In the Official Gazette (Part I) no.86 of 31 January 2023 was published Government Ordinance (OG) no.16/2023 amending and supplementing Law no.207/2015 on the Tax Procedure Code, with applicability from 3 February 2023.
The Executive has adopted an Ordinance amending and supplementing Law no.207/2015 on the Tax Procedure Code, a normative act which aims at transposing Directive (EU) 2021/514, the possibility for ANAF to carry out controls and verifications of the reporting and tax due diligence procedures provided for in the Annex to the FATCA Agreement and the implementation of the minimum standard on Article 16 “Mutual Agreement Procedure” of the Multilateral Convention on the implementation of measures to prevent the erosion of the tax base and the transfer of profits.
Therefore, according to a Government press release, in view of the transposition of Directive (EU) 2021/514, OG 16/2023 envisages the introduction of the following aspects:
- the “foreseeable relevance” standard for tax information exchange. In this respect, when the tax authority of one Member State addresses a request for information to a tax authority of another Member State, it must specify, on the one hand, the tax purpose for which the information is requested and, on the other hand, what information it needs in order to apply the tax provisions;
- the obligation to collect a set of information on the reportable sellers operating on the platform and to report it to the tax authority – on platform operators from both Member States and third countries;
- the obligation to register third country platform operators who have on the platform reportable sellers from EU Member States;
- penalties for platform operators who do not comply with tax due diligence and reporting procedures. In the case of third country platform operators, sanctions can go as far as the revocation of registration and the suspension of access to the platform;
- the possibility for several Member States’ tax authorities to carry out joint controls upon request;
- widening the scope of the automatic exchange of information by including royalties in the specific categories of income and capital that may be subject to this mechanism.
In order to verify compliance by reporting financial institutions with the reporting and due diligence procedures, as well as the compliance procedures set out in the Annex to the FATCA Agreement, the possibility for ANAF to carry out controls and verifications in this regard is regulated.
In order to implement the minimum standard with regard to Article 16 “Mutual Agreement Procedure” of the Multilateral Convention on the implementation of measures to prevent the erosion of the tax base and the transfer of profits in tax treaties, a provision is introduced according to which a taxpayer, on the basis of a convention or an agreement for the avoidance of double taxation, may make a request for the initiation of a mutual agreement procedure to the competent authorities of any of the signatory states of a convention or an agreement.
Amicable procedure (as amended by OG 16/2023):
Based on the provisions of the double taxation convention or agreement concluded by Romania with another state, when a taxpayer considers that the measures taken by one or both contracting states result in a taxation of the taxpayer which is not in accordance with the provisions of that convention or agreement, that taxpayer may present his case to the competent authority of either contracting state, if the convention or agreement provides for this possibility.
If the provisions of the convention or double taxation avoidance agreement concluded by Romania with another state do not provide for the possibility of addressing the competent authority of either of the contracting states, the taxpayer resident in Romania may request the A.N.A.F. to initiate the mutual agreement procedure when he considers that the measures taken by one or both contracting states result in his taxation not in accordance with the provisions of the convention or agreement in question.
If the provisions of the convention or agreement on the avoidance of double taxation concluded by Romania with another state do not provide for the possibility of addressing the competent authority of either contracting state and the A.N.A.F. considers that the taxpayer’s objection cannot be admitted or is unjustified, the A. N.A.F. notifies the competent authority of the State with which Romania has concluded a convention or agreement on the avoidance of double taxation of this fact or implements a bilateral consultation process allowing the competent authority of the other State to present its views on the subject of the mutual agreement procedure.
The provisions of this Article shall be supplemented by the provisions of the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (90/436/EEC), the revised Code of Conduct for the effective implementation of the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (2009/C322/01), as well as double taxation conventions or agreements concluded by Romania with other States.
In Romania, the competent authority for the mutual agreement procedure is A.N.A.F.
A.N.A.F. also carries out the mutual agreement procedure if the competent authority of the state with which Romania has concluded a convention or an agreement for the avoidance of double taxation requests it to do so.
The procedure for carrying out the mutual agreement procedure shall be approved by order of the President of A.N.A.F..
Legal basis:
-OG 16/2023 for amending and supplementing Law no.207/2015 on the Tax Procedure Code;
-Tax Procedure Code (approved by Law no.207/2015, published in the Official Gazette no.547 of 23.07.2015), as amended and supplemented.