Ordinance no. 16/2023 for the amendment and completion of Law No. 207/2015 regarding the Tax Procedure Code (Official Gazette no. 86 of January 31, 2023)
Ordinance no. 16/2023 introduces a series of amendments and completions to the Law No. 207/2015 regarding the Fiscal Procedure Code (“Fiscal Procedure Code“), as follows:
- A 45-day deadline from the request of NAFA is established, within which reporting financial institutions that fall under the scope of Article 62, Article 291 paragraph (4) of the Fiscal Procedure Code and the FATCA Agreement are required to provide information and documents regarding the measures and evidence they relied on for applying due diligence and reporting procedures for reportable financial accounts.
- New provisions are introduced regarding the initiation of the mutual agreement procedure based on agreements or treaties for avoiding/eliminating double taxation and based on the 90/436/EEC Convention for the elimination of double taxation in relation to the adjustment of profits of associated enterprises, in case the taxpayer considers that the measures taken by one or both contracting states result in a taxation that is not in accordance with the provisions of the relevant treaty or agreement.
- Requests for initiation of the mutual agreement procedure submitted before the entry into force of Ordinance 16/2023 will be solved in accordance with the provisions in force at the date of submission of the request for the initiation of the mutual agreement procedure.
- Additional regulations are introduced regarding the procedure applicable to the exchange of information upon request within the system of administrative cooperation in the tax field, such as the clarification of the concept of “foreseeable relevance”, the reduction of the term for exchange of information upon request from 6 months to 3 months, the expansion of the scope of mandatory automatic exchange of information by including royalties in the category of reportable income, obligations regarding data protection, etc.
- The possibility for competent authorities from two or more Member States to carry out joint tax controls in a coordinated manner is being regulated.
- The provisions of the Council Directive (EU) 2021/514 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (the so-called DAC7), which concerns reporting by digital platforms (i.e. Platform Operators) of the activities carried out by merchants (i.e. Sellers) through these platforms, are transposed. In this respect, we note the following key aspects:
- „Platform” means any software, including a website or a part of a website and applications, including mobile applications, that are accessible to users and allow Sellers to be connected with other users for the purpose of carrying out a Relevant Activity, directly or indirectly, for these users, as well as any arrangement for collecting and paying a consideration for carrying out the Relevant Activity, with certain exceptions.
- A „Platform Operator” is an entity that makes available to Sellers, based on contracts, all or part of a platform. The platform operator has the obligation to report if it has tax residency in Romania or another member state or in a third country (but has certain connections with Romania) or, although not in any of these cases, facilitates the carrying out of a Relevant Activity by Reportable Sellers or a Relevant Activity involving the rental of an immovable property located in Romania or in another member state and is not a Qualified Platform Operator (as defined in Ordinance 16/2023) outside the Union.
- “Relevant Activity” means an activity carried out in exchange for consideration and consists of any of the following:
- a) rental of immovable property, including residential and commercial, as well as other immovable property and parking spaces;
- b) a Personal Service (as defined in Ordinance 16/2023);
- c) the sale of Goods (as defined in Ordinance 16/2023);
- d) rental of any means of transport.
- A „Reportable Seller” is a registered user (individual or entity) of a Platform, with certain exceptions, who carries out a Relevant Activity, who is resident in Romania or another member state or who has offered for rent an immovable property located in Romania.
- The obligation to determine whether a seller is a Reportable Seller lies strictly with the Platform Operators.
- A Platform Operator with reporting obligations may choose to register with the competent authority in a single member state, in case the reporting conditions are met both in Romania and in other member states.
- A Platform Operator with reporting obligations may entrust a third-party service provider with fulfilling the tax diligence procedure. However, these obligations remain the responsibility of the reporting Platform Operator.
- Exceptions from reporting obligations are provided based on e.g. seller’s quality, sales volume, etc.
- Reporting is done annually, by January 31st of the year following the calendar year in which the Seller is identified as a Reportable Seller.
- Penalties for non-compliance with the obligations provided by the Directive, as transposed into the Tax Procedure Code, range from 20,000 to 100,000 Romanian Lei.
- The administrative procedures and implementation of these provisions are approved by order of the President of the National Agency for Fiscal Administration (NAFA) within 90 days from the entry into force of Ordinance 16/2023.
Order no. 2509/2022 for the approval of the model and content of the form “Tax registration request” and the instructions for completing the form “Tax Registration Request” (Official Gazette no. 58 of January 20, 2023)
- The form is attached to the registration requests in the Trade Register provided in Annexes 2a and 2b to the Order of the Minister of Justice no. 5.307/C/2022 (i.e., the registration request for legal entities – Annex 2a, and for individuals – Annex 2b).
- The request for tax registration, hereinafter referred to as request, is completed and submitted by legal entities or authorized individuals, individual enterprises and family enterprises subject to the obligation of registration, as the case may be, in the Trade Register.
- The request is completed and submitted to the single office of the Trade Register Office next to the court, on the occasion of registration, as the case may be, in the Trade Register, before starting the economic activity.
- As a novelty, the form also allows the request for registration for VAT purposes, according to art. 316 para. (1) lit. a) from the Fiscal Code.
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For additional details regarding the above, you can contact any member of the Taxhouse team or you can send us an e-mail at office@taxhouse.ro.