Romania Compliance Hub: Employment, Payroll & Tax Guide
Key Law Terms Overview in Romania
Law No. 53/2003 of 24 January 2003
CHAPTER I
Scope
ART. 1
(1) This Code regulates the field of labour relations, the manner in which the control of the implementation of the regulations in the field of labour relations takes place, as well as the labour jurisdiction.
(2) This Code shall also apply to the labour relations regulated by special laws, only in so far as they do not contain derogatory specific provisions.
ART. 2
The provisions contained in this Code shall apply to:
a) Romanian citizens who are employed based on an individual labour contract and who work in Romania;
b) Romanian citizens employed based on individual labour contract and who carry out their activity abroad, based on contracts concluded with a Romanian employer, except when the legislation of the state on the territory of which the individual labour contract is being performed is more favourable;
c) foreign or stateless citizens employed under an individual labour contract, who work for a Romanian employer on the territory of Romania;
d) persons who have acquired the refugee status and are employed on an individual labour contract on the territory of Romania, according to the law;
e) apprentices who work based on an on-the-job apprenticeship contract;
f) employers who are natural or legal persons;
g) trade unions or employers’ organisations.
CHAPTER II
Fundamental principles
ART. 3
(1) The freedom to work is guaranteed by the Constitution. The right to work may not be restricted.
(2) Any person shall be free to choose their work place and profession, trade, or activity to carry out.
(3) No one may be forced to work or not to work in a certain work place or profession, whatever that might be.
(4) Any labour contract concluded in violation of the provisions of paragraphs (1) – (3) shall be null and void by right.
ART. 4
(1) Forcible work shall be prohibited.
(2) The phrase forcible work designates any work or service imposed to a person under threat or for which the person has not given his free consent.
(3) The following work or activity imposed by the public authorities shall not be seen as forcible work:
a) based on the law concerning the mandatory military service**);
b) when meeting the civic obligations set up by the law;
c) based on a judgment of conviction, which remained final, according to the law;
d) in a force majeure, i.e. in the event of a war, catastrophe or risk of catastrophe such as: fires, floods, earthquakes, violent human or animal epidemics, invasions of animals or insects, and, in general, under all circumstances jeopardising our life or the normal living conditions of most of the population or of part of it.
**) See the Law No 395/2005 on the suspension of the mandatory military service during peacetime and passing to the military service on a voluntary basis, published in the Official Gazette of Romania, Part I, No 1.155 of 20 December 2005, as amended.
ART. 5
(1) Within the labour relations, the principle of the equal treatment for all employees and employers shall apply.
(2) Any direct or indirect discrimination towards an employee, based on criteria such as sex, sexual orientation, genetic characteristics, age, national origin, race, colour of the skin, ethnic origin, religion, political options, social origin, disability, family conditions or responsibilities, union membership or activity, shall be prohibited.
(3) A direct discrimination shall be represented by actions and facts of exclusion, differentiation, restriction, or preference, based on one or several of the criteria provided in paragraph (2), the purpose or effect of which is the failure to grant, the restriction or rejection of the recognition, use, or exercise of the rights provided in the labour legislation.
(4) An indirect discrimination shall be represented by actions and facts apparently based on criteria other than those provided in paragraph (2), but which produce the effects of a direct discrimination.
ART. 6
(1) Any employee who performs work shall benefit from adequate work conditions for the activity carried on, social protection, labour safety and health, as well as the observance of his dignity and conscience, with no discrimination.
(2) All employees who perform work shall have their right to collective negotiations, their right to personal data protection, as well as their right to protection from unlawful dismissals, recognised.
(3) For equal work or work of equal value it shall be forbidden any discrimination for criteria such as sex with regard to all remuneration elements and conditions.
ART. 7
Employees and employers may associate freely for the defence of their rights and the promotion of their vocational, economic, and social interests.
ART. 8
(1) Labour relations are based on the principle of consensus and good faith.
(2) For a proper conduct of the labour relations, the participants in labour relations shall inform and consult each other, in compliance with the law and with the collective labour contracts.
ART. 9
The Romanian citizens are free to be employed in member states of the European Union, as well as in any other state, in compliance with the norms of international labour law and with the bilateral treaties Romania is a party.
TITLE II
Individual labour contract
CHAPTER I
Conclusion of the individual labour contract
ART. 10
An individual labour contract is a contract based on which a natural person, called employee, undertakes to perform work for and under the authority of an employer, who is a natural or legal person, in return for a remuneration referred to as wages.
ART. 11
The clauses of the individual labour contract cannot contain contrary provisions or rights below the minimum level set up by normative acts or by collective labour contracts.
ART. 12
(1) An individual labour contract shall be concluded for an indefinite period.
(2) As an exception, an individual labour contract may also be concluded for a definite period, under the express terms provided by the law.
ART. 13
(1) A natural person shall acquire capacity to work after having turned 16 years of age.
(2) A natural person may also conclude a labour contract, as an employee, after turning 15 years of age, based on his parents’ consent or on the consent of the lawful guardians, for activities suitable for his physical development, aptitudes and knowledge, unless this places his health, development, and vocational formation under risk.
(3) Employment of persons under the age of 15 shall be prohibited.
(4) Employment of persons placed under court interdiction shall be prohibited.
(5) Employment in difficult, harmful, or dangerous work places shall only take place after the person has turned 18 years of age; such work places shall be established by Government decision.
ART. 14
(1) For the purposes of this Code, employer means a natural or legal person that may employ, according to the law, labour force based on an individual labour contract.
(2) The legal person may conclude individual labour contracts, as an employer, after having acquired that legal status.
(3) The natural person shall acquire the capacity to conclude individual labour contracts, as an employer, after having acquired full capacity of exercise.
ART. 15
It is prohibited, under the sanction of absolute nullity, to conclude an individual labour contract for the purpose of performing an illicit or immoral work or activity.
ART. 15^1
For the purposes of this Law, undeclared work means:
#M27
a) to accept a person to work without the prior conclusion of the individual labour contract in writing, no later than one day before the beginning of the activity;
b) to accept a person to work without transmitting the elements of the individual labour contract to the General Register of employees no later than the day before the beginning of the activity;
#M24
c) to accept an employee to work during the period in which his individual labour contract is suspended;
d) to accept an employee to work outside the working hours established under the part-time individual labour contracts.
#M27
ART. 16*)
(1) The individual labour contract shall be concluded on the basis of the written consent of the parties, in Romanian, no later than the day before the beginning of the activity by the employee. The obligation to conclude the individual labour contract in writing devolves on the employer.
(2) Prior to the beginning the activity, the individual labour contract shall be registered in the general register of employees, which shall be sent to the territorial labour inspectorate no later than the day before the beginning of the activity.
#M24
(3) The employer shall be obliged, before beginning the activity, to hand over to the employee a copy of the individual labour contract.
(4) The employer shall be obliged to keep at the work place a copy of the individual labour contract for the employees who pursue activity in that place.
(5) The work performed under an individual employment contract constitutes length of service.
(6) Unmotivated absences and unpaid leaves shall be deducted from the length of service.
(7) Exceptions to the provisions of paragraph (6) shall be the unpaid leaves for vocational training, granted under the terms of Articles 155 and 156.
#CIN
*) 1. By the Decision of the High Court of Cassation and Justice No 37/2016 it has been admitted the referral for the settlement of some matters of law and, in the interpretation and application of the provisions of Article 16 (1) and Article 57 (5) and (6) of the Labour Code, combined with Article 211 b) of the Law No 62/2011, Article 35 of the Civil Procedure Code and Article 6 of the European Convention for the Protection of Human Rights, it has been established that, in the event of the party’s failure to fulfil the obligation to conclude an individual labour contract in writing, the natural person who has worked for and under the authority of the other party has at his disposal the action for establishing the labour relation and the effects thereof also in case that the labour relation ceased before the referral to the court.
We specify that, following the publication of the Decision of the High Court of Cassation and Justice No 37/2016, Article 16 (1) was modified by Article I point 2 of the Government Emergency Ordinance No 53/2017 (#M24), as amended.
Derogations from the provisions of Article 16 have been allowed by:
Article 5 (6) of the Law No 176/2018 on internship (#M30).
We specify that the above-mentioned derogatory provisions are reproduced in point 9 of CIN note at the end of the updated text.
#M27
ART. 16^1
(1) For the purposes of Article 16 (4), the work place is the place where the employee pursues his activity, located within the perimeter ensured by the employer, a natural or legal person, at the head office or at branches, representative offices, agencies or work stations belonging to him.
(2) The copy of the individual labour contract shall be kept at the workplace defined according to paragraph (1) on paper or in electronic form, by the person designated by the employer for that purpose, in compliance with the provisions on the confidentiality of personal data.
#B
ART. 17
(1) Prior to the conclusion or amendment of an individual labour contract, the employer shall be under the obligation to inform the person selected for employment, or the employee, as applicable, about the essential clauses he intends to include in the contract or to change.
(2) The obligation to inform the person selected for employment or the employee shall be deemed as being fulfilled by the employer at the time of signing the individual labour contract or the additional deed, as applicable.
(3) The person selected for employment or, as applicable, the employee, shall be informed about the following elements at least:
a) the identity of the parties;
b) the work place or, in the absence of a stable work place, the possibility that the employee may work at various places;
c) the employer’s head office or domicile, as applicable;
d) the position/occupation according to the specification in the Classification of occupations in Romania or to other regulatory acts, as well as the job description, with the specification of the job duties;
e) the evaluation criteria of the employee’s professional activity applicable at the level of the employer;
f) the risks specific to the job;
g) the date from which the contract is going to take effect;
h) in the event of a labour contract for a definite period or a temporary labour contract, the duration of such contracts;
i) the duration of the rest leave the employee is entitled to;
j) the conditions under which the contracting parties can give their notice and the duration of the latter;
k) the basic wages, other constitutive elements of the wage revenues, as well as the payment periodicity of the wages the employee is entitled to;
l) the normal length of work, expressed in hours/day and hours/week;
m) the indication of the collective labour contract regulating the work conditions for the employee;
n) the length of the trial period.
(4) The elements in the information provided in paragraph (3) must be found also in the contents of the individual labour contract.
#M24
(5) Any change of one of the elements provided in paragraph (3) during the performance of the individual labour contract shall require the conclusion of an additional deed to the contract, before the amendment is operated, except for the circumstances where such a change is expressly provided by law or in the applicable collective labour contract.
#B
(6) Upon the negotiation of, conclusion of, or amendment to an individual labour contract, any one of the parties may be assisted by third parties, according to their own choice, in compliance with the provisions of paragraph (7).
