מחירי העברה: רומניה- אוקטובר 2009

Overview of the Romanian transfer pricing regulations

Romanian tax inspectors have traditionally carefully checked crossborder transactions, and they have

been aware of the arm’s length principle even before the effective implementation of the transfer pricing provisions. Since accession to the European Union, transfer pricing has become a ‘hot topic’ in Romania, and there is more and more concern with respect to the potential corporate tax adjustments for local entities.

The Romanian Tax Code and implementing regulation include specific transfer pricing provisions inspired by the OECD Guidelines on Transfer Pricing. Furthermore, there is a direct reference to the OECD Guidelines for the application and interpretation of transfer pricing concepts and regulations. It should be noted that transfer pricing and the taxation of permanent establishments are the only tax areas where 
OECD Guidelines and commentaries are fully applicable in Romania.

Other OECD documents are not binding on Romanian tax inspectors.
At present, the main requirement for local subsidiaries of foreign companies is the preparation of the transfer pricing file. The content of the transfer pricing file has been set according to the Annex of the Code of Conduct on transfer pricing documentation for associated enterprises in the European Union (EU TPD - 2006/C 176/01). However, Romanian legislation is silent on issues such as the optional character of such documentation for multinational enterprises or the requirement to simplify the documentation for small and medium-sized companies or for non-complex businesses.

Considering the period of limitation in Romania is five years, it is reasonable to assume that cross-border transactions currently being performed should be supported by adequate documentation and transfer pricing methodology. Although transfer pricing provisions have been enforced from 2002, the review of transfer pricing is still inconsistent. In the last year (2008), tax inspectors have required the preparation/presentation of the transfer pricing documentation but without performing an in-depth and comprehensive review of the information it contains. The main consequence is delay in completing tax audits, which might be very inconvenient in the case of VAT refund applications, for example.

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