Establishment of VAT tax group – general aspects

From a fiscal point of view, the notion of group can be met both in terms of VAT and in terms of profit tax (starting with 2022).

Tax group – VAT:

Under the conditions of article 269 paragraph (9) and the application norms, two or more taxable persons established in Romania who, being legally independent, are in close relations with each other from an organizational, financial and economic point of view, may choose to be treated as a single tax group.

Even if a single tax group is constituted, the supplies of goods and services made by each member of the group are subject to the normal taxation regime provided by Title VII of the Tax Code, regardless of whether they are made to third parties or other members of the tax group. member of the group being considered a separate taxable person.

It is considered in close connection from the financial, economic and organizational point of view the taxable persons whose capital is held directly or indirectly in proportion of more than 50% by the same associates.

The term associates also includes shareholders, according to the Companies Law no. 31/1990, republished, with the subsequent modifications and completions. The fulfillment of this condition is proved by the ascertaining certificate issued by the Trade Register and / or, as the case may be, other justifying documents.

The tax group may consist of at least two taxable persons. In order to set up a single tax group, the following conditions must be met cumulatively:

  1. a taxable person may be part of only one tax group;
  2. the option must cover a period of at least 2 years; The option refers to the group, not to each member of the group.
  3. all taxable persons in the group must apply the same tax period.

In order to implement the fiscal group, an application signed by the legal representatives of all the members of the group is submitted to the competent fiscal body (the central body designated for this purpose), which should include the following:

  1. the name, address, object of activity and registration code for VAT purposes of each member;
  2. proof that the members are in close contact;
  3. the name of the member appointed representative.

According to the methodological norms for the application of the Fiscal Code, the competent fiscal body must take an official decision approving or refusing the implementation of the fiscal group and communicate that decision to the group representative, within 60 days from receiving the complete documentation, respectively of the completed application, accompanied by supporting documents.

The implementation of the fiscal group enters into force:

  1. a) on the first day of the month following the date of communication of the previously provided decision, in case the members of the group have the fiscal period of the calendar month;
  2. b) on the first day of the fiscal period following the date of communication of the previously provided decision, in case the members of the group do not have the fiscal month calendar month.

The group representative must notify the competent tax authority of any of the following events:

  1. termination of the option to form a single tax group, at least 30 days before the event occurs;
  2. non-fulfillment of the previously provided conditions, which lead to the cancellation of the treatment of taxable persons as a tax group or of a person as a member of the tax group, within 15 days from the occurrence of the event that generated this situation;
  3. the appointment of another representative of the fiscal group at least 30 days before the event;
  4. leaving the fiscal group by one of the members, at least 30 days before the event;
  5. entry of a new member in the fiscal group, at least 30 days before the event.

From the date of implementation of the single fiscal group:

  1. a) each member of the tax group, other than the representative:
  2. reports in the VAT return any delivery of goods, provision of services, import or intra-community acquisition of goods or any other operation carried out by or towards him during the fiscal period;
  3. sends its tax return to the representative;
  4. does not pay any tax due and does not request any refund according to his tax return;

  1. a) the representative:
  2. takes over, in the first consolidated statement, the balances of the payment tax from the end of the previous fiscal period, unpaid until the date of submitting this statement, as well as the balances of the negative amount of the tax for which no refund was requested from the VAT returns of the group members previous taxes;
  3. reports in its own VAT return any delivery of goods, provision of services, import or intra-community acquisition of goods or services, as well as any other operation performed by or towards it during the fiscal period;
  4. reports in a consolidated statement the results of all VAT returns received from other members of the tax group, as well as the results of its own tax return for the respective tax period; 4. submits to the competent fiscal body all the tax returns of the members, as well as the consolidated tax return form;
  5. pays or, as the case may be, requests the reimbursement of the tax resulting from the consolidated tax return.

Each member of the tax group must:

– to submit the declaration 390 to the competent fiscal body;

– to submit to the control of the competent fiscal body;

– to be responsible separately and jointly and severally for any tax due by him or by any member of the fiscal group for the period that belongs to the respective fiscal group;

– to prepare the first VAT return, after leaving the fiscal group, only on the basis of the operations performed in the period after leaving the group, without taking over the balance from the statement related to the previous fiscal period, submitted in order to prepare the consolidated statement.

Deliveries of goods and services made by each member of the group are subject to the normal tax regime provided by Title VII of the Tax Code, regardless of whether they are made to third parties or other members of the tax group, each member of the group being considered a taxable person separate.

Legal basis:

 – Fiscal Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), with subsequent amendments and completions;

– Fiscal Procedure Code (approved by Law no. 207/2015, published in the Official Gazette no. 547 of 23.07.2015), with subsequent amendments and completions;

– Methodological Norms for the application of the Fiscal Code (approved by Government Decision no. 1/2016).