(7) As regards the information provided to the employee, prior to the conclusion of the individual labour contract, a confidentiality contract between the parties may be concluded.
ART. 18
(1) In case that the person selected for employment or the employee, as applicable, is to carry out his activity abroad, the employer shall be under the obligation to provide him, in due time, before his departure, with the information provided in Article 17 (3), as well as information referring to:
a) the duration of the work period to be performed abroad;
b) the currency in which his wages will be paid, as well as the payment methods;
c) the benefits in cash and/or in kind related to the activity carried out abroad;
d) the climate conditions;
e) the main regulations in the labour legislation of that country;
f) the local customs the non-observance of which might put the employee’s life, freedom, or personal safety at risk;
g) the repatriation conditions for the worker, as applicable.
(2) The information provided in paragraph (1) a), b) and c) shall have to be listed also in the content of the individual labour contract.
(3) The provisions of paragraph (1) shall be supplemented by special laws regulating the typical work conditions abroad.
ART. 19
If the employer does not comply with his obligation to inform as provided in Articles 17 and 18, the person selected for employment or the employee, he shall be entitled to notify the competent court of law, within 30 days from the date of such obligation not being met, and ask for compensation corresponding to the prejudice caused to him as a result of the non-compliance by the employer with his obligation to inform the employee.
ART. 20
(1) Apart from the essential clauses provided in Article 17, the parties may also negotiate and include other specific clauses in the individual labour contract.
(2) The following are deemed as specific clauses, without limiting them to this listing:
a) the clause on vocational formation;
b) the non-competition clause;
c) the mobility clause;
d) the confidentiality clause.
ART. 21
(1) Upon the conclusion of the individual labour contract or throughout its performance, the parties may negotiate and include in the contract a non-competition clause under which the employee shall be under the obligation, after the cessation of the contract, not to perform, for his own interest or that of a third party, an activity which is competing with the one performed for his employer, in exchange for a monthly non-competition emolument which the employer undertakes to pay for the entire non-competition time period.
(2) The non-competition clause shall only take effect if the individual labour contract clearly provides the activities the employee is prohibited from performing from the date of cessation of the contract, the amount of the monthly non-competition emolument, the time period for which the non-competition clause causes its effect, the third parties on behalf of whom the performance of the activity is being prohibited, as well as the geographic area where the employee might be in actual competition with his former employer.
(3) The monthly non-competition emolument due to the employee shall not represent wages, shall be negotiated and shall be at least 50% of the average gross wages in the last 6 months prior to the date of cessation of the individual labour contract or, if the duration of the individual labour contract was less than 6 months long, of the average gross monthly wages due to him for the contract period.
(4) The non-competition emolument shall represent an expense made by the employer, shall be deductible upon the calculation of the taxable profit, and the tax shall be charged from the beneficiary natural person, according to the law.
Reference Link: https://dialogsocial.gov.ro/wp-content/uploads/2020/09/Law-no-53-2003-Labor-Code.pdf
Disclaimer: This content is provided for general informational purposes only and does not constitute legal advice.
Government Ordinance No. 92/2003 on the Fiscal Procedure Code (official English text published by ANAF)
CHAPTER 1
Scope of the Fiscal Procedure Code
ARTICLE 1
Scope of the Fiscal Procedure Code
(1) This code regulates the rights and obligations of the parties within the fiscal and legal relations concerning the administration of taxes and fees payable to the State and local budgets as provided by the Fiscal Code.
(2) This Code also applies for the customs rights administration as well as for the administration of the receivables generated by the contributions, fines and other amounts constituting revenues of the general consolidated budget, according to the law, if not otherwise provided by the law.
(3) The administration of the taxes, fees, contributions and other amounts owed to the general consolidated budget shall mean the totality of the activities performed by the fiscal bodies related to:
a) tax registration;
b) declaration, determination, check and collection of the taxes, fees, contributions and other amounts owed to the general consolidated budget;
c) solving of the claims against the tax administration documents.
ARTICLE 2
The relation between the Fiscal Procedure Code and other legal acts
(1) The administration of taxes, fees, contributions and other amounts owed to the general consolidated budget as provided in art. 1 is to be enforced according to the provisions of the Fiscal Procedure Code, Fiscal Code and other regulations adopted for their implementation.
(2) This code constitutes the common right procedure for the administration of the taxes, fees, contributions and other amounts owed to the general consolidated budget.
(3) Where this code cannot be applied, the provisions of the Civil Procedure Code are to be applied.
ARTICLE 3
Modification and completion of the Fiscal Procedure Code
(1) This code is to be modified and completed only by law, promoted, as a rule, 6 months before the date of its entry into force.
(2) Any modification or completion to this code shall enter into force starting with the first day of the year next to the year of its adopting by law.
ARTICLE 4
Setting up and functioning of the Fiscal Procedure Commission
(1) Within the National Agency for Fiscal Administration shall be set up the Fiscal Procedure Commission having the responsibility to make decisions concerning the unitary application of this code and of the laws from the competence scope of the National Agency for Fiscal Administration, unless otherwise provided by law.
(2) The rules of organization and operation of the Fiscal Procedure Commission shall be approved by Order of the President of the National Agency for Fiscal Administration, which shall be published in the Official Gazette of Romania, Part I.
(3) The Fiscal Procedure Commission shall be coordinated by the President of the National Agency for Fiscal Administration.
(4) The decisions of the Fiscal Procedure Commission shall be approved by Order of the President of the National Agency for Fiscal Administration, and shall be published in the Official Gazette of Romania, Part I.
(5) The uniform solutions adopted by the decisions of the Fiscal Procedure Commission and approved by Order of the President of the National Agency for Fiscal Administration shall be applicable starting with the date of the publishing of the relevant decisions according to par. (4).
(6) The uniform solutions provided in par. (5) shall be applicable also to the procedures in progress.
CHAPTER 2
General conduct principles in the administration of the taxes, fees, contributions and other amounts owed to the general consolidated budget
ARTICLE 5
Consistent application of the legislation
The tax body shall have the obligation to consistently apply the provisions of the fiscal law on the Romanian territory, aiming the correct determination of the taxes, fees, contributions and other amounts owed to the general consolidated budget.
ARTICLE 6
Exercise of the assessment right
The fiscal body shall be entitled to assess, in the limits of its attributions and competences, the relevance of tax state of facts and to adopt the solution admitted by the law, based on complete findings concerning all the edifying circumstances in case.
ARTICLE 7
Active role
(1) The tax body advises the taxpayer on his rights and obligations during the procedure development, according to the fiscal law.
(2) The fiscal body is to be entitled to examine ex officio the actual state of fact, to obtain and use all information and documents that are necessary for a correct assessment of the taxpayer’s tax state of fact. The analysis performed by the fiscal body is to identify and consider all relevant circumstances of each case.
(3) The tax body is to have the obligation to objectively examine the tax state of fact and also to advise the taxpayers in the declarations and other documents submission and correction, each time this is necessary.
(4) The tax body is to decide upon the nature and volume of examinations, according to circumstances special to each of the cases and within the limits provided by the law.
(5) The fiscal body is to guide the taxpayer in the application of the provisions of the fiscal law. Assistance is to be provided either upon the taxpayer requests or upon the initiative of the fiscal body.
ARTICLE 8
Official language in the fiscal administration
(1) The official language in the fiscal administration is Romanian language.
(2) If to the fiscal bodies are submitted petitions, justifying documents, certificates or other writs in a foreign language, the fiscal bodies shall request to be accompanied by their translations into Romanian, certified by authorized translators.
(3) The legal provisions concerning the use of the national minorities’ language is to be applied accordingly.
ARTICLE 9
Right to be listened to
(1) Before taking the decision, the tax body is to have the obligation to assure to the taxpayer the possibility to express his point of view regarding the facts and circumstances relevant for the decision making.
(2) The fiscal body is not have the obligation to apply the provisions of par. (1) in the following cases:
a) the delay in the decision taking endangers the real tax state of fact related findings concerning the obligations fulfillment by the taxpayer or the adoption of other measures provided by the law;
b) the tax state of fact presented shall be modified insignificantly concerning the amount of the tax receivables;
c) the information presented by the taxpayer, given by this one in a declaration or application, is accepted;
d) measures of mandatory execution are to be undertaken.
ARTICLE 10
Obligation to cooperate
(1) The taxpayer is to have the obligation to cooperate with the tax bodies in view of determination of the tax state of fact, by presenting the facts known by this one, as a whole, according to reality, and by indicating the proving means which he knows.
(2) The taxpayer is to have the obligation to undertake measures in view of obtaining the necessary proving means, by using all the available legal and effective possibilities.
ARTICLE 11
Fiscal secret
(1) The public officers within the tax body, including the persons not having anymore this capacity, are to have the obligation, according to the law, to keep the secret on the information they have following to the exercise of their job attributions.
(2) The information regarding the taxes, fees, contributions and other amounts owed to the general consolidated budget may be transmitted only:
a) to the public authorities, with the aim of fulfilling the obligations provided by the law;
b) to the tax authorities of other countries, in conditions of reciprocity on the basis of certain conventions;
c) to the competent legal authorities, according to the law;
d) in other cases provided by law.
(3) The authority receiving tax information is to have the obligation to keep the secret regarding the information received.
(4) The transmission of fiscal information in other cases than those under par. (2), is to be allowed only after ensuring that no identity of any individual or legal person is thus disclosed.
(41) By derogation from the provisions of par. (4), the cases of inobservance of the fiscal-financial law may be disclosed through mass-media.
(5) Not respecting the obligation of keeping the fiscal secret results in liability according to the law.
ARTICLE 12
Good faith
The relations between the taxpayers and the tax bodies should be founded on good faith, in view of performing the legal requests.
CHAPTER 3
Applying of the fiscal law provisions
ARTICLE 13
Law interpretation
The tax regulation interpretation should respect the legislator will as expressed by the law.
ARTICLE 14
Economic criteria
The revenues, other benefits and property values are to be subject to the fiscal law regardless if they are obtained or not from activities observing or not the requirements of other legal provisions.
ARTICLE 15
Elusion of the fiscal law
(1) If, by eluding the goal of the fiscal law, the tax liability has not been determined or has not been correlated with the real tax basis, the due obligation, and, respectively, the correlative tax receivable are the ones legally determined.
(2) In cases provided in par. (1) are to apply the provisions of art. 23.
