Finance News by Mazars Romania - December 2021

Wed | 22.12.2021

Accounting/audit/tax

The new world of work calls for an improved compensation strategy: flexible working, mental health programs, and agile leadership – Mazars’ analysis

In every organisation, both employers and employees are struggling, especially in the last period. On one hand, the executive team is dealing with the issue of employee retention, and on the other hand, the workers want to be understood, they want to feel valued, protected, and safe.

Flexible working is the most wanted employee benefit in 2021

Although this is still a topic that is debated in the public space, the way that we will work in the future will be completely different from the one we were used to before the pandemic started. According to a Gartner study, 75% of their employees affirm that they expect a flexible work schedule, and from what we have witnessed in the market, most companies have already incorporated this flexibility into their list of benefits. The employers who will insist on returning fully to the office will have to manage the resignations of 40% of their employees, who have expressed their intention to leave those employers who will not integrate the remote or hybrid work schedule. Even the employees who are working in the retail sector have expressed that they wish to choose their work schedule in shifts, instead of this being imposed on them, which will put a lot of pressure on the big players in this sector. Also, the pressure to adapt the work schedule to the needs of employees is felt bolt in the construction and telecom sectors.

The COVID-19 pandemic has also brought to light the inability of the education systems to deliver in atypical conditions, which put a lot of employees, who are also parents, in difficulty. Some of them chose to quit their jobs, while others chose to work late at night to compensate for school hours and thus ended up with episodes of exhaustion and the need for psychological counselling. Certainly, this period tests our limits, but it also gives us the opportunity to find solutions, so that we can overcome the challenge of retaining specialists.”, mentioned Cătălina Călinescu, HR & Payroll Director, Mazars Romania.

Read more info HERE.

 

VAT collection: the main issue of the Romanian authorities, which may be solved through digitalisation – Mazars’ analysis

The European Commission published the VAT Gap report for 2019. The good news is that, at the European Union (EU) level, the VAT collection rate has increased again, and Member States have lost about €7bn less than the previous year. However, if we look at the absolute value of the VAT amount that the tax authorities have failed to collect, the losses are still significant - €134bn.

The European Commission highlights the negative impact of VAT revenue losses, which amounted to €4,000 per second in 2019, and explains their magnitude. These amounts, which Member States have failed to collect, could have been used for the construction of 250 hospitals or 2,500 km of highways. The forecasts for the coming years are not very optimistic, if we look at the recent data, according to which EU Member States will be able to eradicate the VAT Gap in about 13 years.

Croatia (1%), Sweden (1.4%) and Cyprus (2.7%) have made the greatest progress in tackling the VAT Gap. In contrast, Romania (34.9%), Greece (25.8%) and Malta (23.5%) have experienced the greatest difficulties in collecting VAT.

Thus, we find that Romania once again fell behind in terms of VAT collection in 2019, when the state budget lost almost €7.4m, which represents approximately a third of the total value of VAT that the Romanian state should have collected and with 2.3% more than in 2018. It turns out that the measures adopted by the Romanian authorities in recent years, such as reducing the VAT rate for several types of services in the field of HORECA (during 2018) or introducing the split VAT payment system have not yielded the expected outcomes. Delaying the implementation of measures to digitalise the tax administration inevitably hampers the fight against VAT Gap.

Romania's National Recovery and Resilience Plan (PNRR), which was approved by the EU Council, and which contains a programme of tax reforms to be implemented by 2026, includes among its main objectives the decrease of the VAT Gap by 5% (until mid-2026). The authorities plan to increase the capacity of the National Agency for Fiscal Administration (NAFA) to collect revenues to the budget by improving the ability to analyse and process data/information, providing new digital services to taxpayers and the digital transformation of public finances. On the other hand, given the poor results recorded by Romania every year, as well as the inherent delays in the implementation of any new measure, it may be a good thing for the deadlines proposed for such initiatives to be shorter, and not in the form of a 5-year plan.”, mentioned Bianca Vlad, Tax Partner, Mazars Romania.

Read more info HERE.

 

Mazars global study reveals most businesses are overconfident about their level of data maturity

Mazars, the international audit, tax and advisory firm, with research partner DataGalaxy, announces the release of its first global study on data – The race to data maturity: Is your business as far ahead as you think? Over 1,100 business leaders from 21 countries, working in different size organisations in various industries and sectors participated in an online survey. The goal was to determine the self-assessed data maturity – or ‘fitness’ – of organisations and gauge how this self-assessment measured up to the actual programmes, processes and policies they have in place.

Being data-driven is no longer optional; it’s required

Our results show that businesses across the board are investing effort, money, and executive time on data: it’s the top priority, or among the top priorities, in the technology roadmap of 93% of companies surveyed; and top executives and board members address data management and governance issues quarterly, or even more frequently, in 80% of companies.

Becoming data-driven requires hard work and tough decisions that can make the difference between just keeping up and taking the lead.

Data has become one of the most important assets of a business. With the continuous development of the applications capable to collect, store and utilize large volume of data, there is an increasing need for the implementation of a better data governance as well as adequate measures for protection and secure access.”, mentioned Răzvan Butucaru, Partner, Financial Services & Advisory Leader, Mazars Romania.

Read more info HERE.

 

The EU Public Country-by-Country reporting (CbCR) has entered into force – Mazars’ analysis

Public Country-by-Country reporting (CbCR)  is officialised with the publication of Directive (EU) 2021/2101, amending Directive 2013/34/EU on reporting of income tax information by certain undertakings and branches.

In an effort to curb tax avoidance and enhance tax transparency, public CbCR reporting will require both EU and non-EU headquartered multinational groups with a consolidated annual turnover over €750m to publicly report income tax information.

The annual public CbCR report is due in 12 months from the balance sheet closing date. First public reporting is due for the financial year starting on or after 22 June 2024, at the latest. This means that in the majority of cases, for a financial year that is starting on 1 January, by way of example, the deadline for public CbCR reporting for the year 2025 will be 31 December 2026.”, mentioned Liviu Gheorghiu, Senior Tax Manager, Mazars Romania.

According to data published by the European Commission, the new measure will impact around 6,000 multinational companies active on the EU market, out of which approximately 2,000 are based in the EU.

Mazars has prepared a material regarding this topic. Read more info HERE.

 

Episode 4 of the Let’s talk luxury podcast, by Mazars

Luxury businesses have long promoted and sold pieces that are timeless, but that does not mean the way the sector operates should stay constant too.

In fact, the luxury sector is at a crossroads with brands looking for ways to meet new customer demands, tap into advanced technology and form cross-sector partnerships.

To better understand this business model makeover, Mazars launched Let’s talk luxury, a podcast series featuring global luxury experts. In the fourth episode of the Let’s talk luxury podcast, Dr Julie Laulusa, managing partner of Mazars in China, breaks down different customer tastes and trends in one of the world’s largest luxury markets.

You can listen to episode 4 HERE.

 

This article is provided by our Finance Partner, MAZARS Romania

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