The most important changes that have emerged in recent months, including those made by OG 31/2022

In recent months, the authorities have come up with several major changes related to the supervisory activity of the National Tax Administration Agency (ANAF), which taxpayers should take into account. The latest news was brought in at the end of the summer, by OG 31/2022. In addition, there are also some important jurisprudential developments that must be taken into account.

1. Anti-fraud monitoring: The viewpoint of the verified company must be analyzed and can change the outcome of the control. The authorities completed the legal framework for anti-fraud controls, on 3 September 2022, through OG 31/2022. Essentially, new provisions have been introduced obligating anti-fraud inspectors to analyze the audited company’s point of view and possibly even modify the audit findings. Although the changes are welcomed “with open arms” by experts, they say more clarity is needed in their wording.

2. More adjustments to financial inspections as well. OG 31/2022 (also as of September 3, 2022), provides, first of all, that the taxpayer’s obligation to cooperate within the framework of tax inspection extends also to situations where remote cooperation with inspectors is required. Second, the tax examination can last longer when non-resident businesses are targeted (from a maximum of 45 days to a maximum of 180 days), but tax experts point out that the measure is exaggerated. Thirdly, additional rules have appeared for cases where tax inspectors come across facts that may be criminal offenses and report them to the judicial authorities – these rules specifically indicate what can be done when criminal reports fail for one reason or another.

3. A new situation in which the statute of limitations can be suspended within the framework of the tax examination. Another change, effective September 3, 2022, has been brought about by OG 31/2022, a new mode in which the financial prescription can be suspended. It concerns the situation in which a natural person who is subject to a tax examination or personal tax status check dies and the authorities must determine his successors.

4. ANAF’s right to penalize violations of financial procedures expires after five years, so fines can be issued without problems with controls. The right of inspectors to apply fines for violation of financial procedures is provided for five years after the date the act was committed (compared to only six months), as stipulated in GEO 102/2022. The new rule is effective starting with acts committed on June 30, 2022. The amendment legitimizes a practice previously used by the Afghan Armed Forces, under which the organization imposes fines, as part of financial controls, even if whole years have passed since the offense was committed.

5. Merchants who send packages with cash on delivery will be able to control more easily. Postal providers will be required to provide monthly information to the tax office about online merchants sending packages with cash on delivery, according to GEO 67/2022. In this way, the authorities want to more easily identify online merchants who do not declare their income in part or in full, but the procedure must be carried out by order of ANAF in order to be effective – the document is currently under discussion.

6. Daily allowances can only be rescheduled by ANAF with the approval of labor inspectors. In order to prevent arbitrary reclassification of non-taxable daily allowance to taxable salary income, the authorities, by Law 72/2022, created an additional “candidate” in the supervisory activity of the tax office. Such a reset will only be possible if the tax inspectors have obtained the approval of labor inspectors, but a special procedure is required in this regard, which is still in the works.

7. Introducing an electronic transport system that allows monitoring the movement of goods with financial risks. The Electronic Transportation System was regulated by GEO 41/2022 to allow the monitoring and verification of dangerous goods transported by road. From July 1, 2022, the regime became mandatory, but the sanctions regime was postponed for three months (until October 1, 2022).

8. Financial bodies other than those competent to date will be able to carry out financial inspections and documentary examinations of taxpayers. An important change has been introduced regarding the rules of financial procedures by the government through OG 11/2022. In short, by order of the National Agency for Financial Management, it will be possible to establish other financial bodies, other than those that have hitherto competent, to carry out financial inspections and documentary examinations of taxpayers. However, it is up to the discretion of the head of ANAF, who has not yet issued such an order.

9. A change that will appear in the transfer pricing controls for taxpayers. Coordination of anti-tax base erosion and profit shifting is, recently, among the powers of the ANAF, according to GD 238/2022. This change essentially means that ANAF is getting more information to ensure that the profits of multinational corporations are taxed where they should be, but also that companies should expect more of the numerous and complex controls in the area of ​​transfer pricing.

10. The impossibility of challenging the supervisory reports issued by the anti-fraud inspectors is a constitutional matter. Monitoring reports that have been completed after anti-fraud inspectors checks by companies cannot be challenged. But this does not mean that we are talking about a ban on access to justice and a constitutional problem, as the judges of the Romanian Constitutional Court made clear in Resolution 172/2022.

11. The tax authorities can analyze the deduction of expenses only in accordance with statutory requirements, and not according to the business decisions of the company. In the context where tax inspectors tend to challenge the business decisions of taxpayers when analyzing the conditions for deduction of expenses, a recent decision of the Supreme Court of Cassation and Justice can put an end to this practice. The judges established that the tax authorities can analyze the deduction of expenses only from the perspective of legal conditions, without giving opinions on the business decisions of the controlled company.

NB: Articles written by our editorial staff regarding tax audit news can be followed in the special section here.

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