Details
The National Agency of Tax Administration (ANAF) is preparing for audits to verify the existence of permanent and/or fixed establishments of non-resident taxpayers in Romania
According to recent statements by representatives of the institution, risk analyses are underway, after which ANAF will identify taxpayers who represent a high degree of risk in terms of having a permanent and/or fixed establishment in Romania and who have not registered for tax purposes.
This issue is being addressed both in Romania and internationally, as it is one of the most important topics on the agenda of the Organisation for Economic Co-operation and Development (OECD) and the tax authorities of other Member States. The latter have already established permanent establishments for Romanian taxpayers in these Member States and are cooperating through an information exchange mechanism to establish the tax situation and identify such permanent establishments that are not properly registered.
At the national level, ANAF is preparing a first audit campaign for non-resident taxpayers and, in a second phase, an audit campaign will be carried out in cooperation with other Member States for Romanian resident taxpayers with activities or income in other Member States. The analysis of the tax inspectors in the permanent establishment audit effort is extremely thorough and includes the assessment of all documents (contracts, financial and accounting documents, job descriptions and any other records) that indicate the actual and legal manner in which the business is carried out.
According to the legislation, a non-resident generates a permanent establishment when it "has the human and technical resources in Romania with which it can regularly carry out the supply of goods and/or services", while a permanent establishment is "the place where all or part of the non-resident's activities are carried out, either directly or through a dependent agent".
