The control exercised by the tax authorities over individuals has intensified over the past five years against the background of the diversification of their sources of income and the detection of some situations where the income received in this way was incompletely declared. Thus, as part of the program to increase voluntary compliance with tax legislation, the central tax authorities have carried out important audit activities, which were aimed either at areas with a high risk of non-declaration of received income, such as cryptocurrency trading, landscaping, advertising in the online sale of certain products, etc., or targeted persons in whose case discrepancies between declared income and income assessed by ANAF (differences of more than 50,000 lei in one year) were found.

At the same time, the legislation is adapted to the trends revealed in practice in order to create a sufficiently broad framework for carrying out control activities in relation to natural persons. Thus, at present, taxpayers in this category can be subjected to either a “personal financial situation check” – the equivalent of a tax check for commercial companies, with all the consequences that this entails (the check, which is the exclusive responsibility of ANAF, has a long period of execution, includes an in-depth analysis situation, ends with the issuance of a decision on imposition, etc.), or “documentary verification” (which may also be within the competence of the General Directorate for Combating Fraud). , it is executed faster, and the decision on imposition is made subject to further verification).

The evolution of these controls is clearly demonstrated in the data contained in the ANAF reports. Thus, if for the entire year 2022, 284 control actions were carried out for individuals, as a result of which 141 tax decisions were issued for a total amount of 47.6 million lei, then in 2023, a significant increase in checks of this category of taxpayers is noted. In the first three quarters of last year alone, ANAF carried out 512 control actions (which is an increase of more than 80% compared to the whole of 2022), resulting in 127 tax decisions for a total amount of 53.5 million lei.

Radical changes were adopted in 2023

And the numbers are likely to be much higher starting this year, at least in terms of the amounts included in tax rulings, given the new impact regulation in this area coming in 2023. This is, on the one hand, the emergence of specific rules (by order of the President of ANAF) for people “with large assets”, more than 25 million euros, and, on the other hand, an increase in the tax rate on incomes whose source is not established, from 16% to 70 % provided for by Law No. 296/2023. In other words, the control of individuals should bring at least four times more funds to the state budget in the next period, simply by increasing the tax rate, without taking into account the corresponding interest and penalties.

Under these conditions, individuals subject to ANAF control should find out when the 70% taxation of income from unspecified sources applies, what the tax base is and what problems it may create, how they can approach or prepare for such a review and what potential legal remedies are available. protection

So far, practice shows that such control requires a huge amount of time from taxpayers not only for collecting documents that should be available (for example, statements from bank accounts that have been closed in the meantime, removing duplicates from notary offices where the originals are no longer available, request for original certificates from taxpayers outside Romania, etc.), but also to organize them in the way required by law, with sufficiently detailed explanations, but nevertheless presented synthetically, so that they are easily understood by the authorities. In addition, we noted that it is extremely important to correctly understand the type of information requested during the inspection, the time available for its delivery to the authorities, as well as finding a balance between the formality established by law for the request/transfer of information and documents and the creation of a fast communication channel contact with authorities to clarify certain aspects. And, last but not least, I have noticed that sometimes an audit, because of its investigative nature, tends to informally extend to periods other than the one audited, either because documents are requested from persons well before the audited period, or because natural persons themselves provide information and documents relating to the period following the controlled one for the documentation of answers to the requested explanatory notes. In any case, a good knowledge of both legal texts and case law regarding the verification of personal financial status is important, but not sufficient.

Each of the interested parties, even if they do not believe that there is a reason to be on the list of individuals at risk of non-compliance, remains to get used to the idea that at some point they may be the subject of a tax audit and prepare for what will be a difficult climb on a very steep slope.

Review material from Raluka Bontas, Fiscal Services Partner, Deloitte Romania and Alex Služitoru, Partner, Referees and Associations | Deloitte Legal.