“Si vis pacem, para bellum” is Latin for if you want and desire peace, prepare for war. This is the message we are sending you in the perspective of a tax audit, said Kelin Stan, lawyer and director of Băncilă, Diaconu si Asociații, during the EY Romania conference.

“That way you can end up in a better position than if it didn’t happen,” he said.

Speaking about audits in multinational corporations, Stan said that the issue of fiscal audits on management remuneration is not exhausted.

“It doesn’t even seem like an end. Our recommendation: economic substance and documentation. Have documents so that you can bury people from ANAF in papers when they come to ask how you justify the actual provision of services,” the lawyer explained.

He advises them to have very clear documentation of the direct benefit the company has received from the services they have purchased in the group, and of course to have patience and nerves of steel, as this will likely be the same discussion they have had before. it was 10 years ago on the same topic.

ANAF inspectors do not want to have an open discussion about transfer prices

According to him, things are even more complicated in the field of transfer prices.

“Given the lack of specialists (no ANAF and no MF) in transfer pricing, you understand how difficult it is to come up with complex structures, perhaps with more nuanced and nuanced economic explanations, and face a lack of resources and a clear unwillingness to make any difference on the part of ANAF.

• “In the field of transfer pricing, what we see in practice is… I wouldn’t call it obstinacy, because it sounds ugly, but a lack of willingness to have an open technical discussion on some technically, economically, legally correct basis.”

“Unfortunately, this thing leads to a conflict zone, a tax dispute, regardless of whether we are discussing the dispute at the level of international courts or more complex ones,” he noted.

After the ANAF practice was invalidated after Berlin Chemie on permanent and permanent premises, the inspectors changed their strategy

A few years ago, this was a hot topic: permanent premises, permanent premises.

“They found the goose that laid the golden eggs, and everything was permanent representation, everything was permanent representation. The problem is that Berlin Chemie came in and put a handbrake on everything, which meant that this kind of taxation was perhaps a little heroic,” explained Kaelin Sten.

Unfortunately, he says, the brake was not complete, because the examiners simply recovered and reorganized with a different approach: we no longer have stationary offices and permanent offices, but transactions are reclassified.

“What does this mean? They find reasons to say that there is no economic purpose of the operation or that the purpose declared by the taxpayer is not real. ANAF finds an economic purpose,” the lawyer also noted.

• It explains to you exactly what you mean when you run your business, and the reason is the complete adjustment of transactions and the reality of economic and actual operations with the unique consequence of compressing the most consistent overlap.

• This is a very complex matter that needs to be managed in advance. You never know what idea ANAF will come up with.

“Just because you manage to resolve it as an economic substance and be able to justify it doesn’t mean that they won’t find another interpretation or another reason to say that the real economic substance of your deals is something you don’t even think about – it would pass if it were an economic essence,” he clarified.

• “The consequences are taxation, 7 years of litigation and in the end, with a little luck, you still have the right to sue them for another 3-4 years to collect interest from them. During that time, the kids were in college, but that’s okay, because at the end of the day, you’re taking the interest out of them.”

“It’s funny, but sad at the same time. This is the situation, we see it in practice. Last year, at least, there was a sizzle from that side. There was excitement because Berlin Chemie somehow came in and parked this opportunity to have a permanent headquarters and a permanent headquarters,” said Kaelin Stan.

Although ANAF was wrong about gift vouchers, it looks like we won’t see an amnesty

We remind you that in 2019, the tax office took advantage of the uncertainty of the law to start a thematic campaign of checks of the tax regime from the point of view of income tax and social contributions for gift vouchers purchased by companies.

HotNews.ro writes about this topic. That is, it was not known who should pay the contributions: the enterprise that gave, or the enterprise whose employees received the vouchers?

During a conference organized in 2020 by PwC Romania, the event was attended by the then head of ANAF, Mirela Kelugerianu, who boasted about what she had discovered and what sanctions she had imposed, as well as Doru Dudash, director general of the Ministry of Public Finance. (MFP), who believes that in such a case, the tax office should have asked the specialists who drafted the law before starting inspections.

*Later, Dudash left the ministry

Essentially, the Ministry of Finance then admitted that ANAF had made a mistake in its interpretation of the law.

During the EY event, Kelin Stan said the saga of gift vouchers is not over.

“We want at least a declarative level of their amnesty, but we do not see results, although the bill on amnesty was promulgated by the president last year in July. It was returned from the president to the parliament for reasons of form and procedure,” he said.

• Unfortunately, the last update on the website of the Chamber of Deputies is from December 20, when the last opinion of the Budget and Finance Committee was received. We are waiting for the law on the amnesty of gift certificates.

“I don’t want to send the wrong or wrong signal, but I am very emotional about this amnesty law. In the context in which we are discussing such a big problem with the levy, the budget, the deficit, it is hard to believe that they will return a lot of money to the taxpayers on the basis that you were wrong 2 years ago when the situation was probably not the same difficult as it is now,” Stan added.

As an idea, he says, gift cards are still a problem.

“We have clients who have already gone to court, and all of this work is being called into question, waiting to see if this legislation comes through or not,” he said.

• We are waiting to see what will happen with SAF-T and tax audits in this area. I hope we don’t end up talking to tax inspectors this year, but you never know.

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