Finance News by Mazars Romania August 2023

Thu | 31.08.2023


The Romanian tax reform: fiscal policy options and directions for labour income taxation, by Mazars

Through the National Recovery and Resilience Plan (NRRP), Romania has committed to reforming the tax system for several reasons. To achieve this, the International Bank for Reconstruction and Development (IBRD) published a report with fiscal recommendations for Romania.

Among others, the introduction of progressive taxation of wage income and the elimination of exemptions in the IT, construction, and agriculture sectors were proposed by the IBRD’s experts.


In a recent material, Mazars’ experts, Lucian Dumitru, Tax Partner, and Andreea Ignătescu, Tax Manager, highlighted the most important recommendations and tackled what has been implemented in Romania so far, as well as what comes next.

Read more info HERE.


OECD Pillar 2 GloBE: Preparing for a different tax future, by Mazars

More than 140 jurisdictions have now signed up in principle to the global minimum tax framework, representing a ground-breaking plan to update key elements of the international tax system, which is no longer fit for purpose in a global and digitalised economy.


Status of implementation in Romania

Positioned as one of the pioneering countries in the OECD's initial agreement, Romania has adhered to the Pillar 2 principles. Demonstrating its commitment, Romania has undertaken the obligation to implement the UE Directive 2022/2523 on ensuring a global minimum level of taxation for both multinational enterprise groups and large-scale domestic groups within the European Union, by the end of 2023.


Large multinational groups operating in Romania should proactively start analysing and evaluating the potential impact of Pillar 2 by simulating the calculation of the Effective Tax Rate (ETR).


Romania's progressive position aligns with its aspirations to foster a business-friendly environment that attracts investment and innovation. As the landscape evolves, businesses need to navigate the legislative changes, supported by Mazars' expertise, which serves as a compass in guiding companies toward compliance and shaping a resilient business landscape.


Mazars is already supporting clients on their Pillar 2 GloBE journey with their Pillar 2 tool to support data point calculations and help track Pillar 2 GloBE country-by-country progresS.


Read more info HERE.


Enhancing Tax Certainty: OECD's Manual on Multilateral MAP & APA Procedures, by Mazars

Considering that most jurisdictions have limited experience in coordinating multilateral APA and MAP procedures, OECD published the Manual on the Handling of Multilateral Mutual Agreement Procedures and Advance Pricing Arrangements (‘the Manual’), with the purpose of providing assistance, and acting as a guide, both for legal and procedural aspects, based on the practice of the jurisdictions involved.


Multilateral APA and MAP procedures are considered appropriate in transfer pricing cases, as these ensure a higher tax certainty compared to bilateral solutions. Also, these can be applied in case of hybrid entities, in case of dual-residence or multiple-residence issues or for profit attribution to permanent establishments.


The Manual details the legal basis for administering multilateral cases, the procedural aspects and also includes specific examples and a recommended timeline for these cases.

As there is no clear definition of a multilateral case for APA or MAP procedures, there is no consensus on when multilateral procedures would be appropriate.


In most cases, it is expected that such cases can only be handled and resolved if bilateral tax treaties are in place among all jurisdictions involved.


Mazars’ tax professionals wrote a material regarding this subject.


Read more info HERE.


Doing business guide - unlock investment opportunities in Romania, by Mazars

Mazars is pleased to present their comprehensive guide, 'Doing Business in Romania', which has been meticulously crafted to provide a detailed overview of the Romanian market, offering insights into the process of establishing a business, understanding the taxation system, labour laws, accounting regulations, and audit requirements.


Whether you're planning to invest in Romania or already own a business here, Mazars’ guide will equip you with the knowledge to navigate the Romanian business landscape with confidence. Stay ahead of the curve by understanding the local business environment, legal requirements, and cultural nuances that can impact your business operations.


Download the publication below, and let it be your ultimate roadmap to achieving your business goals in this dynamic market.


Read more info HERE.


CEE Tax & Payroll Newsletter, by Mazars

The CEE Tax & Payroll Newsletter aims on sharing Mazars’ latest news on tax, labour, and payroll legislation in Central and Eastern Europe, with the scope of helping you to prepare for the changes that could lie ahead in the following countries: Austria, Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia, Slovenia, and Ukraine.


Insights to guide you through today’s evolving regional tax, labour, and payroll landscape

  • Navigating new norms: tax trends and regulations in Europe for 2023 by Dániel H. Nagy, Partner, Head of Tax and Legal Services, Mazars, Hungary.
  • More than a payroll market trend, digitisation continues to shape the way we work, how we get paid for it, and everything in between by Hanna Andziak, Senior Manager of Innovation and Optimisation Department, Mazars, Poland, and Ton Meesters, Partner, Outsourcing and Payroll, Mazars, Netherlands.


Read more info HERE.


This article is provided by our Finance Partner, MAZARS in Romania

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