The 15% tax on multinational profits published in the Official Gazette


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Romania introduced the 15% tax on multinationals’ profits, according to a law published on Friday in the Official Gazette. Basically, two taxes are introduced: “additional” and “national additional”. Romania has introduced several tax law amendments, part of a taxation reform, following an agreement concluded with the OECD. In this sense, a European directive (2022/2023) is practically transposed.

The tax applies to entities that are based in Romania and that are members of a group of multinational enterprises or of a large national group, group that has an annual income of at least the equivalent in lei of the sum of 750 million euros.

The Ministry of Finance has a term of 12 months to draw up the application rules. The effective tax rate of a group of large multinational enterprises must be compared with the minimum tax rate of 15% to determine whether the group has to pay additional tax by applying IIR (income inclusion rules) and UTPR (profits rules undertaxed).

Thus, if the effective tax rate is lower than the minimum rate in a particular jurisdiction, the tax must be allocated to the entities in the MNE group that are required to pay that tax in order to comply with the 15% rate.

If the share is less than the minimum, the group parent must apply revenue inclusion rules (IRR) in respect of its low-tax incorporated entities to ensure that such group is required to pay tax at a minimum effective tax rate of 15%

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1 Comment
  1. Panagiotis Spyridis says

    The big question here for the Ministry is if these large Multi companies submit the “Transfer Pricing File” annually?

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