CHAPTER 4
Tax legal relation
ARTICLE 16
Content of the tax procedural law relation
The tax procedural law relation contains the rights and obligations of the parties, according to the law, for the fulfillment of the modalities provided for the determination, exercise and extinction of the rights and obligations of the parties from the tax material law relation.
ARTICLE 17
Subjects of the fiscal legal relation
(1) The subjects of the tax legal relation are the State, the territorial-administrative units, the taxpayer, as well as other persons obtaining rights and obligations within this relation.
(2) The taxpayer is any individual or legal person or any other entity without legal personality who owes taxes, fees, contributions, and other amounts to the general consolidated budget, according to the law.
(3) The State is represented by the Ministry of Economy and Finances through the National Agency for Fiscal Administration and its subordinated units with legal personality.
(4) The territorial-administrative units are represented by the local public administration authorities, as well as by their specialty departments, within the limits of their attributions, mandated by the relevant authorities.
(5) The National Agency for Fiscal Administration, its territorial subordinated units as well as the specialized departments of the local public administration authorities are designated in this code as tax bodies.
ARTICLE 18
Empowered parties
(1) The taxpayer may be represented by an empowered person in the relations with fiscal bodies. The content and limits of the representation are the ones contained in the empowerment or established according to the law, as the case may be. The designation of an empowered person shall not stop the taxpayer to personally fulfill his tax obligations, even if he did not revoke the empowerment according to par. (2).
(2) The empowered person is to have the obligation to register at the fiscal body the power of attorney in authenticated form, and under the legal provisions. The revocation of the empowerment becomes effective with the fiscal body as of the registration date of the revocation document.
(3) If the tax payers are represented in relation with the tax bodies by a lawyer, the form and content of the empowerment are the ones referred to by the legal provisions on the lawyer’s job organization and exercise.
(4) The tax payer with no fiscal residence in Romania, who has the obligation of submitting tax declarations to the tax bodies, should designate an empowered person, with tax residence in Romania, which should fulfill, on behalf of and from the taxpayer’s wealth, the taxpayer’s obligations against the tax body.
(5) The provisions of this article are also applicable to the tax representatives designated according to the Fiscal Code, unless otherwise provided by the law.
ARTICLE 19
Tax trustee appointment
(1) If there is no empowered person according to art. 18, the tax body is to request, according to the law, to the competent court to appoint a fiscal trustee for an absent taxpayer whose fiscal domicile is unknown or who, due to illness, infirmity, old age or handicap of any kind cannot personally exercise or fulfill his rights and obligations under the law.
(2) For his activity, the fiscal trustee shall be paid according to the judgment, all the expenditure referring to this representation being in the charge of the person represented.
ARTICLE 20
Duly representatives’ obligations
(1) The duly representative of the natural and legal persons as well as the ones of the associations with no legal personality should fulfill the tax obligations of the represented persons, on behalf of them and from their wealth.
(2) In case, due to any reason, the tax obligations of the associations without legal personality are not fulfilled as provided in par. (1), then partners are to be jointly liable for their fulfillment.
TITLE II
General dispositions concerning the tax material right relation
CHAPTER 1
General provisions
ARTICLE 21
Tax receivables
(1) Tax receivables represent patrimony rights which, according to the law, are generated by the tax material law relations.
(2) Legal fiscal relations provided in par. (1) generate both the content and the amount of tax receivables, representing determined rights consisting of:
a) the right to collect taxes, fees, contributions and other amounts representing revenues to the general consolidated budget, the right to the refunding of the value added tax, the right to the refunding of taxes, fees, contributions and other amounts representing revenues to the general consolidated budget, according to par. (4), hereinafter called main tax receivables;
b) the right of collection of the delay increments, under legal conditions, hereinafter called ancillary tax receivables.
(3) In the cases provided for by the law, the fiscal body is entitled to request to the person having the obligation to fulfill the relevant obligation on behalf of the debtor, to settle the relevant obligation.
(4) To the extent to which it is found out that the payment of the amounts representing taxes, fees, contributions and other revenues to the general consolidated budget was made without legal base, the person who made such a payment is entitled to have that specific amount reimbursed.
ARTICLE 22
Tax obligations
Tax obligations in the meaning of this code, are:
a) the obligation to declare the taxable goods and revenues, or, the taxes, fees, contributions and other amounts due to the general consolidated budget, as the case may be;
b) the obligation to compute and record in the accounting and tax evidences the taxes, fees, contributions and other amounts due to the general consolidated budget;
c) the obligation to pay at the legal deadlines the taxes, fees, contributions and other amounts due to the general consolidated budget;
d) the obligation to pay penalties related to deferred payments of the taxes, fees, contributions and other amounts due to the general consolidated budget, called ancillary tax obligations;
e) the obligation to compute, retain and record in the accounting and payment records, at the legal deadlines, the taxes and contributions which are paid by withholding the them at source;
f) to fulfill any other obligations incumbent on taxpayers, natural or legal persons, following the application of the tax laws.
ARTICLE 23
Origin of tax obligations and receivables
(1) Unless otherwise provided by the law, the right of tax receivable and the correlative tax obligation appear when, according to the law, the tax base generating them is constituted.
(2) According to par. (1) the right of the fiscal body to determine and assess the due tax obligation is to arise.
ARTICLE 24
Settlement of tax receivables
Tax receivables shall be settled by collection, offset, mandatory execution, exemption, cancellation, statute of limitation and by other methods provided by law.
ARTICLE 25
Creditors and debtors
(1) In the relations of material fiscal law, creditors are the persons holding certain rights on tax receivables as provided in art. 21, while debtors are those persons that by law have the related obligation to pay such rights.
(2) In case the debtor failed to satisfy the payment obligation, the following shall become debtors by law:
a) the heir that accepted the succession of the debtor taxpayer;
b) the person that takes over, either fully or partially, the rights and obligations of the debtor subject to division, merger or legal reorganization, as the case may be;
c) the person whose liability was determined according to the legal provisions regarding bankruptcy;
d) the person that takes over the debtor’s payment obligation through a payment commitment or through another act concluded in an authenticated form, ensuring the payment obligation by a proper guarantee;
e) the legal person, for the tax obligations due by its secondary offices;
f) other persons as provided by law.
ARTICLE 26
Payer
(1) Payer of the tax obligation shall be the debtor or the person who, on behalf of the debtor, by law, has the obligation to pay or withhold and pay, as the case may be, taxes, fees, contributions and other amounts owed to the general consolidated budget.
(2) For legal persons with location in Romania, that have secondary offices, the payer of tax obligations shall be the legal person, except for the tax on salary income, for which the tax payment is made by law, by the secondary offices of the legal person.
ARTICLE 27
Joint liability
(1) For outstanding payment obligations of the debtor that was declared insolvent under the conditions of this Code, the following persons shall be jointly liable with such debtor:
a) individuals or legal persons that, during the 3 year period prior to the date of the declaration of insolvency, in bad faith, acquired goods, by any means, from debtors that, in this manner, caused their insolvency;
b) administrators, associates, shareholders and any other persons that caused insolvency of the debtor legal person by alienating of, or by hiding in bad faith, in any manner, movable or immovable goods property of the debtor.
(2) The legal person shall be jointly liable with the debtor declared insolvent under this code or declared insolvent if, directly or indirectly controls, is controlled or is under joint control with the debtor, if actually carries out the same activity or the same activities as the debtor and if at least one of the following conditions is met:
a) it acquires, with any title, the right of ownership on tangible assets of the debtor and the accounting value of these assets represents at least half from the net accounting value of all tangible assets of the acquirer;
b) it has commercial contractual relationships with customers and/or suppliers other than those for utilities, at least half of them having had or having contractual relationships with the debtor;
c) it has work or civil relations of provision of services with at least half from the debtor’s employees or service providers.
(3) For purposes of par. (2), the following terms and expressions shall have the following meaning:
a) control – a majority of voting rights, either in a general meeting of the associates of a trading company or of an association or foundation, or in the board of administration of a trading company or in the board of directors of an association or foundation;
b) indirect control – activity through which a person exercises control through one or more persons.
ARTICLE 28
Special provisions regarding determination of liability
(1) Persons’ liability provided in art. 27 shall be established according to the provisions of this article.
(2) For the purpose provided in par. (1), the fiscal body is to prepare a decision to include the reasons de facto and de jure for which the liability of the person in question is engaged. This decision shall be submitted to the fiscal body management in order to be approved.
(3) The decision approved according to par. (2) is to be a tax receivable title regarding the payment obligation of the person responsible according to art. 27 and is to include, besides the elements provided in art. 43 par. (2), also the following:
a) the tax identification code of the responsible person having the obligation to pay the debtor main tax obligation, as well as any other identification data;
b) the main debtor’s surname and forename or denomination; the tax identification code; the residence or location of this one, as well as any other identification data;
c) the quantum and the nature of the amounts due;
d) the deadline within which the liable person should pay the obligation of the main debtor;
e) the legal grounds and actual reasons for the commitment of liability.
(4) The liability shall be determined both for the main tax obligation and for its ancillary tax obligations.
(5) The receivable title provided in par. (3) shall be communicated to the person having the obligation to pay it, being specified that such person is to make the payment at the determined deadline.
(6) The receivable title communicated according to par. (5) may be contested according to the legal provisions.
ARTICLE 29
Rights and obligations of successors
(1) Rights and obligations derived from the tax legal relation shall be taken over by the successors of the debtor, under the conditions of common law.
(2) Provisions in par. (1) are not to apply in the case of payment obligation of the amounts representing fines applied to the debtor that is an individual, by law.
ARTICLE 30
Provisions regarding the transfer of taxpayers’ tax receivables
(1) Main or ancillary tax receivables regarding taxpayers’ reimbursement or refund rights, as well as amounts intended for the guarantee of the execution of a tax obligation can be transferred only after their assessment by law.
(2) The transfer shall become effective for the competent tax body only as of the date when such body was notified on the transfer.
(3) The cancellation of the transfer or the ascertainment of its severance subsequent to the settlement of the tax obligation is not to be opposable to the tax body.
CHAPTER 2
Tax domicile
ARTICLE 31
Tax domicile
(1) In the case of tax receivables administered by the Ministry of Economy and Public Finances through the National Agency for Fiscal Administration, tax domicile shall have the following meanings:
a) for individuals, the address of domicile, by law, or the address where they actually live, if such address differs from the domicile one;
b) for legal persons independently developing economic activities or exercising liberal professions, the registered office or the office where the main activity develops effectively;
c) for legal persons, the registered office or the office where the administrative management and business management develop effectively, if they are not performed in the declared registered office;
d) for associations and other entities without legal personality, their registered offices or offices where they actually carry out the main activity.
