Country-by-Country reporting

published on 7 October 2022 | reading time approx. 3 minute

Following the implementation of Action 13 of the Plan Against Base Erosion and Profit Shifting, hereinafter (“BEPS”) in the legislation of the European Union and Romania, Companies that are part of MNE groups with a consolidated annual turnover equal or greater than EUR 750 million are required to complete Country-by-Country reporting or “CbC” reports for the previous year and submit it to the tax authorities by the end of the year.

In this respect, please note that for the Romanian companies targeted by the above, the CbCr obligations may differ depending on the country of residence of the parent company and its reporting obligations. Depending on these criteria, the companies concerned must submit to the Romanian tax authorities a simple notification or a complete CbC report, detailing the group's activity in each country.

What CbCr obligations I have if I am part of a MNE Group with a consolidated annual turnover equal or greater than EUR 750 million?

The obligation to notify the Romanian authorities falls on companies that do not have the status of parent or surrogate entity and consists in informing the competent authorities in Romania about the identity and residence of the company that prepares and submits the CbCr report at the level of the MNE Group (i.e. parent entity, surrogate entity or a designated entity in the European Territory)
The obligation to prepare and submit the CbC report to the Romanian authorities occurs when, for certain reasons, the Romanian tax authority does not receive the country-by-country report from the state of residence of the reporting entity from the MNE Group. Such situations occur when the latter is not obliged to submit the report in its country of residence, when between Romania and the jurisdiction of the reporting entity is not in place a mutually information exchange agreement at the deadline of the submission of the CbC report in Romania, or in case if in the jurisdiction in which the reporting company has its fiscal residence a systemic failure occurred and was notified by the competent authority in Romania to the local company

Considering the above, a taxpayer from Romania, part of a MNE Group, which falls within the criteria mentioned above, has primarily the obligation to notify the Romanian tax authority through form R405 (i.e. CbC Notification) and, if the case, to prepare and submit the form R404 (i.e. CbC report).

If falls under the obligation to prepare and submit the CbC report, the document must be submitted to the tax authority within 12 months from the last day of the reporting year of the group. For example, on December 31, 2022, the country-by-country report for 2021 must be submitted. Also, please note that the submission is made exclusively online.

If a company does not submit the CbC report, it is liable to a fine of between 70.000 RON and 100.000 RON. If the report is submitted late, incomplete or incorrect, the fine is between 30.000 RON and 50.000 RON.

Roedl Tax Team is available to provide you with a wide range of services regarding CbC obligations, including the preparation and submission of the CbC Notifications or CbC reports.

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Andreea Stanica

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+40 21 98 05

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