Republic, and Austria.

  • The tech sector flourishes amidst the pandemic. The highest number of inbound deals to the CEE region were technology-based, hitting a total of 57 deals worth €2.5bn – a year-on-year rise of 12% by volume, and 34% by value.

  • Romania registered 40 deals in 2020, down 27% compared to 2019, while the total disclosed deal value came to €1.7bn, which is more than double compared to the previous year. Much of this total was due to the largest deal of the year in the country, which was Macquarie’s acquisition of the Romanian assets of the Czech energy company CEZ for €1bn.

Download the full report HERE.

Read more info HERE.

 

Digital learning: educational challenges, building a learning culture, and adapting along the way - Mazars' analysis

Nowadays, a successful business requires not only competence development to solve current and future business issues but learning experiences for the rapid mastering of new skills, the shaping of new mindsets, and lifelong learning. These learning experiences should be proactive, data-driven, cost-efficient, and transparent, but most importantly, they should be digital.

Mazars, together with e-Learning Company, conducted in December and January a round of focus group discussions among both business and HR leaders, but also entrepreneurs, to debate the digital learning culture in Romania.

Main conclusions:

  • In Romania, before March 2020, the usage of digital learning within the companies was below 1%.

  • Only 1.3% of the Romanian adults were actively involved in a learning program, traditional or digital.

  • The employers are implementing programs to develop what schools aren’t developing.

Read more info HERE.

 

Resilience despite COVID-19: New annual barometer from Mazars shows C-suite surprisingly optimistic about future

Mazars released its new ‘Mazars 2020 C-suite barometer’, a comprehensive report of business executives’ views and outlook for 2021, based on insights from over 500 C-suite leaders around the world.

Main conclusions:

  • 58% expected higher revenue in 2020 than in 2019 and nearly three quarters (71%) expect growth in 2021.

  • Economic and tech trends most likely to impact business in next 3-5 years; businesses confident in their ability to respond.

  • Shift towards longer-term investment suggests businesses are getting ready to reset.

Technological transformation is perceived as relatively likely across all regions, including in Romania. In Eastern Europe, executives see transformation in compliance as essential and 53% expect their business to be a part of one in the next three to five years. Romanian companies are perfectly equipped and will absorb easy.”, mentioned Dino Ebneter, Country Managing Partner, Mazars Romania.

Read more info HERE.

 

Rethinking the future of audit: the four myths of the market that can sabotage your business - Mazars’ study

In September 2020, Mazars released the results of a double-blind survey which was conducted by Edelman Intelligence. The purpose of this survey was to identify the perceptions and needs of various companies within the industry when it comes to audit and their current statutory auditors.

The respondents had to answer several questions regarding their satisfaction with the current stance of the audit, the most important qualities that an auditor should possess, their view regarding the joint audit, as well as other things.

Main conclusions:

  • Vast majority (93%) of audit users think audit needs to be reformed and 87% are favourable to joint audit.

  • More than half of audit users (61%) consider that the primary benefit of an audit process is the assurance and confidence provided by the process, while 34% of them consider that the detection of fraud is the primary one.

  • 96% of all respondents are in favour of using new audit technologies.

Read more info HERE.

 

Transfer pricing and DAC 6 obligations for US multinationals in Romania – Mazars analysis

Transfer pricing (“TP”) has been a hot topic for the Romanian Tax Authorities (“RTA”) in the past 10 years. The number of TP audits has gradually increased during this period together with the amount of additional corporate tax assessed by RTA.

One of the main areas of TP dispute between the RTA and multinational groups in Romania is the requirement to prepare local benchmark studies, in addition to the EU/Pan-European benchmarks that are usually prepared by multinationals to cover European operations.

A common feature of the RTA approach is to deny operating losses registered by group companies, even in cases where the losses may have been generated by difficult economic conditions.

As Romania is not yet an OECD member, the provisions of the OECD TP Guidelines are subject to excessive interpretation by the RTA which may lead to disputes.

 

Mazars prepared a material regarding some aspects US multinationals operating in Romania should analyze to ensure local compliance, from transfer pricing reports, local benchmark studies, CbC reporting to advance pricing agreement – APA and DAC6 reporting.

Read more info HERE.

 

 

This article is provided by our Finance Partner, MAZARS Romania

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