Transfer Pricing
Country Summary
Romania
This document summarizes the transfer pricing requirements and regulations in Romania. Romania has formal transfer pricing documentation requirements for multinational groups, including master files, local files, and country-by-country reporting. These regulations are based on OECD guidelines and apply to both cross-border and domestic transactions between related parties.
Overview:
Romania’s Transfer Pricing Regulations
Romania enforces transfer pricing regulations based on OECD guidelines and EU principles, applicable to both domestic and cross-border transactions between related parties. These regulations require companies to maintain detailed transfer pricing documentation, and they encompass several key aspects.
Definition of Related Parties
Related parties in Romania are defined based on share ownership and control, extending to spouses and relatives. Economic control also qualifies companies as related parties, although a specific definition of this control is absent in the legislation.
Transfer Pricing Documentation
Transfer pricing documentation in Romania follows OECD Guidelines, with local and group-level information requirements. It includes details about the organizational structure, business strategies, intercompany transactions, intellectual property, research and development, and financial arrangements.
Choice of Transfer Pricing Method
Romania’s transfer pricing methods align with OECD Guidelines, encompassing methods like CUP, Resale Price, Cost Plus, Profit Split, and TNMM. The inter-quartile range is mandatory when applying these methods.
Economic Analysis – Benchmark Study
Comparability analysis in Romania considers territorial criteria and often prefers Romanian entities as the tested party in practice.
Notification Requirement
Groups must notify the tax authorities by the end of the reporting fiscal year, or alongside Form 101 submission. Failure to notify can result in fines.
Penalties and Interest Charges
Non-compliance with transfer pricing documentation requirements can result in penalties, ranging from RON 2,000 to RON 14,000 for various taxpayer categories. Incomplete or non-submission of documentation may lead to tax authorities estimating transfer prices.