(2) The address where they actually live means, to the purpose of par. (1) letter a), the address of the residence that a person uses on a continuous basis for more than 183 days in a calendar year, short-term interruptions being neglected. If the purpose of the stay is exclusively a visit, a leave, a treatment or other similar personal purposes and does not exceed a one-year period, such residence is not to be considered the address where such person actually lives.
(3) In case the fiscal domicile cannot be determined based on par. (1) letters c) and d), the fiscal domicile is to be the place where the majority of the assets are located.
(4) In the case of other tax receivables to the general consolidated budget, the tax domicile shall be considered the domicile regulated upon according to common law or the registered office by law.
TITLE III
General procedural provisions
CHAPTER 1
Competence of the fiscal body
ARTICLE 32
General competence
(1) Fiscal bodies have a general competence as regards the administration of tax receivables, carrying out of the audit and the issuance of norms foe the application of the legal provisions on tax matters.
(2) In case of income tax, an additional special administration competence can be established by a Government decision.
(3) Taxes, fees and other amounts payable in customs by law shall be administered by the customs bodies.
(4) Assistance and guidance of taxpayers concerning the uniform application of the legal provisions concerning the taxes, fees, contributions and other amounts due to the budget, administered by the National Agency for Fiscal Administration shall be performed by this Agency and its subordinated units according to the procedures established by order of the President of the National Agency for Fiscal Administration.
ARTICLE 33
Territorial competence
(1) For the administration of taxes, fees, contributions and other amounts owed to the general consolidated budget, the competence shall stay with the county, local or Bucharest fiscal body established by order of the President of the National Agency for Fiscal Administration, within whose territorial jurisdiction the tax domicile of the taxpayer or the revenue payer, in case of taxes and contributions withheld at source according to the law, is located.
(2) In case of non-resident taxpayers that carry out activities within the territory of Romania through one or more permanent offices, the competence shall stay with the fiscal body within whose jurisdiction each of the permanent offices is located. In case the activity of a permanent office deploys under the territorial jurisdiction of more than one fiscal body, the competent shall stay with that fiscal body under which territorial jurisdiction the relevant permanent office begins its activity.
(3) The competence for the administration of tax receivables payable by large taxpayers, including by their secondary offices, by the fiscal bodies subordinated to the National Agency for Fiscal Administration may be determined in charge of fiscal bodies other than those provided in par. (1), by order of the President of the National Agency for Fiscal Administration.
ARTICLE 34
Competence in case of secondary offices
In case the taxpayer has by law payment obligations for secondary offices, then the territorial competence for the administration thereof shall stay with the fiscal body within whose territorial jurisdiction such secondary offices are located.
ARTICLE 35
Territorial competence of specialist departments of the local public administration authorities
Specialist departments of the local public administration authorities shall be competent for the administration of taxes, fees and other amounts owed to local budgets of territorial-administrative units.
ARTICLE 36
Special competence
(1) In case the taxpayer has no tax domicile, the territorial competence shall stay with the fiscal body within whose jurisdiction the act or fact that is subject to legal tax provisions is ascertained.
(2) Provisions in par. (1) are also to apply to legal emergency measures required in cases of disappearance of identification elements of the actual taxation base, as well as in case of forced execution.
(3) For administration by the fiscal bodies subordinated to the National Agency for Fiscal Administration of the tax receivables owed by non-resident taxpayers who do not have in Romania a permanent office, the jurisdiction lies with the fiscal body established by the Order of the Minister of Economy and Finance, upon the proposal of the President of the National Agency for Fiscal Administration.
ARTICLE 37
Conflict of competence
(1) A conflict of competence is when two or more fiscal bodies declare that they are all of them either competent or incompetent. In this case, the fiscal body that vested itself competent the first or declared itself incompetent the last is to continue the undergoing procedure and is to apply to the common higher hierarchical body to decide on the conflict.
(2) In case the fiscal bodies between which the conflict of competence occurs are not subordinated to a common higher hierarchical body, the conflict of competence arisen shall be solved by the Central Fiscal Committee within the Ministry of Economy and Finance.
(3) In the case of local budgets, the Central Fiscal Committee shall be completed by a representative of the Association of Communes in Romania, the Association of Towns in Romania, the Association of Municipalities in Romania, the National Union of County Councils in Romania and the Ministry of Interior and Administrative Reform.
ARTICLE 38
Agreement on competence
Upon the approval of the fiscal body that according to this Code holds the territorial competence, as well as upon the approval of the taxpayer in question, another fiscal body may take over the activity of administration of such taxpayer.
ARTICLE 39
Conflict of interest
The civil servant within the fiscal body involved in a tax administration procedure is in a conflict of interest if:
a) within such procedure, such civil servant is a taxpayer, a spouse of a taxpayer, a relative up to the third degree inclusively of the taxpayer, or is a representative of an empowered person of such taxpayer;
b) within such procedure the civil servant may acquire a benefit or suffer a direct disadvantage;
c) there is a conflict between the civil servant, his/her spouse, relatives up to the 3rd degree inclusively, by one hand and one of the parties or the spouse, relatives of the party up to the 3rd degree inclusively, by the other hand;
d) in other cases provided by law.
ARTICLE 40
Abstention and challenge
(1) The civil servant that is aware being in one of the cases provided in art. 39 shall have the obligation to inform the head of the fiscal body and to refrain from carrying out the procedure.
(2) Where conflict of interest concerns the head of the fiscal body, it shall have the obligation to notify the hierarchically higher body.
(3) Abstention shall be proposed by the public officer and shall be decided immediately by the head of the fiscal body or by the hierarchically higher body.
(4) The taxpayer involved in the ongoing procedure may ask the challenge of the public officer in conflict of interest.
(5) The challenge of the public officer is to be immediately decided upon by the head of the fiscal body or by the higher hierarchical body. The decision to reject the request of challenge may be appealed to the competent court. The application for challenge does not suspend the administrative procedure in progress.
CHAPTER 2
Documents issued by the fiscal bodies
ARTICLE 41
Concept of tax administration document
For the purposes of this Code, the Tax Administration Document is issued by the fiscal body competent in applying of the law concerning the establishment, modification or extinguishing of the tax rights and obligations.
ARTICLE 42
Anticipated individualized tax solution and Advance pricing agreement
(1) The anticipated individualized tax solution is the administrative document issued by the National Agency for Fiscal Administration in order to solve a request from the taxpayer concerning the regulation of future tax state of facts.
(2) The advance pricing agreement is an administrative document issued by the National Agency for Fiscal Administration in order to solve a request of the taxpayer concerning the establishment of the conditions and methods for the determination, during a determined period of time, of the transfer prices for transactions between affiliates, as defined in the Fiscal Code.
(3) The anticipated individualized tax solution or the advance pricing agreement shall be communicated only to the taxpayer for whom they are intended.
(4) The anticipated individualized tax solution and the advance pricing agreement are binding and enforceable against the issuing fiscal bodies only provided that their terms and conditions have been observed by the taxpayer.
(5) The taxpayer shall propose the contents of the anticipated individualized tax solution or of the advance pricing agreement, as may be the case, by submitting an application in this regard.
(6) The solution for the taxpayer’s application shall represent the anticipated individualized tax solution or the advance pricing agreement. In case the taxpayer does not agree to the issued anticipated individualized tax solution or advance pricing agreement, he/she shall notify the issuing fiscal body, in writing, in term of 15 days from the relevant document receipt date. The anticipated individualized tax solution or the advance pricing agreement in relation to which the taxpayer has notified the issuing fiscal body shall have no legal effect.
(7) The taxpayer, titular of an advance pricing agreement, shall have the obligation to submit an annual report regarding the manner in which has observed the terms and conditions of the agreement during the fiscal year, to the issuing fiscal body. The report shall be submitted by the deadline provided by law for the submission of the annual financial statements.
(8) The anticipated individualized tax solution and the advance pricing agreement shall be no longer valid if the legal provisions of the tax material law on which basis the decision has been taken, are modified.
(9) The issuing of an anticipated individualized tax solution, as well as the issuing or change of an advance pricing agreement are subject to fees cashed by the issuer and established by Government Decision.
(10) The applicant taxpayer shall be entitled to a refund of the tariff paid in case the competent fiscal body repelled the issuing/change of the anticipated individualized tax solution or of the advance pricing agreement or in case the issuing procedures are interrupted, under circumstances approved by Government Decision.
(11) The deadline for issuing the advance pricing agreement shall be of 12 months for unilateral advance pricing agreements and of 18 months for bilateral or multilateral advance pricing agreements, as the case may be. The deadline for issuing of the anticipated individualized tax solution shall be of 45 days. Provisions of art. 70 are to apply correspondingly.
(12) The issuing procedure for the anticipated individualized tax solution and the advance pricing agreement shall be approved by Government Decision.
ARTICLE 43
Content and grounding of the tax administrative document
(1) The tax administrative document shall be issued only in writing.
(2) The tax administrative document shall include the following elements:
a) designation of the issuing fiscal body;
b) the date of issuance and the date when it becomes effective;
c) identification data for the taxpayer or the person empowered by the taxpayer, as the case may be;
d) the object of the tax administrative document;
e) de facto reasons;
f) legal grounds;
g) the name and the signature of the persons empowered by the fiscal body, by law;
h) the stamp of the issuing fiscal body;
i) the possibility of appeal, the appeal submission deadline and the fiscal body where the appeal shall be submitted;
j) specifications concerning the hearing of the taxpayer.
(3) The fiscal administrative document issued under par. (2) through information technology means is to be still valid, even if it does not bear the signature of empowered persons of the fiscal body as per law or the stamp of the issuing body, provide that it met the legal requirements applicable on such matters.
(4) The categories of tax administrative documents to be issued under the provisions of paragraph (3) shall be established by an order of the Minister for Economy and Finances.
ARTICLE 44
Communication of the tax administrative document
(1) The tax administrative document should be communicated to the taxpayer to whom it is intended. In case of taxpayers without fiscal domicile in Romania, who appointed their empowered persons according to art. 18 par. (4), and in case of appointment of a fiscal trustee under art. 19, the tax administrative document shall be communicated to the relevant empowered person or fiscal trustee, as the case may be.
