Corporate Income Tax Group: A Practical Guide (for 2027)
Tax consolidation allows affiliated companies to calculate a single taxable income at the group level. The profits of some group members are thus offset against the tax losses of other entities within that group.
The regime is governed by the Tax Code (Law No. 227/2015, Art. 42¹ et seq.), the Tax Procedure Code (Law No. 207/2015), and ANAF Presidential Order No. 1,191/2021.
Who Can Form a Tax Group
According to Article 42² of the Tax Code, a tax group must consist of at least two Romanian legal entities. Companies with their registered office in Romania that were established in accordance with European legislation may also participate. There must be direct or indirect ownership of at least 75% of the equity interests or voting rights among the members. This threshold must be maintained continuously for at least one year prior to the start of the consolidation.
Acceptable ownership structures are:
- a Romanian legal entity that owns at least 75% of one or more Romanian legal entities;
- at least two Romanian legal entities in which the same Romanian natural person holds at least a 75% stake;
- at least two Romanian legal entities in which a natural person or legal entity resident in a country with which Romania has a double taxation treaty or an agreement on the exchange of information holds at least a 75% stake;
- at least one Romanian legal entity in which a foreign legal entity from such a country holds at least a 75% stake, together with its permanent establishment (or designated permanent establishment) in Romania.
Eligibility Requirements for Each Member
In addition to the ownership threshold, each member must cumulatively meet the conditions set forth in Article 42³(2) of the Tax Code:
- is a corporate income tax payer and applies the same filing and payment system as the other members (quarterly or annually with advance payments);
- has the same fiscal year as the other members;
- is not part of another corporate tax group;
- is not a payer of microenterprise income tax;
- is not subject to any special tax regimes and is not in the process of dissolution or liquidation.
Application: Form 173
The option is exercised using Form 173, “Application for a Corporate Income Tax Group.” Once approved, the system is mandatory for 5 fiscal years.
Deadline: at least 60 days before the start of the consolidation period.
Filing: online, by the legal representative of the responsible legal entity. This is the company that calculates, reports, and pays the consolidated tax.
Signature: The application is a joint one and must be signed by the legal representatives of all members.
Attachments: Certificates of registration from the National Trade Register Office (ONRC) and/or other documents proving ownership of at least 75%.
Review of the Application by ANAF
The application is reviewed by the tax authority with jurisdiction over the responsible legal entity. The processing period is a maximum of 45 days (Art. 77, para. (1) of the Tax Procedure Code).
If the application is incomplete or contains errors, ANAF issues a notice requesting that it be completed within 15 days. During the period covered by the notice, the 45-day deadline is extended accordingly.
If the conditions are not met or the clarifications are not received on time, ANAF ensures the right to be heard (Article 9 of the Tax Procedure Code). The taxpayer is informed in writing of the reasons for a possible rejection and is given a date for a hearing. The hearing is deemed to have taken place even if the legal representative refuses to appear or fails to attend two consecutive hearings.
ANAF Decisions: Forms 174 and 175
Form 174: the decision to approve or reject the tax group. The rejection decision is substantiated in fact and in law and may be challenged within 45 days of notification.
Form 175: the decision regarding subsequent changes within the 5-year period: the entry or exit of members or the dissolution of the group.
What Changes After Approval
As of the effective date of consolidation, the obligation to file a corporate income tax return is suspended for all members, except for the responsible legal entity. Other taxes, levies, and contributions continue to be reported individually by each company.
The responsible legal entity files the annual consolidated corporate income tax return. This is accompanied by the members’ individual returns and the informational return regarding group-level sponsorships and philanthropic activities.
Changes in the group’s structure
- Admission of a new member. A company that meets the conditions may join the group starting in the next fiscal year. The responsible entity must file Form 173, with the “change” box checked, at least 60 days before the start of that year.
- Withdrawal of a member. A member that no longer meets the conditions leaves the group starting in the next quarter. The responsible person must notify ANAF using Form 173 within 15 days of the end of that quarter. As a general rule, the departing company must individually recalculate its corporate income tax for the entire period spent in the group and file amended returns. There are exceptions, such as dissolution or reorganization.
The dissolution of the group occurs:
- voluntarily, by means of a joint application (Form 173) filed at least 60 days before the relevant tax year, with a recalculation of the tax;
- by operation of law, if fewer than two members remain or the conditions are no longer met, effective as of the following quarter;
- upon the expiration of the 5-year period, unless the members request an extension.
Extension After 5 Years
To continue consolidation, the responsible legal entity must file Form 173 with the box “Request to Continue Applying the System” checked and indicate the new period. The request must be filed at least 60 days before the expiration of the current period. If the request is not submitted on time, the group is automatically dissolved.
Legal basis: the Tax Code (Law No. 227/2015), as amended and supplemented; the Tax Procedure Code (Law No. 207/2015); ANAF Presidential Order No. 1,191/2021 approving the Procedure for the Implementation and Administration of Tax Groups in the Area of Corporate Income Tax.