• Tax Flash nr. 78

Tax Flash nr. 78

13 September 2022

In the Official Gazette no. 878 of September 7th, 2022 was published Order no. 2048/2022 on the completion of the accounting regulations applicable to economic operators, through which the provisions of EU Directive 2021/2101 are transposed into national legislation, within the accounting regulations approved by Order 1802/2014 and Order 2844/2016.

By this, the obligation to prepare, publish and ensure access to a report on corporate income tax information, by certain entities and branches, is introduced.

The obligation concerns multinational groups of companies as well as independent entities, whose consolidated / individual net turnover in the case of the independent entity exceeded, at the balance sheet date, for each of the last two consecutive financial years, the amount of 3,700,000,000 lei (the equivalent of 747,474,740 euros at the exchange rate published in the Official Journal of the European Union on December 21st, 2021), the report being drawn up for the most recent of the respective two consecutive financial years.

The obligation does not apply to independent entities or final parent companies and its affiliated entities if these entities, including their branches, are established, have their fixed commercial headquarter or a permanent economic activity on the territory of only one EU member state and in no other tax jurisdiction.

The report will be submitted by:

  • the final parent company;
  • the independent entity, defined as an entity that is not part of a group;
  • medium and large subsidiaries, which are controlled by a final parent company which is not subject to local accounting regulations;
  • Romanian branches established by entities that are not subject to the legislation of an EU member state.

The report will include information on all the activities of the independent entity or of the final parent company, including the activities of all affiliated entities, consolidated in the financial statements for the financial exercise in question, respectively:

  • the name of the final parent company or independent entity, the financial year in question, the currency used for the presentation of the report and, where applicable, a list of all subsidiaries consolidated in the financial statements of the final parent company, for the relevant financial year, established in the EU or in the tax jurisdictions included in Annexes I and II to the Council Conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes;
  • a brief description of the nature of their activities;
  • the number of employees in full-time equivalent;
  • income, which represents the sum of net turnover, other operating income, income from participation interests, with the exception of dividends received from affiliated entities, income from other investments and loans that are part of fixed assets, other interests receivables and other similar income;
  • the amount of gross profit or loss(es);
  • the amount of corporate income tax accumulated during the financial year;
  • the amount of corporate income tax paid in cash;
  • the amount of accumulated earnings at the end of the financial year in question.

The information will be presented separately for each EU Member State and non-cooperative jurisdictions and cumulated for other jurisdictions.

The report shall be published within 12 months from the balance sheet date of the financial year for which the report is drawn up and will remain accessible on the entity's website for a period of at least 5 consecutive years.

The obligation to draw up a report with corporate income tax information no longer applies when the turnover indicator is no longer exceeded during two consecutive financial years.

The provisions enter into force with January 1st, 2023, and in the case of entities which have chosen a financial year different from the calendar year, the provisions apply starting with the first financial year that begins after January 1st, 2023.