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05 August 2019

Are you ready for the tax and employment authorities' dawn raids? - Romania

A wave of dawn raids from mixed teams of the Romanian tax and employment authorities (ANAF and ITM) is expected this August. As per public declarations, these measures target tax evasion and "black market" labour.

In this context, we recommend you take the necessary measures to ensure that all company employees are aware of the procedures that need to be followed during dawn raids.

Also, this might be a good time to review your company's tax practices and employment relations.

Proper company procedures during dawn raids are essential

The company procedures to be followed in the event of dawn raids by the authorities are aimed at ensuring that employees react appropriately, and that the company's rights and obligations are observed.

Said procedures generally set out: who in the company plays a key role during such audits and what that role is; the clear communication channels between those persons; the steps to be followed by each employee; the company's legal rights and obligations during the dawn raid.

Measures to be taken in preparation for this wave of dawn raids

Given the announced scope of these dawn raids, we recommend that – in preparation of such – you make sure that:

  • the company's service agreements concluded with freelancers reflect the economic substance of the relationship and comply with the independency criteria set out in the Fiscal Code;
  • you have correctly applied the available tax incentives regarding income tax and social security contributions;
  • you have correctly identified the benefits in kind granted to employees, while also applying the appropriate tax treatment;
  • you have duly submitted all tax returns related to income tax and social security contributions;
  • all persons carrying out activities for the company based on a subordinate relationship are employed in compliance with the relevant labour law rules;
  • you comply with the legal provisions regarding the national minimum gross base wage;
  • all individual employment agreements have been registered in Revisal in due time;
  • the employees are hired in compliance with the legal requirements regarding the necessary medical exams;
  • a personnel file exists for each employee;
  • you keep copies of the individual employment agreements at each employee's workplace; and
  • you have performed the proper health and safety at work instructions, as per the legal requirements.


authors: Theodor Artenie and Mara Moga-Paler