Several EU Member States have only very recently published final XML reporting schemas, resulting in the delayed adoption of electronic filing of XML reports. Romania is one of those countries, as it issued a guide some weeks ago on mandatory disclosure rules (‘MDR’) and how to report a cross-border arrangement (‘CBA’) to the Romanian tax administration. As we receive an increasing number of questions, we set out the Romanian state of play below.
On January 31, 2020, regulations to transpose mandatory disclosure rules based on Directive (EU) 2018/822 (also known as ‘DAC6’) into domestic law were published in the Romanian Official Gazette. The Romanian mandatory disclosure regime is very similar to the scope of DAC6, with definitions in the domestic legislation closely aligned with those included in the EU Directive.
- Tax authority: National Agency for Fiscal Administration (‘NAFA’)
- Reporting deadline ‘ historical period’ (June 25, 2018 – June 30, 2020): February 28, 2021
- Penalties: up to approx. EUR 20,000 per failure
- Reporting format: template form provided by the NAFA on their website
- Reporting language: Official language (Romanian language mainly)
- Country specifics: to our understanding, there are no deviations from EU, most notably:
- Taxes covered: Direct taxes
- Taxes excluded: VAT
- Domestic transactions: No
- Additional hallmarks: No
Intermediaries only have a reporting obligation in Romania based on local residency, permanent establishment, incorporation, or professional registration. Romania-based intermediaries are obliged to report information that is within their knowledge (or which they are reasonably expected to know), possession, or control on reportable CBAs. An intermediary is only exempt from reporting in Romania if it provides the NAFA proof that a filing was submitted elsewhere in another EU Member State, or if a legal professional privilege (‘LPP’) is applicable and the relevant taxpayer/other intermediaries were notified.
Legal Professional Privilege
It should be noted that some types of intermediaries who are obliged to maintain professional secrecy – most notably lawyers and tax advisors – can report a CBA that they are aware of only after the obtaining of written consent from the relevant taxpayer.
Therefore, relevant taxpayers can easily face a reporting obligation by default, despite always having an intermediary involved when undertaking arrangements. So, the reporting obligation of relevant taxpayers should not be underestimated due to how the LPP works out in Romania.
How to file in Romania
Please be informed that we are currently finalizing the implementation of the local XML reporting schemas in DAC6pro in close consultation with the Romanian tax authorities. Click here for an actual implementation overview.
Please find the official guidance as recently published by the Romanian NAFA here.