(2) The tax administrative document shall be communicated as follows:
a) by the presence of the taxpayer at the offices of the issuing fiscal body and the receipt of the tax administrative document by him/herself against signature, in which case the date of communication is the date on which the document is handed over against signature;
b) by remittance of the tax administrative document against signature by the persons authorized according to the law by the fiscal body, in which case the date of communication is the date of remittance against signature of the document;
c) by mail, using registered letter with confirmation of receipt, sent to the fiscal domicile of the taxpayer, as well as by other means such as facsimile, e-mail, provided that the transmission of the text of the tax administrative document and the confirmation of its receipt are ensured;
d) by advertising.
(3) Communication by advertising shall be carried out by means of posting a notice mentioning the fact that the tax administrative document has been issued to the taxpayer, both at the offices of the issuing fiscal body and on the website of the National Agency for Fiscal Administration. In case of tax administrative documents issued by the fiscal bodies provided in art. 35, posting shall be performed simultaneously on their offices and on the homepage of the relevant local public administration authority. In case the local public administration authority does not own a website, the information shall be posted on the website of the county council. In all the above cases, it is considered that the tax administrative document has been communicated in 15 days from the date of posting of the notice.
(4) The provisions of the Civil Procedure Code regarding the communication of procedural documents shall be adequately applied.
ARTICLE 45
Binding of the tax administrative document
The tax administrative document shall become effective as of the moment when it is communicated to the taxpayer or on a subsequent date, as mentioned in the communicated administrative document, under the law.
ARTICLE 46
Nullity of the tax administrative document
The lack of any of the elements of the tax administrative document referring to the surname, forename and capacity of the empowered person of the fiscal body, to the taxpayer’s surname and forename or designation, to the subject of the tax administrative document or to the signature of the empowered person of the fiscal body, with the exception provided by art. 43 par. (3) is to trigger such tax administrative act nullity. Nullity may be ascertained upon request or ex officio.
ARTICLE 47
Cancellation or modification of tax administrative documents
(1) The tax administrative document may be modified or cancelled in accordance with the provisions of this Code.
(2) The total or partial cancellation, by law, of the tax administrative documents by which main tax receivables have been established, shall lead the total or partial cancellation of the tax administrative documents by which have been established the ancillary tax receivables related to the cancelled main tax receivables.
ARTICLE 48
Correction of material errors
The fiscal body may correct material errors in the tax administrative document ex officio or upon the taxpayer’s request. The corrected tax administrative document is to be communicated to the taxpayer, by law.
CHAPTER 3
Administration and assessment of evidence
SECTION 1
General provisions
ARTICLE 49
Means of evidence
(1) In order to determine the tax state of fact, the fiscal body manages means of evidence under the law and may resort to the following:
a) requesting of information of any kind from the taxpayer and from third parties;
b) requesting of expert’s reports;
c) the use of writs;
d) carrying out of on-site investigations.
(2) The evidence administered shall be corroborated and assessed by taking into account their proving force as recognized by the law.
ARTICLE 50
The right of the fiscal body to request the taxpayer’s presence at its registered office
The fiscal body may request the taxpayer’s presence at its registered office in order to provide information and clarifications necessary for the determination of his/her actual tax state of fact. The request shall be accompanied when necessary by a list of documents, drafted by the fiscal body, to be presented mandatory by the taxpayer.
ARTICLE 51
Communication of information among fiscal bodies
If during a certain fiscal procedure, facts that may be relevant to other fiscal legal relations are ascertained, the fiscal bodies shall communicate to each other the information they possess.
SECTION 2
Information and expert’s reports
ARTICLE 52
Obligation to provide information
(1) The taxpayer or other person empowered by this one shall have the obligation to provide the fiscal body with information as necessary for the determination of the tax state of fact. In the same purpose, the fiscal body shall have the right to request information also to other persons with whom the taxpayer had or have economic or legal relations. Information provided by other persons are to be taken into account only to the extent that they are also confirmed by other means of evidence.
(2) The application for information shall be presented in writing and it shall also specify the nature of the information requested to determine the tax state of fact, as well as a list of documents required to support the information provided.
(3) The declaration of persons having the obligation, according to par. (1) to provide information, is to be done either orally or in writing, as the case may be.
(4) In case the person compelled to provide information in writing is unable to write for reasons independent of his/her will, the fiscal body shall draw up a report in this regard.
ARTICLE 53
Periodically providing of information
(1) Taxpayers are to have the obligation to provide the fiscal bodies periodically with information regarding their activities.
(2) Providing of information set forth in par. (1) shall be made by filling in of a declaration on own liability.
(3) The nature of information to be provided, the periods when it shall be provided, as well as the model for statutory declarations shall be established by order of the President of the National Agency for Fiscal Administration.
ARTICLE 54
Obligation of banks to provide information
(1) Banks are required to communicate to fiscal bodies the list of individuals, legal persons or any other entities without legal personality that open or close accounts, such persons’ legal status and domicile or registered office. The information shall be provided twice a month, concerning the accounts opened or closed during the period prior to the communication, to the Ministry of Economy and Finance.
(2) The Ministry of Economy and Finance together with the National Bank of Romania shall prepare the procedures regarding the transmission of information under paragraph (1).
(3) Upon the justified request of central and local public authorities, the Ministry of Economy and Finance is to transmit to such authorities information held, on the basis of par. (1), to the purpose of the achievement by those authorities of their responsibilities by law.
ARTICLE 55
Expert’s report
(1) Whenever deemed necessary, the fiscal body has the right to resort to services of an expert in order to prepare an expert report. The fiscal body shall have the obligation to communicate the expert’s name to the taxpayer.
(2) The taxpayer may appoint an expert at his/her own expense.
(3) Experts are obliged to keep the fiscal secret concerning the data and information that they acquire.
(4) Expert reports shall be made in writing.
(5) Fees charged for the expert studies carried out under the provisions of this article shall be paid from the budgets of the tax authorities that requested the expert’s services, as the case may be.
SECTION 3
Verification of writs and on-site investigations
ARTICLE 56
Producing writs
(1) For the determination of the tax state of fact, taxpayers are to make available to the fiscal body registers, records, business documents, and any other writs. In the same purpose, the fiscal body shall have the right to request writs also to other persons with whom the taxpayer had or have economic or legal relations.
(2) The tax authority may request that writs be made available at their office or at the fiscal domicile of the person obliged to present such writs.
(3) The fiscal body has the right to keep, for the purpose of protection against disposal or destruction, documents, acts, written documents, registers and financial-accounting documents or any material element that proves the assessment, record and payment of tax obligations by the taxpayer, for a period of maximum 30 days. In exceptional cases, with the approval of the fiscal body, the period of keeping such documents may be prolonged by maximum 90 days.
ARTICLE 57
On-site investigation
(1) The fiscal body may carry out an on-site investigation under the provisions of the law, and it shall make a report in this respect.
(2) Taxpayers shall have the obligation to allow the officers empowered by the fiscal body to carry out an on-site investigation and the experts employed in such actions to access on the lands, rooms and any other premises, to the extent that this is deemed necessary in order to ascertain tax related facts.
(3) Owners of such lands or premises are to be informed in due time about the investigation, except for cases provided in art. 97 par. (1) letter b). Individuals are to be informed of their right to refuse access to their domicile or residence.
(4) In case of denial of this access, the access to the domicile or residence of the individual shall take place with a warrant issued by the competent court, and in such cases the provisions in the presidential ordinance in the Civil Procedure Code apply.
(5) Upon request of the fiscal body, the police, military police and other public order forces shall have the obligation to provide support for the enforcement of the provisions in this article.
Disclaimer: This content is provided for general informational purposes only and does not constitute legal advice.
Government Emergency Ordinance No. 117/2010 amending and supplementing Law no. 571/2003 on the Fiscal Code and regulating certain fiscal-financial measures
GOVERNMENT EMERGENCY ORDINANCE no. 117 from 23 December 2010
for the amendment and completion of the Law no 571/2003 on the Fiscal Code and for regulating some financial and fiscal measures
Text in force starting from 22 November 2013
Basic document
#B: The Government Ordinance number 117/2010
Modifying documents
#M1: Law number 303/2013
The amendments and completions performed by the modifying document are written with italic font. In front of every amendment or completion it is specified the respective enactment or completion, under the form #M1.
#CIN
NOTE:
The Government Ordinance number 117/2010 has been approved with the completions through Law no.303/2013 (#MI).
#B
In order to comply with the commitments undertaken by the Government of Romania, by enforcing the measure to abrogate the minimum tax system and in compliance with the lines of action of the Governing Programme 2009-2012, which aims to simply the legislative frame and the enforcement the new policies frame of the European Committee on the field of small and medium enterprises, it is imposed to implement a simplified tax system of the micro enterprises.
Considering the need to ensure a non-discriminatory treatment between the resident and non-resident legal entities on imposing the incomes from dividends, and also to maintain on 2011 the limit for the deduction of expenditure on fuel, in some cases, to the calculation of the tax basis for the corporate tax, and for the income tax,
as it is imposed to revise the actual system regarding the income taxation earned by individuals in basis of the income regulations, in order to answer the demands on the efficient administering of the fiscal system,
considering the need to improve the administering of the tax income, owed by individuals,
in order to eliminate some technical difficulties occurred on enforcing the tax provisions,
considering the obligation to pass and publish until 1 January 2011, the laws on transposing into national legislation:
- the DIRECTIVE 2009/162/EU of the Council, from 22 December 2009 for amending some provisions of the Directive 2006/112/EC on the common system of the value added tax;
- the provisions of art 3 from the Directive 2008/8/EC of the Council, from 12 February 2008, for amending the Directive 2006/112/EC, on the place for providing the services;
- the Directive 2010/12/EU of the Council, from 16 February 2010, for amending the Directives 92/79/EEC, 92/80/EEC, 95/59/EC, on the structure and levels of the excises applied to the processed tobacco and of the Directive 2008/118/EC,
considering, also, the obligation of the state member to notify without delay to the European Committee the texts of the enactments, together with the tables of compliance, towards the provisions of the new Directive on the VAT and the regime of excises for the processed tobacco
considering also the need for continuous improvement, of the fiscal legislation, the current economic circumstance, the main features of the Romanian budget policy for the next period, which shall be subordinated to the supporting objectives of the economic growth, and also the need to promote some amendments as a consequence of the demands from the business environment,
considering the fact that, according to the Directive 2010/23/EU of the Council, from 16 March 2010, for amending the Directive 2006/112/EC on the common system of the value added tax, regarding the optional and temporary enforcement of reverse charge mechanism, for providing some services, which represents fraud risk, the state members can enforce until 30 June 2015 and for a minimum period of two years the reverse charge for the transfer of certificates for greenhouse gases emissions, as they are defined by article 3, from the Directive 2003/87/EC, of the European Parliament, and of the Council, from 13 October 2003, to establish a marketing system of the quotas of greenhouse gases emissions, within the Community, and to modify the Directive 96/61/EC, of the Council, transferable in compliance with art 12, from the Directive, and also for the transfer of other units that can be used by operators in compliance with the same Directive,
considering the significance of acquiring some data, imperatively necessary to calculate the VAT basis for the own community resources,
considering the fact that the parliamentary procedures for passing some laws do not allow the passing in due time, as a draft law, the transposing of the European directives,
considering the fact that the non passing and non publishing until 31 December 2010, of the laws, regarding the transposing into national legislation, of the Directives specified lead to:
- the triggering of the infringement procedure by the European Committee against Romania for non transposing within the legal term of the provisions of the fiscal Directives, effective from 1 January 2011;
- the impossibility for the economic operators to fulfill the obligations which result from the new legal provisions, as a consequence of amending the community directives;
- the impossibility to prepare in due time the secondary legislation, with negative consequences over the business environment, regarding the financial management and the business plan;
being given the context in which it is necessary, on one hand, implementing some measures to extend the calculation basis for the social contributions, and improving the collection through the stoppage-at-source method, including over some incomes such as the ones resulted from copyrights, and agreements/ civil conventions, and, on the other hand, the linking of the social insurance benefits to the amounts paid by the contributors for the mandatory social insurances, in compliance with the principle of social solidarity
considering the need to enforce the sole statement for the tax income and the social contributions starting with the fiscal year 2011,
in basis of art 115, para (4) from the Romanian Constitution, republished,
The Government of Romania passes this Emergency Ordinance.
