Romania: Amendments to public country-by-country reporting rules
Amending the order that implemented EU Directive 2021/2101
Amending the order that implemented EU Directive 2021/2101
The Ministry of Public Finance issued Order 1730/2023 (published in the Official Journal of Romania no. 559/2023), amending Order No. 2048/2022, which implemented EU Directive 2021/2101 on public country-by-country (CbC) reporting. Read TaxNewsFlash
- Order 1730 clarifies that only Romanian entities with an ultimate parent company established in a non-EU Member State need to report under the EU directive. The requirement to report can be fulfilled by any group entity falling within the scope of the EU directive rules.
- Order 1730 provides that if the accounting standards based on which the financial statements are prepared do not include a definition of net turnover, the revenue calculated for purposes of the reporting is the revenue established according to International Financial Reporting Standards (IFRS) or in the financial reporting standard based on which the annual financial statements are prepared. For example, Romanian entities preparing financial statements according to a local accounting standard (such as Order 1802/2014) must calculate their turnover according to this accounting standard.
- Order 1730 reconfirms that the first report on income tax information must be submitted for 2023, and no later than 31 December 2024 (for entities whose financial year is equivalent to the calendar year), as long as the consolidated net turnover requirements for 2022 and 2023 are met. Order 1730 also confirms that if a reporting entity has a financial year different from that applied by its parent company, the report will be prepared based on the parent company’s financial year and not the reporting entity’s financial year.
- Order 1730 specifies that any reference to entities located in the EU includes entities established in countries which are part of the European Economic Area (Norway, Iceland and Lichtenstein).
- Order 1730 also specifies that for purposes of reporting under the directive, the reporting format to be used is that applicable according to EU Directive 2013/34 (non-public CbC reporting, implemented in Romania through GEO 42/2017, for which form R404 is used).
KPMG observation
The European Commission may draft forms for public CbC reporting that differ from that used for the reporting in Romania which could lead, at least in the first reporting period, to not-uniform reporting and subsequently to a lack of comparability between reports submitted by the same multinational group in different jurisdictions.
Read a June 2023 report prepared by the KPMG member firm in Romania
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