The Fiscal Authority (FISC) of Romania receives information on the persons who have opened accounts at the banks and financial institutions in Romania and are doing transactions using them. However, this is not the only information that reaches the tax authorities. Soon, a European Directive will be implemented in Romania, which will require the reporting of transactions carried out in order for taxpayers to obtain a tax benefit.
What do these transactions entail? First of all, it should be mentioned that the directive does not oblige the reporting of transactions between two persons from the same country, but only of transactions carried out between a resident and a non-resident. The first criteria, therefore, is for the transaction to be a cross-border one, meaning the participants are not from the same country. Subsequently, the list of criteria in the directive will have to be analyzed and, based on them, it will be determined whether the transaction should be reported or not.
If the main purpose of the transaction is to obtain a fiscal advantage and not to carry out a real operation, then it must be reported to the FISC.
The reporting obligation is primarily of the intermediaries. Any third party who has information on the existence of such arrangements or transactions may qualify as an intermediary. Tax consultants, accountants, and banks are all included on the list. It must be known, however, that the obligation is not just for these intermediaries. The obligation is transferred to the entity level, if, for example, it works with intermediaries bound by professional secrecy (such as lawyers). In this case, it will be the obligation of the company to declare information about these transactions to the authorities.
It is very important to know that the Directive will be applied in Romania starting from 2020, with the first reporting period being August 2020. The report must include transactions starting from mid-2018, which means it will be a backdated reported period. We advise clients who have had transactions which fulfill the criteria to make sure they comply with the requirements and seek professional assistance with reporting.