Foreign Investors Seek Romanian Tax Reform
A report from the Foreign Investors Council of Romania has proposed additional tax policy reforms to build on recent progress made towards a more equitable and transparent tax system.
The FIC wants to see closer consultation between the tax authority (ANAF) and business representatives, with more time allowed for stakeholders to review draft legislation and more leniency in favor of taxpayers when tax legislation is unclear. This would provide investors with more certainty about their future tax treatment.
The report also calls for a national database of tax laws and court decisions, a clearer and more transparent appeals process, and an acknowledgement from authorities that submitted documents are acceptable if not challenged by the tax authority within a pre-determined period of time.
It also says that greater efforts are needed to combat tax evasion and fraud. In particular, the FIC notes that ANAF needs to modernize its online operations. It says that trust between ANAF and taxpayers would be improved if the agency increased its efforts to combat the black economy and reduced oversight of compliant taxpayers. This approach could include higher penalties for taxpayers who do not comply with their tax obligations and incentives for compliant taxpayers.
It said refunds should be paid quickly, and if delays do occur, the tax authorities should be required to pay interest automatically.
Tax grouping is also discussed, with the FIC favoring the introduction of both corporate income tax and VAT grouping. It would also like to see the introduction of a global representative system for VAT.
Last, the FIC is seeking reinvestment relief, inventory write-off provisions, and exemptions from Romanian tax for foreign-based investment funds.