ART I
Law number 571/2003 on the Fiscal Code, republished, in the Official Romanian Gazzette, Part I, number 927, from 23 December, 2003 with the subsequent additions and completions, shall be amended and completed as it follows:
- Art 1, para(1) shall be modified and shall have the following content:
“ART 1
(1) This code establishes the legal frame for the taxes, fees and mandatory social contributions provided on art 2, which represent incomes to the state budget, local budget, state social insurance budget, the National Fund budget for health insurance, the unemployment insurance fund and guarantee fund for the payment of the incomes receivables, specify the contributors who have the obligation to pay these taxes, fees and social contributions, and also the manner for calculating and paying them. This Code includes the procedure for amending these taxes, fees and social contributions. Also, it is certified by the Ministry of Public Finances to prepare methodological regulations, instructions and orders, in enforcing this Code, and of the conventions to evade the double taxation”.
(2) Art 2 shall be modified and shall have the following content:
“ART 2
The taxes, fees and social contributions regulated by the Fiscal Code
(1) The taxes and fees regulated by this Code are the following:
a) corporate tax;
b) income tax;
c) micro enterprises’ income tax;
d) tax on income earned by non-residents in Romania;
e) tax on agencies;
f) value added tax;
g) excises;
h) local taxes and fees.
(2) The social contributions regulated by this Code are the following:
a) the individual contribution of social insurances and the contribution owed by the employer to the state budget of social insurances;
b) the individual contribution for the social health insurances and the contribution owed by the employer to the budget of the Unique National Fund of health insurances;
c) the contributions for holidays, health insurance benefits, owed by the employer to the budget of the Unique National Fund of health insurances;
d) the individual contribution to the Unemployment Insurance Fund and the contribution owed by the employer to the Unemployment Insurance Fund;
e) the insurance contribution for work accidents and occupational diseases, owed by the employer to the state social insurances budget;
f) the contribution to the Guarantee Fund for the payment of the wage receivables owed by the individuals and legal entities who have the position of employers according to Law 200/2006, on constituting and using the Guarantee Fund for the payment of the wage receivables with the subsequent additions and completions.”
(3) On art 7 para (1), after point 5, a new point is introduced, point 5^1, with the following content:
“5^1. central fiscal authority – Ministry of Public Finances, institution which aims to coordinate the unitary enforcement of the provisions of fiscal legislation;”.
(4) On art 11, para (1^1) and (1^2), shall be modified and shall have the following content:
“(1^1) The fiscal authorities shall not consider a transaction performed by a contributor, stated as inactive, through order of the president of National Agency of Fiscal Administration, except the deliveries of goods performed within the procedure of forced execution.
(1^2) Also, there shall not be considered by the fiscal authorities the transactions performed with a contributor stated as inactive through order of the president of National Agency of Fiscal Administration, except the procurements of goods performed within the procedure of forced execution. The procedure of certifying the inactive contributors shall be established through order of the president of National Agency of Fiscal Administration. The order and the list of the inactive contributors shall be notified to the respective contributors and to the interested parties, by posting them on the webpage of the Agency for Fiscal Administration”.
(5) On art 15, para (1), after letter b) there shall be introduced a new letter, b^1), with the following content:
“b^1) the Romanian legal entities who pay tax on the microenterprises’ incomes, in compliance with the provisions included in title IV^1;”.
- The art 21, para (4), letter t) shall be modified and shall have the following content:
“t) in the period 1 January 2011 – 31 December 2011 inclusive, the expenditures on fuel for road vehicles that are intended exclusively for road passenger transport, with a maximum authorized weight that shall not exceed 3500 kg and which have no more than 9 seats, including the chair of the driver, owned or used by the taxpayer, unless the vehicles are registered in any of the following categories:
- vehicles used exclusively for intervention, repair, security and protection, courier, staff transport to and from the place of performing the activity, and also vehicles specially adapted for use as reportage carts, used by sales agents and agents for labor recruitment;
- vehicles used for the transport of persons, with payment, including taxi activities;
- vehicles used for rental to others, including for developing training activities at the drivers’ schools.”
- Article 34 para (18) shall be modified as it follows:
“(18) Fiscal loss recorded during the two periods related to 2010 is recovered according to Art. 26, period 1 October to 31 December 2010, being considered fiscal year in terms of the 7 consecutive years.”
- Article 36, para (4) shall be modified and shall have the following content:
“(4) The provisions of this article shall not apply to dividends paid by a Romanian legal entity to another Romanian legal entity if the beneficiary of the dividends owns, at the date of dividends’ payment, minimum 10% of the equity investments of the other legal entity, for a period of 2 years fulfilled until the date of their payment thereof.”
- Article 36, after paragraph (4) there shall be introduced a new paragraph (4^1), as it follows:
“(4^1) The provisions of this article shall not apply to dividends distributed / paid by a Romanian legal entity:
a) voluntary pension funds, namely private pension funds;
b) the entities of the public administration which exercise, by law, rights and obligations that result from the position of state shareholder to those Romanian legal entities.”
- Article 41, letter i) shall be changed as it follows:
“i) incomes from other sources, as defined by art. 78 and 79^1.”
- Article 42, letter e) shall be abrogated.
- Article 48, para (7), letter 1^1) shall be changed as it follows:
“1^1) in the period 1 January 2011 – 31 December 2011 inclusive, the expenditures on fuel for road powered vehicles that are intended exclusively for road passenger transport, with a maximum authorized weight that shall not exceed 3500 kg, and which have no more than 9 seats, including the driver seat, unless the vehicles are registered in any of the following categories:
- vehicles used exclusively for intervention, repair, security and protection, courier, staff transport to and from the place of performing the activity, and the vehicles specially adapted for use as reportage carts, the vehicles used by sales agents and agents for labor recruitment;
- vehicles used for the transport of persons, with payment, including taxi activities;
- vehicles used for rental to others, including for developing training activities at the drivers’ schools”
- The title of Article 49 is modified as it follows:
“Establishing the annual net income based on the income standards”
- Article 49 para (1), (2^1), (3), (4), (5) and (6) shall be changed as it follows:
“Art. 49
(1) In case of taxpayers with commercial incomes defined by art. 46 para. (2), the annual net income is determined based on the income standards from the place of performing the activity.
(2^1) The standard income for each activity independent developed by the taxpayer which generates commercial income can not be less than the national minimum basic gross salary guaranteed for payment, in force at the time of its establishment, multiplied by 12. The provisions of this paragraph shall apply also if the activities are developed within an association without legal personality, the standard income being established for each associated member.
(3) For determining the annual standard incomes, the income limit determined by multiplying by 12 of the national minimum gross salary guaranteed for payment is the annual net income before applying the criteria. The criteria for determining the standard incomes by the general directorates of the territorial public finances and of the Bucharest Municipality shall be the ones provided by the metholodological regulations.
(4) Where a taxpayer develops an independent activity that generates commercial revenues, for periods less than a calendar year, the standard income concerning those activity shall be corrected as to reflect the period of the calendar year in which the respective activity has been developed.
(5) If a taxpayer develops two or more activities that generate commercial revenues, the net income from these activities is established by cumulating the standard incomes level appropriate to each activity.
(6) Where a taxpayer develops an activity described by para (2) and another independent activity, the annual net income is determined based on the single-entry bookkeeping, according to art. 48.”
- On Article 52 para (1), after letter e) there shall be inserted a new letter e^1), as it follows:
“e^1) the income earned by an individual from an association with a legal entity taxpayer under Title IV^1, which does not generate a legal entity;”.
- On Article 52 para (2) after letter a) there shall be inserted a new letter, a^1), as it follows:
“a^1) in case of incomes provided by para. (1) e^1), applying the tax rate provided for micro enterprises’ income tax to the revenue accruing to the individual from association;”.
- Article 52 para (3) shall be modified as it follows:
“(3) tax to be withheld is transferred to the state budget until 25th inclusive of the following month to the one in which the income was paid, except for the income tax provided by par. (1) e^1), for which the steering period is regulated by title IV^1.”
- Article 52, paragraph (4) shall be abrogated.
- After Article 52 there shall be inserted a new article 52^1, as it follows:
“Art. 52^1
The option for setting the final tax for certain incomes from independent activities
(1) Taxpayers that earn incomes from the activities mentioned in art. 52 para. (1) a) – e) may choose to establish the income tax as a final tax. The option for the gross income tax is exercised in writing when concluding each legal relationship / contract and is applicable to the revenues earned, as a consequence of the activity developed on that basis.
(2) The income tax is calculated by withholding at the time of paying the revenues by the incomes payers by applying the rate of 16% on the gross income.
(3) The tax calculated and withheld represents final tax.
(4) The tax withheld therein shall be transferred to the state budget until the 25th inclusive of the following month to the one in which he was detained.”
