In recent years, digitization and new information technologies have been developing rapidly. Both companies and tax authorities must adapt to the new context. The first regulatory step with a significant impact in terms of fiscal consequences for EU member states is the adoption of a directive to ensure a global minimum level of taxation of multinational enterprise groups and large national groups in the European Union (Pillar II).

It will be a real challenge for multinational companies to adapt their tax systems to the new rules, given that legislation (both primary and secondary) will have a different speed of implementation from one jurisdiction to another. In addition, in terms of compliance burden, new tax returns are expected to be introduced, which will increase the administrative burden of compliance.

In practice, we expect that there will also be difficulties in harmonizing accounting policies as well as transfer pricing policies within multinational groups operating both in tax jurisdictions where Tier II or Tier I rules will apply, and in jurisdictions where these rules will not apply .

Read the rest of the article on the PwC Romania blog

The article was signed by Monica Todose – director, Ala Popa – senior manager and Ana-Maria Yoana Yatsu – senior consultant

Article supported by PwC Romania