Tue | 31.05.2022
The electronic invoicing – one month until implementation – Mazars’ analysis
When the business environment is facing the challenges of the SAF-T reporting, for which the first deadlines are fast approaching (until 31 July 2022, a number of 3,280 companies will have the obligation to file the 406 statement), two other projects undertaken by the tax authorities in the reforms included in the National Plan for Recovery and Resilience become a priority for all companies, earlier than anticipated.
Besides the SAF-T reporting, all categories of taxpayers (large, medium and small) have to comply with two new reporting requirements starting 1 July 2022 – RO e-Invoice and RO e-Transport. These are two projects in the area dedicated to the digitalisation of the tax administration, through which the authorities aim to improve the level of VAT collection and prevent and combat tax evasion in sectors prone to fiscal risk.
Mazars’ tax team has prepared a material regarding the new tax compliance requirements.
„In the case of SAF-T, we appreciate a visibility showed by the tax authorities, which have published a Guideline to help companies in the preparation of the new statement, as well as a list of specific questions and answers. They have also introduced a grace period of 6 months for the first reporting deadline, given the complexity of this new requirement. On the other hand, in relation to the other two new regulations, RO e-Invoice and RO e-Transport, which should be implemented on a mandatory basis in about one month (starting with 1 July 2022), the tax authorities are late in providing clarifications and answers to questions that may arise in practice. Hence, for the moment, there is a long list of questions, but few answers.", mentioned Bianca Vlad, Tax Partner, Mazars Romania.
Read more info HERE.
Transfer pricing risk analysis for Romanian companies, by Mazars
In recent years, the number of tax audits focused on direct taxes and transfer pricing has become significant and 2022 brings a surge in this regard.
Mazars’ tax team has prepared a material regarding the transfer pricing risk analysis for Romanian companies, where you can find information regarding the taxpayers required to prepare the transfer pricing file during the current period, as well as:
How to prepare the comparability studies
The Romanian transfer pricing legislation stipulates that comparability studies must be prepared in the first instance on the Romanian market. If local comparable companies cannot be identified, the geographical criterion should be extended in the following order: European Union, pan-European, international.
In general, the comparability study should be updated yearly to reassess the impact of prevailing market conditions on the tested transaction.
What happens if a company does not prepare and present the transfer pricing file in case of a tax audit?
Companies may be subject to a fine between RON 12,000 – RON 14,000 for large and medium taxpayers, or between RON 2,000 – RON 3,500 for small taxpayers. More importantly, in the event of a transfer pricing audit, the tax authorities will prepare their own assessment based on a simplified procedure which might result in transfer pricing adjustments, together with additional corporate income tax and late payment penalties.
Read more info HERE.
The fixed establishments' controversy: will CJEU change the approach of the Romanian tax authorities? – Mazars’ analysis
The fixed establishment generated by a non-resident company has important implications from a VAT perspective, as it changes the rules of the game regarding the place where VAT is paid, respectively the person liable to pay the tax.
Having in mind both the ambiguous legislation combined with the jurisprudence of the Court of Justice of the European Union (CJEU) which has not clearly defined the criteria for establishing a fixed establishment in the cases decided so far, the issue of fixed establishments is creating controversy in tax inspections, leading to uncertainty and additional VAT obligations for companies.
Mazars’ tax team has prepared a material regarding the subject.
„In the last two years, two other landmark decisions on this concept have been published, in cases C-547/18 Dong Yang Electronics, respectively C-931/19 Titanium Ltd. In the Polish case Don Yang Electronics, the Court deemed that having a branch on the European Union territory does not automatically give rise to a fixed establishment for the non-resident parent company, while the supplier cannot be required to analyse the contractual relationships between his business partner and its branches in order to determine whether the latter can be considered fixed establishments from a VAT point of view. Subsequently, in the Austrian case Titanium Ltd., CJEU held that a non-resident does not generate a fixed establishment if he owns a building which he rents out without having his own staff to carry out the rental service. In CJEU’s view, the use of the staff of a subcontracted company is not sufficient to establish the existence of a fixed establishment and should be taken into account, in particular, the decision-making staff with respect to the rental of real estate.”, mentioned Bianca Vlad, Tax Partner, Mazars Romania.
Read more info HERE.
Latest tax alerts, by Mazars
Mazars’ professionals are constantly preparing materials to help you stay up to date with the latest legislative measures. Latest news:
News regarding waste management & waste transfer
The Emergency Ordinance for the amending and completion of some normative acts to make the waste management more efficient was published in the Official Gazette no. 344.
RO e-Transport System High risk goods category
The Order of the President of the National Tax Administration Agency regarding the high tax risk goods transported by road that are subject to RO e-Transport System was published in the Official Gazette no. 430.
Refund of the tax on dividends
Order no. 765 on the Procedure for refunding the tax on dividends resulting from the annual regularization of dividends partially distributed during the year was published in the Official Gazette no. 402/ 27.04.2022.
News on RO e-Invoice system and tax measure
Law no. 139 regarding the approval of Government Emergency Ordinance no. 120/2021 on the administration, functioning and implementation of the national system for electronic invoicing RO e-Invoice and electronic invoicing in Romania was published in the Official Gazette no. 490/ 17.05.2022.
Read more info HERE.
This article is provided by our Finance Partner, MAZARS Romania