MFP Order no. 762 of 2021 for the regulation of some accounting aspects, published in the Official Gazette no. 697 of July 14, 2021, is addressed to those rapporteurs who have an organizational structure that involves a connection with our country, but at the same time an existing organizational structure abroad.
According to the normative act, the accounting regulations approved by OMFP 1802/2014 also apply for:
- permanent headquarters in Romania belonging to legal entities with headquarters abroad;
- foreign legal entities that have the place of exercising effective management in Romania.
The permanent headquarters in Romania that belong to some legal entities with headquarters abroad have the obligation to prepare the annual financial statements and the accounting reports required by the accounting law.
In the situation when the legal person with headquarters abroad carries out its activity in Romania through several permanent offices, the annual financial statements and the accounting reports required by the Accounting Law no. 82/1991, are prepared by the permanent office designated to fulfill the fiscal obligations, reflecting the activity of all permanent establishments.
For this purpose, the designated permanent establishment proceeds to sum up the information corresponding to the activity carried out by each permanent establishment.
It regulates a new section with accounting principles and regulations for foreign legal entities that have the place of effective management in Romania (“Accounting of operations carried out by foreign legal entities that have the place of effective management in Romania”), among which we mention:
The information reported by foreign legal entities that have the place of exercising effective management in Romania corresponds to the entire activity carried out by them, both in Romania and abroad.
We specify that in the first financial year of application of the present regulations, the foreign legal entities that have the place of exercising the effective management in Romania report information related only to the current period.
In the case of entities that have chosen, according to the law, a financial year different from the calendar year, the annual financial statements corresponding to the first reporting financial year are prepared at the end of the first financial year so chosen, which begins after January 1, 2021.
In the first financial year of application of these regulations, foreign legal entities that have the place of effective management in Romania report the information determined according to the accounting regulations applicable in the state where they were established and valued using the exchange rate communicated by the National Bank of Romania (BNR).
For the conversion of the balances of the balance sheet elements, existing at the end of the financial year, the exchange rate communicated by the National Bank of Romania (NBR) is used, valid at the end of the financial year of the current period.
For the conversion of turnovers corresponding to the operations carried out in the financial reporting year, the exchange rate from the date of transactions is used. When this provision cannot be applied, the average course of the reporting period is used.
The difference between the result determined according to the average exchange rate or the exchange rate from the date of transactions and the result at the closing exchange rate is recorded on account of the carried forward result, analytically distinct.
Foreign legal entities that have had the place of exercising effective management in Romania and, after a period of interruption of this status of more than 12 consecutive months, have again the place of exercising the effective management in Romania, it is considered that they are in the first financial exercise of application of the present regulations.
According to the new provisions, from the second financial reporting year, the operations performed are accounted for according to the present regulations.
The annual financial statements provided by the new section are financial statements with a special purpose, being intended to fulfill the obligations provided by the Fiscal Code. The annual financial statements are accompanied by significant accounting policies.
For the foreign legal entities that have the place of exercising effective management in Romania, the provisions regarding the audit obligation and those regarding the preparation of the consolidated annual financial statements, included in the present regulations, do not apply.
Considering the information provided above, all these financial statements have the main role of identifying the elements with fiscal incidence considering that the foreign companies that have the effective management in Romania, respectively the permanent headquarters in Romania belonging to foreign legal entities are payers of profit tax in Romania.
Legal basis:
– Order MF 762/2021 for the regulation of some accounting aspects;
– Accounting Regulations 2014 regarding the individual annual financial statements and the consolidated annual financial statements.