Romania: local rules

Romania's arm's length rule is Article 11(4) of the Fiscal Code (Law 227/2015): deals between affiliated persons follow the market value principle. A person is affiliated at a 25% holding or voting right, or through effective control (art. 7 point 26). If the principle is not met, the tax authority adjusts the result, and if the taxpayer gives no data it estimates, using the central tendency of the market. The rules cover deals between two Romanian companies too. The duty to document is in Tax Procedure Code art. 108(2), and the details are in ANAF Order 828/2026 (Official Gazette 543 of 2 July 2026), which applies to annual files for transactions from 2026 and to audits started after 1 January 2027. Order 442/2016 applies to earlier audits, the OECD Guidelines fill gaps (Order 828 art. 12), and the limitation period is 5 years.

Large taxpayers on the ANAF list prepare a file every year for each affiliate and transaction type at or above EUR 100,000 (services), EUR 200,000 (financing), EUR 250,000 (intangibles and royalties) or EUR 350,000 (tangible goods). They file it in the Virtual Private Space within 30 working days after the profit tax return deadline, which is early August for a calendar year. Small and medium taxpayers prepare it only when asked in an audit, at EUR 50,000, 100,000, 150,000 and 200,000 for the same four types, with 30 to 60 working days to hand it over, extendable once by 30. There is no separate master file or local file: one file has a group section based on the OECD master file, then company, transaction and comparability sections, and foreign documents need Romanian translations. No file is needed for transactions covered by an advance pricing agreement or an adjustment decision (art. 6).

Article 11(4) lists the comparable price, cost plus, resale price, net margin and profit split methods, plus any OECD method, and the most appropriate one must be used. A transaction is at arm's length if its profitability indicator is inside the interquartile range (Order 828 art. 8), which the Order defines by splitting the comparison range into four equal segments and dropping the first and last (art. 10). If the result is outside the range, the tax office adjusts to the median, and if there are too few comparables for a range it uses at least three and their arithmetic mean (art. 11(2)). A Romanian tested party is benchmarked on Romanian comparables first, then EU and UK, then EMEA, then worldwide (art. 9). Multi-year studies cover at least 3 years.

Not preparing or not handing over the file is a fine of RON 12,000 to 14,000 for medium and large taxpayers and RON 2,000 to 3,500 for others (Tax Procedure Code art. 336(1)(e) and (2)(c)). A missing or incomplete file also means arm's length pricing is not shown, and ANAF can estimate transfer prices for those transactions and years (Order 828 art. 7). A late or wrong CbC report is fined RON 30,000 to 50,000 and a missing one RON 70,000 to 100,000. Adjustments bring extra profit tax with late interest and penalties. Pillar Two penalties follow Law 207/2015, and using a non-standard information return form is fined RON 10,000 to 30,000 (Tax Procedure Code art. 336(1)(pp), added by Government Ordinance 1/2026).

Law 431/2023, as amended by Government Ordinance 21/2025, applies the income inclusion rule and the domestic top-up tax to fiscal years that start on or after 31 December 2023, and the undertaxed profits rule to years that start on or after 31 December 2024. It covers groups with revenue of at least EUR 750m in two of the four prior years. Each Romanian entity files the top-up tax information return (ANAF Order 218/2026) or, where the group files abroad, the N409 notification, 15 months after year end, or 18 months for the first year in scope. The top-up tax is paid by the same date. A group with several Romanian entities can choose one of them to declare and pay the domestic top-up tax, by filing a notification within 6 months of year end (12 months for the first year). Late and wrong filings follow the penalties in Law 207/2015.

Groups with consolidated revenue of at least EUR 750m file a country-by-country report (form R404) within 12 months of year end if the ultimate parent is resident in Romania or Romania is the reporting state. Every Romanian entity of such a group sends a notification (form R405) by the last day of the group's reporting year, but not later than its previous-year profit tax return date. Advance pricing agreements are issued by ANAF, and mutual agreement procedures follow the tax treaties and EU Directive 2017/1852. The profit tax return is due on 25 June of the next year for a calendar year, and on the 25th of the 6th month after a modified fiscal year. A date on a weekend or public holiday moves to the next working day, and Orthodox Easter moves each year, so Good Friday, Easter Monday and the Pentecost days move with it.