Romania transposes the EU Public CbCR Directive into national legislation
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
Sponsored

Romania transposes the EU Public CbCR Directive into national legislation

Sponsored by

eygreece.png
financial-2860753.jpg

Adrian Rus and Gabriela Bancescu of EY Romania report on the front-running enactment of legislation implementing the EU directive and what it means for MNEs.

The EU Public Country-by-Country Reporting Directive entered into force on December 21 2021 and EU member states have to transpose the directive into national legislation by June 22 2023. The first financial year of reporting will be the year starting on or after June 22 2024 at the latest.

In September 2022, Romania became the first EU member state to publish legislation transposing the EU Public CbCR Directive and to choose to implement the reporting early, as the rules will enter into force on January 1 2023.

The first publication will take place within 12 months from the date of the balance sheet of the first financial year and will need to be made available for five years (first publication will take place no later than December 31 2024, for a financial year that ends on December 31 2023).

Requirements for MNEs

The Romanian legislation requires Romanian-based multinational enterprises (MNEs) and non-EU-based MNEs (doing business in Romania through a qualifying branch or medium-sized or large subsidiary) with total consolidated revenue of more than €747,474,740 in each of the previous two financial years to disclose publicly information including:

  • The nature of activities;

  • Income taxes paid;

  • A breakdown of profits;

  • Revenues; and

  • Employees per country.

The report should be made accessible on the public registry of the relevant member state and on the company website free of charge for a minimum of five consecutive years or on the website of the local chamber of commerce (if made available free of charge).

In general, the rules under the Romanian legislation adhere to the general rules in the EU Public CbCR Directive. However, the wording of the Romanian legislation provides for an expansion of the scope as compared with the directive, as MNE groups that have a medium-sized or large subsidiary in Romania are subject to public CbCR in Romania, irrespective of whether these are non-EU or EU-headquartered groups. It is nevertheless expected that this expanded scope will be revised through an update of the legislation, though the timing of such revision is unknown.

In addition, Romania chose to allow in-scope groups to defer the disclosure of commercially sensitive information for up to five years subject to certain conditions, though any omission, together with a duly reasoned explanation, will be clearly indicated in the report. Sensitive information should be understood as information that, if made publicly available, would be seriously prejudicial to the commercial position of the MNE to which the report relates. Nevertheless, information for tax jurisdictions listed on the EU list of non-cooperative jurisdictions may not be omitted.

Furthermore, Romania opted to exempt companies from the requirement to publish the CbC reports on their website, provided that they are made available free of charge on the website of the relevant chamber of commerce.

The information in the report needs to be disclosed separately for all EU member states and all jurisdictions included in Annex I and Annex II of the Council conclusions on the EU list of non-cooperative jurisdictions for tax purposes. For all other jurisdictions, aggregated data is to be disclosed.

Early impact assessment

In the absence at this stage of detailed norms for the application of the Romanian public CbCR legislation, several questions are raised and potential difficulties may be encountered by those impacted by the legislation.

Nevertheless, the acceleration of the public CbCR obligations through the enacted legislative changes in Romania requires that MNEs with significant operations in Romania address and assess early the impact of the Romanian legislation on their business and on their broader public tax reporting strategy.

more across site & bottom lb ros

More from across our site

The reported warning follows EY accumulating extra debt to deal with the costs of its failed Project Everest
Law firms that pay close attention to their client relationships are more likely to win repeat work, according to a survey of nearly 29,000 in-house counsel
Paul Griggs, the firm’s inbound US senior partner, will reverse a move by the incumbent leader; in other news, RSM has announced its new CEO
The EMEA research period is open until May 31
Luis Coronado suggests companies should embrace technology to assist with TP data reporting, as the ‘big four’ firm unveils a TP survey of over 1,000 professionals
The proposed matrix will help revenue officers track intra-company transactions from multinationals
The full list of finalists has been revealed and the winners will be presented on June 20 at the Metropolitan Club in New York
The ‘big four’ firm has threatened to legally pursue those behind the letter, which has been circulating on social media
The guidelines have been established in the wake of multiple tax scandals and controversies that have rocked the accounting profession
KPMG Netherlands’ former head of assurance also received a permanent bar and $150,000 fine; in other news, asset management firm BlackRock lost a $13.5bn UK tax appeal
Gift this article