- Article 53 is modified as it follows:
“Art. 53
Prepayments of the income tax from independent activities
Taxpayers who earn incomes from independent activities are obliged to make prepayments on the account of the annual tax due to the state budget, according to art. 82, except for the incomes specified by Art. 52, for which the advance payment is made by withholding or for which the tax is final according to art. 52^1.”
- Article 66 (5^1) shall be modified as it follows:
“(5^1) The annual net profit / net annual loss from trading securities, other than shares and the real assets in case of closed companies, are determined as difference between the gains and losses recorded during the respective fiscal year cumulated from the beginning of the year, and is equal to the net profit determined / net loss determined by the end of the fourth quarter of the fiscal year. The annual net profit / annual net loss is determined by the taxpayer, based on the income statement filed pursuant to Art. 83.”
- Article 66 para (7) i will be modified as it follows:
“(7) The revenues obtained as profits from operations of purchasing foreign currency on term in basis of contracts based, and any other such operations represent the favorable exchange differences resulting from these operations, on the moment of concluding the operation and emphasizing the client’s account. The net annual profit shall be determined as the difference between the profits and losses recorded during that year from such operations. The annual net profit is determined by the taxpayer on the income statement, filed according to Art. 83. For the transactions from the fiscal year, each intermediate or income tax payer, by case has the following obligations:
a) calculating the annual profit / annual loss for the transactions performed during that year for each taxpayer;
b) sending information regarding the annual profit / annual loss, and the tax calculated and withhold as prepayment in writing by him, until the last day of February of the following year to which the calculation is made.”
Disclaimer: This content is provided for general informational purposes only and does not constitute legal advice.
Law no. 411/2004 on Privately Administered Pension Funds
ROMANIAN PRIVATE PENSION SUPERVISORY COMMISSION
NOTE: This material is in no way to be considered legally binding. The only legally binding text is the one published in the Romanian Official Gazette.
The amendments and changes brought to Law no.411/2004 by the Govern Emergency Ordinance no. 50/2005 and by Law no.23/2007 were inserted into the original text by the Commission’s staff.
Law no. 411/2004
on
Privately Administered Pension Funds
as modified and amended by the Govern Emergency Ordinance no. 50/2005 and by Law no.23/2007
Chapter I
General Provisions
Art.1
(1) The present law regulates:
a) The principles of establishing, organization and functioning of privately administrated pension funds;
b) The principles of organization and functioning of privately administrated pension funds’ administrators, as well as the coordination of activity carried out by other entities involved in this area;
(2) The goal of the privately administrated pension fund system is to provide a private pension, aside and supplementary to the pension provided by the public system pension, on the basis of collecting and investing, for the participants, a percentage of the individual contribution to the social insurance.
Art.2
(1) In terms of present law, the terms and expressions below bear the following meaning:
the assets of a privately administrated pension fund represent financial instruments, including derived financial instruments, as well as ready cash, resulting from the investment of participants’ personal assets;
the personal assets represents the amount collected in a participant’s account, equal with the number of units of fund owned by the concerned participant multiplied with the daily updated value of a unit of fund;
the total net assets of the privately administrated pension fund valid on a certain date represent the value resulted after deducting the value of fund’s liabilities from the value of fund’s assets on the same date;
the individual subscription act represents an agreement concluded in written form between the natural person and administrator and comprises the person’s agreement to become a part of the civil company contract, as well as of the pension scheme’s prospectus;
the significant shareholder represents the natural or legal person or the group of legal and/or natural persons who act together and hold either directly of indirectly a participation quota of 10% or more from the social capital of a company or from the rights of vote or has a participation which permits to exert (exercise) a significant influence upon the management and business policy of the concerned company;
the special administration represents the exercise of fiduciary responsibility by the special administrator, for a defined period, upon the assets of the privately administrated pension fund, with the aim of reducing the losses so as to protect participants’ and beneficiaries’ entitlements;
the special administrator can be any legal person authorized to administrate a pension fund, appointed by the Romanian Private Pension Supervisory Commission which subrogates in respect of administrator’s rights and duties for a defined period;
8. the administrator is the commercial company, established in accordance with the provisions of the Romanian legislation in force and with the provisions of the present law, furter named the pension company, that has as sole object of activity the administration of the pension funds and, optionally providing private pensions;
9. marketing agent for the pension fund – the natural or legal person that is empowered to obtain the agreement of the participant to adhere at a pension fund;
10. the beneficiary is the participant’s inheritor, defined in accordance with Civil Code’s provisions;
11. collateral benefits represent any advantages, such as cash facilities or gifts, others than those resulting from the status of participant or beneficiary of a privately administrated pension;
12. the of Private Pension System Supervisory Commission, hereinafter called the Commission represents the autonomous administrative authority, with legal personality, subject to the control of Romanian Parliament, in accordance with the Emergency Ordinance of Government no.50/2005 on the establishment, organization and functioning of the Romanian Private Pension Supervisory Commission, approved with modification by Law no. 313/2005;
13. the Council for Special Surveillance represents two or more persons, in accordance with the number of administered pension funds or the number of participants thereof who belong to Commission’s specialty staff and who provide assistance and supervision with regard to the activity carried out by administrator with the aim of decreasing risks and ensuring the recovery of pension fund;
14. the administration contract represents the contract concluded between administrator and participant, the object of which is the pension fund’s administration;
15. the custody contract is the contract signed by the administrator, as legal representative of the private pension fund in relation with third parties, and by the custodian bank. The object of the contract is depositing the financial assets of the pension fund.
16. the contributions represent the amounts paid by participants and/or paid on their behalf to a pension fund;
17. the custodian is the Romanian credit institution, authorized by the National Bank of Romania, in accordance with the legislation regulating the banking area or the branch based in Romania of a credit institution authorized in a EU Member State or in a state included in the European Economic Area, endorsed by Commission to carry out activities of custody, according to law provisions and which is assigned with depositing all the assets of each privately administrated pension fund, in conditions of security;
18. the privately administrated pension fund, hereinafter named the fund, represents the fund established by a civil company contract concluded between participants, in accordance with Civil Code’ provisions upon the private civil company, as well as with present law provisions;
19. the guarantee pension fund represents the fund established on the basis of contributions paid by administrators and providers of pensions, for the aim of protecting participants’ and beneficiaries’ rights, according to circumstances, acquired within the pension system regulated and supervised by Commission;
20. the Central Collector is the institution that has, by law, the obligation to collect all individual social insurance contributions.
21. the Central Registry is the institution that has, by law, the obligation, to keep the database of all insured persons in the public pension system. the financial instruments represent:
a) exchange securities;
b) participation bonds in the bodies of collective investments;
c) instruments of the monetary market, including state bonds with a due date below one year and certificates of deposit;
d) financial “futures” contracts, including similar contracts with final settlement of accounts in funds;
e) “forward” contract on interest rate;
f) swaps on interest rate, on exchange rate and on shares;
g) options on every financial instrument as presented in letters a) to d) including similar contracts with final settlement of accounts in funds, including options on exchange rate and on interest rate;
h) any other instrument admitted for transaction on a regulated market within an EU Member State or a state included in the European Economic Area or for which was filled up a request for admission to transaction on such a market;
the derivate financial instruments represent the instruments defined at pt. 22. let.d) and g), their combinations as well as other instruments qualified as such by regulations of National Commission of Social Securities;
the participant is the person who contributes and/or on whose behalf were paid contributions to a fund of privately administrated pensions and who shall be, in the future, entitled to a privately administrated pension;
the private pension represents the amount paid periodically, on the whole duration of one’s life, to titular or beneficiary, additionally and distinctly from the pension paid by the public pension system;
the payer is the legal or natural person that retains and pays the individual social insurance contribution.
the daily weight of a fund represents the ratio between the total net assets of fund and the sum of net assets of all funds calculated on that date;
the average weight of a fund for a certain period represents the arithmetic mean of daily weights of funds throughout the considered period;
the prospectus of the privately administrated pension scheme is the document comprising the terms of the administration contract and of the pension scheme;
the technical provision represents an adequate amount of liabilities in compliance with the financial commitments resulted from the investments portfolio able to cover the biometrical and risk-related investments.
the profitability rate of a privately administrated pension fund represents the annualized rate of the product of daily performances, quantified for a period of twenty-four months; the daily performance of a fund is equal with the ratio between the value of a unit of fund valid on that day and the value of the unit of fund on the previous day;
the weighted average profitability rate of all funds represents the sum of products between the rate of profitability of each fund and the average share of a fund within the totality of privately administrated pension funds in the concerned period;
biometrical risks are the death-, disability- and longevity-related risks;
the privately administrated pension scheme represents a system of terms, conditions and rules on the basis of which the administrator collects and invests the assets of privately administrated pension fund so as the participants to acquire a privately administrated pension benefit;
the Member State of origin represents the EU Member State or the state included in the European Economic Area where is based the headquarters and the main administrative structure of the administrator or, in the event that it does not have a social headquarters, the place where its main administrative structure is based;
36. the host Member State represents the EU Member State or the state included in the European Economic Area whose social and labor legislation relevant in the area of privately administrated pension schemes is applicable to the relation between employer and participants;
37. the third state is any other state which is not an EU Member State or which is not included in the European Economic Area;
38. the unit of fund represents the ratio between the value of total net assets of privately administrated pension fund and the up-to-date value of a unit of fund;
(2) The person affiliated, in relation to a natural or legal person, called the first entity, represents:
a) a shareholder or group of shareholders which hold more than 10% from the shares issued by the first entity or which, although holds a lower percentage, can influence either directly or indirectly, the decisions taken by the fist entity;
b) any entity wherein the first entity holds either directly or indirectly more than 10% of the issued stock or which, although holds a lower percentage, can influence either directly or indirectly, the decisions taken by the concerned entity;
c) any other entity wherein a shareholder holds, either directly or indirectly, more than 30% of issued stock and, at the same time, holds either directly or indirectly more than 30% from the totality of shares issued by the first entity;
d) any person who can influence, either directly or indirectly the decisions taken by the first entity;
e) any member of the Administration Board or of another leading or supervising body of the concerned entity;
f) the husband/wife or a relative up to the third degree or a relative by marriage up to the second degree, included, or any other person stipulated under letters a)-e).
Chapter II
The Pension Fund
Art. 3
(1) The financial resources of the pension fund consist in:
a) the net contributions converted into fund units,
b) entitlements of beneficiaries which were not vindicated within the general limitation term;
c) the interests and late payment penalties for the contributions not paid in due time;
d) the amounts resulted from the investment of incomes stipulated under letters a) – c).
