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Romania

3 February 2016

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Romania Publishes Order Approving new APA Procedures including Expanded Documentation Requirements

Romania published Order 3735/2015 in the Official Gazette on 29 December 2015, approving the procedures for the issuance and amendment of advance pricing agreements (APA).

Under the new procedures, the documentation requirements for the issuance or amendment of an APA have been expanded and largely harmonized with the additional documentation requirements recommended by Action 13 of the OECD BEPS Project. The required documentation includes:

  • Details of the taxpayer;
  • Details of the related parties;
  • A description of the organizational, legal, and operational structure of the group of companies to which the taxpayer belongs;
  • A description of the main functions performed, risks assumed, and assets used by the group;
  • A general description of the taxpayer's research and development activity, if any;
  • Presentation of any cost contribution agreements concluded by the taxpayer with related parties;
  • A description of transactions concerning any business restructuring that involve the taxpayer in the period preceding the application;
  • A list of any transactions to be undertaken with other related parties, including their values;
  • Functional and comparability analyses; and
  • Other relevant documentation.

In addition to the new documentation requirements, the new procedures also introduce the possibility for a taxpayer to argue its position in cases where an APA application is rejected. In such case, the taxpayer will have 60 days from the clarification request date or from the notification of the agreement project to argue its position. Furthermore, if a taxpayer disagrees with an APA that has been issued, it will have 30 days to notify the tax authorities, and the APA will have no legal effect.

If an APA is issued and accepted by the taxpayer, it will be binding an enforceable only if its terms and conditions are met, including the submission by the taxpayer of an annual report, the contents of which will be specified in the APA.

The provisions of Order 3735/2015 apply for APA application submitted on or after 1 January 2016. Applications made prior to that date remain subject to the provisions in force at the time the application was submitted.

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