Transfer pricing in Romania

• Even though Romania is not an OECD member, the OECD Transfer Pricing Guidelines are, in principle, recognised by the Romanian tax legislation.
• Still, there are certain particularities or additional information specifically requiredunder local legislation as regards the transfer pricing documentation. A lack of informationmay trigger the risk that the Romanian tax authorities will consider the TPdocumentation incomplete. Presentation of incomplete TP documentation maylead to penalties and entitles the Romanian tax authorities to proceed with theirown assessment of the taxpayer's transfer prices.
• Starting in 2016, large taxpayers – designated as such in a special order of thepresident of the National Agency for Fiscal Administration – which carry out transactionswith related parties over certain thresholds, are required to prepare theirtransfer pricing documentation files on an annual basis.

For transactions carried out between Romanian companies and their associated foreign entities resident in other member states, the double taxation which might result following the adjustment of profits on one side should, in principle, be eliminated by means of corresponding mirror adjustments, based on the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises or based on bilateral double taxation treaties. The relevant procedure is yet to be defined in the Romanian legislation in this respect (ie mutual agreement procedure).

Below is a summary of the transfer pricing obligations for Romanian taxpayers: