EU Directive regarding the mandatory reporting by certain intermediaries or taxpayers of cross-border tax planning arrangements that present at least one of the hallmarks set out in the legislation was transposed into Romanian law on 31 January 2020.
The aforementioned hallmarks can be of two types: (i) those required to pass the main benefit test and (ii) those that are directly reportable. The main benefit test applies to situations in which the main benefit or one of the main benefits of a cross-border arrangement is to obtain a tax advantage.
The reporting obligation lies with intermediaries who (i) design, market, organise, make available for implementation or manage the implementation of a reportable cross-border arrangement, or (ii) provide assistance or advice in these areas. In the case of intermediaries with an obligation to maintain professional secrecy, the obligation arises when a written agreement is reached with the relevant taxpayer. In the absence of such an agreement, other reporting intermediaries (if any) or the taxpayer should be notified of the reporting obligation.
The corresponding reporting deadlines are as follows:
• 30 days from the moment when the reportable cross-border arrangement is made available or is ready for implementation, the first step in the implementation is taken, or aid, assistance or advice was provided (as the case may be) – in the case of cross-border arrangements carried out as of 1 July 2020
• by 31 August 2020 – in the case of cross-border arrangements subject to reporting for the period 25 June 2018-1 July 2020
The penalties for failing to comply with the legal provisions are as follows:
• RON 20,000-100,000 for non-reporting or late reporting of cross-border arrangements subject to reporting
• RON 5,000-30,000 for failure to fulfil the obligation to notify the intermediary or taxpayer, in the case of intermediaries with a legal obligation to maintain professional secrecy
As a next step, the tax authorities are expected to publish the form to be used in fulfilling the aforementioned reporting obligations, together with a guide to the implementation procedure.
Source: Government Ordinance no. 5/2020 amending and supplementing Law no. 207/2015 regarding the Fiscal Procedure Code, as published in the Official Gazette, Part I, no. 68, of 31 January 2020, which transposes Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU as regards the mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements.
