Tax Flash nr. 88

In the Official Gazette no. 559 of June 21st, 2023 it was published the Order no. 1730/2023 for the regulation of some accounting aspects.

We remind you that through Order no. 2048/2022, the provisions of the Directive CbCR 2021/2101/UE (Country-by-Country Reporting) were transposed into the national legislation, which implemented the obligation to report certain information regarding the corporate income tax.

Through Order no. 1730/2023 certain clarifications and completions were made regarding the obligation to report certain information regarding the corporate income tax, respectively:

• It is clarified that the reporting obligation will be applicable only to large and medium-sized subsidiaries from Romania, which are controlled by a final parent company that does not fall under the legislation of an EU member state;
• Regarding the threshold of 3,700,000,000 lei, the phrase "consolidated turnover" was replaced by the phrase "consolidated revenues";
• Also, regarding the method of determining the consolidated revenues in case the financial reporting framework applicable to the preparation of the annual financial statements does not define the net turnover indicator, it is specified that the revenues defined by the International Financial Reporting Standards (IFRS) or the financial reporting standard based on which the annual financial statements are drawn up must be taken into account;
• In the case of a subsidiary for which there is a reporting obligation and which has a different financial year than that of the final parent company, the report will be submitted for the financial year of the final parent company;
• It is stipulated that in order to fulfill the reporting obligations provided by the Order, the reference to EU entities refers to entities registered in the European Economic Area;
• It is clarified that the reporting obligation covers only the current financial year, without requiring the presentation of information corresponding to the financial year preceding the reporting one;
• In the situation where the presentation of certain information was omitted, there is an obligation to resume their presentation within a maximum of five years from the date of the initial omission, and the published report will include information corresponding to the current financial year and previous financial years for which no information has been published.

The additional provisions introduced through Order no. 1730/2023 applies both to the Accounting Regulations regarding individual annual financial statements and consolidated annual financial statements approved by Order no. 1.802/2014, as well as to the Accounting Regulations in accordance with IFRS, approved by Order no. 2.844/2016.

When reporting the information, it shall be used the format established by the European Commission, adopted pursuant to art. 48c paragraph (4) of Directive 2013/34/EU.