Law 227/8 September 2015 Fiscal Code Article 11 (2):
Order no. 222/2008, regarding the content of the transfer pricing documentation file:
Ministry of Public Finances;
National Agency for Fiscal Administration (ANAF)
Overview of Legal Requirements
Romania is not a member of the OECD, but has implemented legislation covering transfer-pricing that has adopted the OECD guidelines and Arm’s Length Principle. Transactions between related parties shall be carried out at market prices. Related parties are defines as:
- An individual (or legal entity) is a related party with a legal entity provided that they hold, directly or indirectly, including the shareholding of related entities, a minimum of 25% of the number/value of shares or voting rights in the legal entity, or it effectively controls the legal entity (unfortunately the legislation is silent on the meaning of ‘effective control’).
- Two individuals are related parties provided that they are spouses or relatives up to the third degree. (PWC 2015, p. 869)
Description of risk
From non-government sources, it seems that the amount of tax for the first half of 2015 are approximately 130% higher than the additional tax obligations set in 2012, which demonstrates the viability of reorganisation and the effective business performance of NAFA, including transfer pricing issues, that have occurred in the year 2013. Thus, the risk is considered low.
This indicator has been evaluated as low risk. Identified laws are upheld. Cases where law/regulations are violated are efficiently followed up by the authorities and/or by the relevant entities taking preventive actions.
- Products shall not be traded through countries known as “tax havens” when it is illegal in the country of the supplier or sub-supplier to do so.
- There shall be no illegal manipulation of or in connection with transfer pricing.