Taxpayers classified in the category of large taxpayers from 1 January 2022 are subject to specific requirements regarding the preparation of the transfer pricing file.
Annual mandatory preparation of the transfer pricing documentation by certain large taxpayers
The large taxpayers which carry out transactions with related parties of a total annual value above certain thresholds have to prepare on an annual basis the transfer pricing documentation within the legal deadline for submission of the annual corporate income tax returns.
The transfer pricing documentation may be requested during or outside a tax audit for transactions undertaken starting from the year they became large taxpayers.
The thresholds considered for establishing the annual mandatory preparation of the documentation (applicable for the total annual value obtained by cumulating the value of transactions with all related parties, per transaction flow, excluding VAT) are:
- EUR 200,000 for interest for financial services;
- EUR 250,000 for provision of services;
- EUR 350,000 for acquisitions/sales of tangible or intangible assets.
The transfer pricing documentation is to be provided to the tax authorities within 10 days from the request date, but not earlier than 10 days from the deadline set for its preparation.
Preparation of the transfer pricing documentation in instances other than above
The large taxpayers that do not exceed the above-mentioned thresholds are required to prepare and present the transfer pricing documentation only upon request from the tax authorities during a tax audit – in case any of the following thresholds (applicable for the total annual value obtained by cumulating the value of transactions with all related parties, per transaction flow, excluding VAT) are exceeded:
- EUR 50,000 for interest for financial services;
- EUR 50,000 for provision of services;
- EUR 100,000 for acquisitions/sales of tangible or intangible assets.
The deadline for providing the documentation is set by the authorities between 30 and 60 days (the taxpayer having the possibility to request a single extension of at most 30 days).
The transfer pricing documentation shall not be requested for transactions covered by an Advance Pricing Agreement (APA) or those for which the authorities have issued a Decision for adjustment/estimation of the revenue or expense of one of the related parties, as per the Fiscal procedure code.
The EY team is available for further details on the mentioned above.
Prepared by:
- Gabriela Băncescu - Director, Transfer Pricing
For additional information, please contact:
- Alex Milcev - Tax & Law Leader Romania
- Adrian Rus - Partner, Leader of Transfer Pricing Department