The procedure for issuing the individual advance tax ruling

The Romanian tax authorities have recently published the procedure for the individual advance tax ruling. Among the main changes introduced by the new procedure, we mention the following:

• The taxpayer can request, exclusively by electronic means (i.e. VPS), a preliminary discussion before submitting the request for issuing the tax ruling; in the event that this request is submitted concurrently or after the request for issuing the tax ruling, it will no longer be taken into account by the tax authorities.

• The preliminary discussion has a role of understanding the aspects related to the tax ruling and is not equivalent to the initiation of the procedure for issuing the ruling. In addition, the comments/statements made by the tax authorities during these discussions do not constitute a commitment regarding the approval/rejection of the request for issuing the tax ruling.

• As part of the preliminary analysis, the request for issuing the advance tax ruling is not taken into account by the fiscal body in situations such as:
  • the request or documentation is not submitted by electronic means;
  • the request or documentation does not include the information required by the procedure, is not legible, includes conflicting information, or does not relate to the requesting taxpayer; the request covers several tax obligations, etc.

• The criteria for granting the request for tax ruling are much more restrictive. Among other things, the request for issuing the tax ruling may be rejected if: (i) the future tax situation under analysis has been the subject of a binding tax ruling request of the taxpayer or an affiliated entity, previously resolved by the authorities, (ii) the situation includes transactions that are not regulated in the Tax Code, (iii) alternative ways of carrying out the proposed transactions are presented, (iv) the information under analysis hides another factual situation (e.g. transactions without economic purpose), (v) the tax treatment applicable for the taxpayer is dependent on the tax treatment applicable to other entities/persons involved in the transaction, who have not requested the issuance of a tax ruling, etc.

• The binding tax ruling is approved by order of the Minister of Finance. Subsequently, the order may be revoked if the issuing tax body becomes aware of situations such as: (i) the conditions considered when issuing the tax ruling are not respected, (ii) the persons and entities involved in the transactions described are controlled by designated persons, etc. 

Source: Order no. 1178/2023 of the Minister of Finance for the approval of the Procedure regarding the issuance of individual advance tax ruling, in the form published on 30 March 2023.