ANAF inspections of fixed and permanent establishments

In detail

The National Agency for Tax Administration (ANAF) is preparing for inspections to verify the existence of non-resident taxpayers’ fixed and permanent establishments in Romania.

According to recent statements by the institution’s representatives, risk analyses are already underway, following which ANAF will establish which taxpayers present a high degree of risk in terms of having a fixed and/or permanent establishment in Romania and which are not tax registered.

This topic is being addressed both in Romania and internationally, as it is high on the agenda for the Organisation for Economic Cooperation and Development (OECD) and the tax authorities of other member states. Those tax authorities are collaborating through the mechanism of information exchange to establish the actual tax situation of companies and to identify any fixed and  permanent establishments not properly registered.

At the national level, ANAF is preparing a first campaign of inspections regarding non-resident taxpayers. The second stage will be to conduct inspections in collaboration with the other member states of Romanian resident taxpayers carrying out activities or obtaining income from other states. The analysis by tax inspectors within the framework of inspection actions regarding fixed and permanent establishments is extremely thorough and involves the evaluation of all documents (contracts, financial-accounting documents, job descriptions and any other records) that show how the economic activity is conducted.

According to the legislation, a non-resident generates a fixed establishment when it “has in Romania human and technical resources through which it can regularly deliver goods and/or provide services”, while a permanent establishment is “the place through which is carried out in whole or in part the activity of a non-resident, either directly or through a dependent agent”.

The takeaway 

For more information on this topic and its implications for you, or for assistance with preparing the necessary documentation for inspections related to fixed and permanent establishments, our team is at your disposal.