According to the Tax Code, article 269 (Taxable persons and economic activity), a single group of taxable persons established in Romania is considered as a single tax group if they are legally independent but have close organizational, financial and economic relations with each other.
According to the methodological rules for the application of this article, the group of taxable persons established in Romania, legally independent and closely linked financially, economically and organizationally, may opt to be treated as a single tax group, with the following cumulative conditions:
a) a taxable person can only belong to one tax group;
b) the option must relate to a period of at least 2 years;
c) all taxable persons in the group must apply the same tax period.
Option b) refers to the group, not to each member of the group.
It is important to note that the tax group can consist of at least two taxable persons.
The competent tax authority for the administration of taxable persons belonging to a tax group is the central tax authority designated for this purpose, in accordance with the provisions of Article 30 paragraph (5) of Law no. 207/2015 on the Tax Procedure Code, hereinafter referred to as the Tax Procedure Code.
Taxable persons whose capital is held directly or indirectly in a proportion of more than 50% by the same partners shall be considered to be closely connected from a financial, economic and organizational point of view. The term associates also includes shareholders, according to the Companies Law no. 31/1990, republished, with subsequent amendments and additions. The fulfilment of this condition shall be proved by the certificate issued by the trade register and/or, where applicable, other supporting documents.
In order to implement the tax group, an application signed by the legal representatives of all the members of the group shall be submitted to the competent tax authority, including the following:
a) the name, address, object of activity and VAT registration code of each member;
b) proof that the members are closely connected in accordance with paragraph 5;)
c) the name of the member appointed as representative.
The competent tax authority must take an official decision approving or refusing the implementation of the tax group and communicate that decision to the representative of the group within 60 days from the date of receipt of the complete documentation, i.e. the application completed in accordance with paragraph 6, accompanied by the supporting documents.
The implementation of the tax group enters into force:
- on the first day of the month following the date of communication of the decision referred to in paragraph 7, if the members of the group have a calendar month tax period;
- on the first day of the tax period following the date of communication of the decision referred to in paragraph 7, if the members of the group do not have a calendar month tax period.
The group representative must notify the competent tax authority of any of the following events:
a) termination of the option provided for in paragraph 1 to form a single tax group, at least 30 days before the event occurs;
b) failure to comply with the conditions laid down in paragraphs (1) to (5), leading to the cancellation of the treatment of taxable persons as a tax group or of a person as a member of a tax group, within 15 days of the occurrence of the event giving rise to this situation;
c) the appointment of another representative of the tax group at least 30 days before the occurrence of the event;
d) the departure of one of the members of the tax group at least 30 days before the occurrence of the event;
e) entry of a new member into the tax group at least 30 days before the event occurs.
From the date of implementation of the single tax group:
- each member of the tax group other than the representative:
- reports in the tax return referred to in Article 323 of the Tax Code any supply of goods, provision of services, import or intra-Community acquisition of goods or any other transaction carried out by or to him during the tax period;
- sends his tax return to his representative;
- does not pay any tax due and does not claim any refund under his tax return;
- the representative:
- takes over, in the first consolidated return, the balances of the tax payable at the end of the previous tax period, not paid by the date of submission of this return, and the balances of the negative amount of tax for which no refund has been claimed from the VAT returns of the group members for the previous tax period;
- report in its own tax return, referred to in Article 323 of the Tax Code, any supply of goods, provision of services, import or intra-Community acquisition of goods or services, as well as any other transaction carried out by or to it during the tax period;
- reports in a consolidated statement the results of all VAT statements received from other members of the tax group, as well as the results of its own tax statement for the tax period;
- submits to the competent tax authority all tax returns of the members as well as the consolidated tax return form;
- pay or, where applicable, request reimbursement of the tax resulting from the consolidated tax return.
- Each member of the tax group has:
a) to submit the recapitulative statement provided for in Article 325 of the Tax Code to the competent tax authority
b) to submit to the control of the competent tax authority
c) to be liable separately and jointly and severally for any tax owed by him or by any member of the tax group for the period he belongs to that tax group;
d) to draw up the first VAT return after leaving the tax group only on the basis of transactions carried out in the period after leaving the group, without taking over the balance of the return for the previous tax period submitted for the purposes of drawing up the consolidated return
Supplies of goods and services made by each member of the group are subject to the normal taxation regime provided for in Title VII of the Tax Code, regardless of whether they are made to third parties or to other members of the tax group, each member of the group being considered a separate taxable person.
Legal basis:
– Tax Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), as amended and supplemented;
– Tax Procedure Code (approved by Law no. 207/2015, published in MO no. 547 of 23.07.2015), as amended and supplemented;
– Methodological Norms for the application of the Tax Code (approved by GOVERNMENT DECISION no. 1/2016).