Deloitte Romania Survey: 95% of the multinationals’ representatives believe they will be more exposed to fiscal controls in the future

Deloitte Romania has undertaken an online survey regarding the impact  of the measures of Plan BEPS - Base Erosion and Profit Shifting in August-September 2017.

The survey aimed at learning the opinion of the local business environment on the impact of BEPS one month later after Deloitte has published the results of a global study on this topic: BEPS Initiative of OECD and the Global Tax Reset. Romania was not included in the global survey as it was not an associate member of BEPS at the time. Romania became a BEPS associate member in June 2017.

“The increased interest of the tax authorities for the fiscal structures implemented by multinational groups, the higher focus on the fiscal controls and the high volume of reporting demands in the transfer pricing area are the main expectations of the business environment in Romania. The conclusions are similar to global findings,” said Dan Badin, Tax and Legal Partner in Charge at Deloitte Romania.

Key findings of the survey undertaken in Romania:

• 95% of the multinationals’ representatives consider they will be more exposed to fiscal controls in the future
• 68% anticipate that the risk that the National Fiscal Authority (ANAF) will make prices adjustments of the intra-group transactions during fiscal controls will increase due to the implementation of the European Directive regarding country by country reporting  (adopted by Romania through OUG 42/2017)
• 58% learned both about Plan BEPS as well as about the measures adopted by Romania or that will be adopted by Romania as a BEPS associate member
• 42% made an analysis of BEPS’ impact over the company’ activities
• out of those who took the survey:

1. 50% consider they will have additional reporting obligations
2. 17% expect an increased corporate income tax
3. 13% anticipate a double taxation of certain incomes

• According to the respondents, the most affected intra group transactions by BEPS will be: the provision of services (38%), the provision of know-how and other intellectual property rights (18%) and funding (13%).

“An increased fiscal transparency will have an impact on all companies. Tax authorities will have more and more access to the financial and fiscal data of all entities of a group. This includes the information that parent companies report in their jurisdiction about their affiliates / permanent establishments in Romania. The information will be used in risk analysis in order to conduct tax audits. That is why I believe that the groups of companies present in Romania should analyze all the business structure to ensure that they comply with the constant change of tax rules both locally and internationally," concluded Dan Badin.