The new tax rules adopted by Romania and other countries under the BEPS Convention will increase the tax base by avoiding the use of double taxation and transfer pricing to optimize tax costs of multinationals, say Deloitte officials.
Thus, multinationals from OECD countries including Romania, which joined the Convention against double taxation called Base Erosion and Tax Shifting (or BEPS) will get a higher profit in their home records to work due to changes in tax legislation that will take place over the next years. In addition, the convention will eliminate tax havens intermediaries so that companies from Romania will have to surface out more profits, taxed by the state as such.
“States have realized that a new source of revenue may come from the multinational area … There is a paradigm shift, the revenues will be taxed at their origin… This change took place at the initiative of the G20 and will affect all the states that adhered or use the OECD system and probably in 2016 will be close to completion and will begin implementation in each country”, says Dan Bădin, coordinating partner, Fiscal and Legal Services, Deloitte Romania.
“These measures will positively affect countries such as Romania …. We expect profits taxed here to be higher. Government is already working on the set of measures agreed by the OECD”, says Bădin.
Deloitte representatives also say that the rules will be more drastic in terms of the transfer pricing and in the e- commerce area the creation of local permanent point of sales will be required. Also, transfer pricing files will be made and filed to the local tax authorities annually, added Ciprian Gavriliu, Director, Transfer Pricing, Deloitte.
If one of the effects the new legislation will be the increase of bureaucracy, companies having to surge the volume of reported information, the state will collect more in taxes. And consulting focus will move more towards compliance, Deloitte representatives say.
