10 February 2016
On 2 February 2016, Romania published Order No. 442/2016 in the Official Gazette concerning transfer pricing documentation preparation and submission requirements.
Under the order, large taxpayers should prepare transfer pricing documentation annually if annual aggregate transactions with related parties meet the following thresholds, excluding VAT:
For large taxpayers not meeting the above thresholds and SMEs, transfer pricing documentation should be prepared upon request by the tax authorities if annual aggregate transactions with related parties meet the following thresholds, excluding VAT:
To determine if the thresholds are met for non-EUR transactions, the exchange rate is the exchange rate of the National Bank of Romania on the last day of the fiscal year concerned.
The order includes amendments and additions to the documentation requirements based on the new OECD Transfer Pricing Guidelines developed under Action 13 of the OECD BEPS project, as well as the EU Code of Conduct for transfer pricing documentation. This includes the Master/Local file concept for group-level documentation and taxpayer-specific documentation.
For large taxpayers with transactions meeting the higher thresholds, the transfer pricing documentation should be prepared by the annual tax return deadline. If requested by the tax authorities, the documentation should be should be submitted within 10 days of request, but no sooner than 10 days after the deadline for preparation.
For large taxpayers and SMEs with transactions meeting the lower thresholds, transfer pricing documentation is to be prepared upon request by the tax authorities. The documentation submission deadline is set by the tax authorities, and may be within 30 to 60 days of the request, with the possibility for a 30-day extension.
If a taxpayer fails to submit documentation by the applicable deadline or the documentation is incomplete, the tax authorities will proceed to make an estimation of the appropriate transfer price and make any necessary adjustments.
Note - Documentation is not required for transactions covered by an advanced pricing agreement.
Order No. 442/2016 applies for related party transactions carried out from 1 January 2016.
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