Art. 4
The administration-related expenses will be covered by the administrator.
Art. 5
(1) A pension fund must have minimum 50.000 participants and is established by a civil society contract.
(2) The minimum number of participants, stipulated under paragraph (1) must be accomplished in the first three years from the date of establishment.
Art. 6
(1) All participants and beneficiaries to a private pension fund have equal rights and liabilities and benefit of a non-discriminatory treatment.
(2) The participants and beneficiaries of a private pension fund are entitled to equal treatment even in the event of transferring to another work place, permanent domicile or residence on the territory of another state, either EU Member State or included in European Economic Area.
(3) In the event of transferring the work place, permanent domicile or residence on the territory of another state, the participants choose between continuing to pay contributions to a privately administrated pension fund from Romania or to pay contributions to another pension fund.
(4) No person who wants to become participant can be subjected to a discriminatory treatment and can be denied from receiving the quality of participant if the eligibility terms are met.
(5) When applying the present Law, is strictly forbidden to discriminate, directly or indirectly, on the criteria of sex, especially with regard to the area of applicability and the conditions of the pension schemes, contributions and benefits.
Art. 7
(1) The name of pension fund comprises the expression ”privately administrated pension fund“.
(2) The name of the pension fund must not be of such a nature as to mislead the participants, the potential participants or other persons.
Art. 8
A privately administrated pension fund cannot go in bankrupt.
Art. 9
(1) A privately administrated pension fund can be administered and represented in the relationships with third parties, including in front of law courts, only by its administrator.
(2) The complaints and requests brought in front of the competent Court of Law, in relation with the administration of the pension fund, are tax exempted.
(3) The headquarters of the fund are the same with those of its administrator.
Art. 10
The framework of the civil company contract that establishes the pension fund, as well as the amending procedure of this contract will be given via the Commission’s norms.
Chapter III
Licensing the private pension scheme and the private pension fund
Art.11
(1) The prospectus of privately administrated pension scheme is elaborated and proposed by the administrator.
(2) Each prospectus of the pension scheme proposed by administrator must be authorized by the Commision.
(3) The prospectus of a pension scheme can be modified only with Commission’s prior endorsement.
(4) For receiving the authorization for the first prospectus of the pension scheme, the pension company submits to Commission a request, simultaneously with the administration authorization request, the prospectus of pension scheme, including the project of custody contract and the draft of civil company contract.
(5) The authorization of the first prospectus of pension scheme is issued at the same time with the authorization for pension fund’ administration.
(6) The procedure of authorization and amendment of pension scheme’s prospectus is stipulated in the Commission’s norms.
(7) The administrator makes public the prospectus of pension scheme only after its authorization, or adversely the sanction applied shall be the withdrawal of administration authorization.
Art.12
(1) The content of private pension scheme is established by Commission’s norms and mandatory comprises the following elements at the least:
a) administrator’s name and headquarters
b) the eligibility terms for the subscription of participants to the private pension scheme
c) the method of sharing investments returns among participants
d) the investment principles of private pension scheme
e) the financial, technical and other risks related to the private pension scheme
f) the nature and distribution of risks stipulated under letter e)
g) the exclusive right of property of the private pension scheme’s participants upon the amount collected in their individual accounts
h) the conditions for establishing and paying the private benefits
i) the conditions for awarding the privately administrated benefits in the event that disability occurs
j) the maximum percentages of commissions paid by the pension fund, differentiated on categories
k) the periodicity and procedure of reporting to the participants
l) the conditions and procedures of ceasing participation, as well as of transfer to another privately administrated pension fund.
(2) The private pension scheme prospectus may contain any other information required by the Commission.
Art.13
The Commission norms offer the framework of the administration contract which must comprise:
a) the contracting parties;
b) the principles governing the private pension scheme;
c) the basic rights and liabilities of contracting parties and the implementation method;
d) the administration of the fund.
e) the methods used by auditors to control the administrator;
f) the administrator’s liabilities regarding participants’ and authorities’ notification;
g) administrator’s records upon participants, contributions, investments and private pensions;
h) administrator’s records upon participants, contributions, investments and privately administrated pensions;
i) the responsibility of contracting parties, including sanctions;
j) the duration of administration contract, the methods of amending and ceasing the administration contract;
k) information upon the custodian of privately administrated pension fund.
Art.14
The custodian and the auditor pay themselves the licensing fee.
Art.15
(1) The amendment of the pension scheme prospectus will be done by the administrator with the Commission’s prior approval and under the obligation to subsequently inform the participants.
(2) The amendment procedure will be established by the Commission’s norms.
Art.16
(1) The Commission redraws the administration authorization of administrator whether it is proved that the regulations from a prospectus of the pension scheme, the present law provisions or Commission’s norms were breached.
(2) As from the withdrawal date of the administration authorization of administrator, shall apply the provisions regarding the special administration.
(3) The administrator can appeal the decision of withdrawing the administrator’s authorization in front of the competent court of law, in accordance with provisions of Law on administrative contentious falling within the competence of the administrative courts no. 554/2004 as subsequently modified and amended.
Art.17
(1) The private pension fund must be authorized by Commission, after the authorization of administrators and of pension scheme’s prospectus.
(2) The authorization is released on the basis of a request submitted by administrator, with the following documents attached
a) the civil company contract for establishing the privately administrated pension fund;
b) the individual subscription act to the civil company contract based on which is established the private pension fund and to the private pension scheme’s prospectus;
c) other documents and information in accordance with the requirements stipulated by Commission’s norms.
Art.18
(1) The Commission can request from the administrator any other documents and information within 30 calendar days as from the registration date of the request for the privately administrated pension fund’s authorization.
(2) The Commission can verify any aspect related to the request for privately administrated pension fund’s authorization, being entitled to:
a) contact the competent authorities;
b) request documents and information from other sources.
Art.19
The Commission verifies if the fund’s members meet the conditions stipulated by present law as regards their entitlement to become participants according to present law, licenses the civil company contract and, within 30 calendar days as from the reception date of the last set of documents and information from administrator, either approves or denies on a justified basis, the authorization of pension fund.
Art.20
(1) The Commission denies the authorization-request of a pension fund if the documentation submitted:
a) remains incomplete after the term of 30 calendar days as from the request of any additional information or documents;
b) is not drawn up in accordance with legal regulations in force;
c) comprises provisions that might prejudice participants’ interests or does not protect them properly.
(2) The decision to deny the fund’s authorization-request, in written form and with a solid justification, is, communicated to the administrator within 10 calendar days from the adoption date.
Art.21
(1) When the number of participants decreases and maintains below the legal minimum for a quarter of year, the Commission withdraws the authorization of a pension fund.
(2) The decision to redraw the authorization of the private pension fund, written and motivated, shall be communicated to the administrator within 5 days time from the day it is issued.
(3) The administrator must cease any activity related to the private pension fund as from the date of being notified upon the withdrawal of its authorization.
(4) As from the date when the Commission withdraws the authorization of a private pension fund the provisions regarding the special administration will be applied.
Art.22
(1) The decision of denying the authorization-request of privately administrated pension fund or of withdrawing the authorization, according to circumstances, can be appealed, at the competent contentious administrative court, according to law provisions.
(2) Within 10 calendar days after the date when the period of appeal expires or, according to circumstances, as from the date when the decision by which the appeal was solved is stated as irreversible and irrevocable, the Commission publishes the announcement upon the withdrawal of the authorization in the Official Gazette of Romania, Part IV, as well as in two central daily papers.
Chapter IV
The investments of the private pension fund
Art.23
(1) The Commission verifies if the administrators comply with the obligation to invest in a prudential manner the private pension funds assets, basically in compliance with the following rules:
a) the investments are made in participants’ and beneficiaries’ interest and in the event of a possible conflict of interests, the administrator charged with private pension funds’ assets administration must adopt measures able to ensure that the investments are made to participants’ exclusive interest;
b) to make investments in a manner able to ensure their security, quality, liquidity and profitability, while the assets kept for the aim of covering the Guarantee Fund and the technical provisions are also invested in a manner adequate to the nature and duration of participants’ and beneficiaries’ entitlements;
c) the investment in financial instruments transacted on a regulated market, such as it is stipulated by Law no.297/2004 upon the capital market, as amended and modified;
d) the investments in derivatives are permitted only to the extent in which they contribute to the decrease of the investment’s risk or facilitate the efficient administration of assets;
e) the assets must be diversified in a proper manner so as avoid the excessive dependency on a certain asset, issuer or group of commercial companies and risks’ concentrations upon assets’ totality.
(2) The Commission can decide not to apply the requirements stipulated under paragraph (1) for the investments in state bonds.
Art.24
(1) The administrator issues a statement upon the investment policy in written form. The declaration upon the investment policy complies with the investment rules and comprises:
a) the investment strategy of assets, in relation with the nature and duration of liabilities
b) methods of evaluating the investment-related risks
c) risk management procedures;
d) the methods to revise the investments principles;
e) the persons responsible with decision-making and investments’ accomplishment, the decision-making procedures
(2) The administrator revises and amends the declaration upon the investment policy each time when an important change occurs in the area of investment policy or at least once in a period of 3 years, with Commission’s prior approval, informing the participants upon the new investment policy.
Art.25
(1) In accordance with provisions of art.23, the administrator invests in:
a) instruments of the monetary market, including accounts and bank deposits in ROL opened with a bank, Romanian legal person or with a branch of a foreign credit institution authorized to work on the Romanian territory and which is not under special surveillance or special administration procedure or its authorization was not withdrawn, on condition to not exceed the percentage of 20% from the total value of fund’s assets;
b) state bonds issued by the Romanian Ministry of Public Finances, issued by EU Member States or included in the European Economic Area, in a percentage of up to 70% from the total value of fund’s assets;
c) bonds and other securities issued by the authorities of local public administration from Romania or from EU Member States or included in the European Economic Area, in a percentage of up to 30% from the total value of fund’s assets;
d) securities transacted on regulated and supervised markets from Romania, EU Member states or included in the European Economic Area, in a percentage of up to 50% from the total value of fund’s assets;
e) state bonds and other transferable securities issued by third states, in a percentage of up to 15% from the total value of fund’s assets;
Reference: https://asfromania.ro/uploads/articole/attachments/60c0aac56132b312922092.pdf
Disclaimer: This content is provided for general informational purposes only and does not constitute legal advice.
Interested In Learning More?
Talk to our local compliance specialists to disucess your specific situation:
Including employment, payroll, tax, and ongoing regulatory obligations.
Regulation Updates in Romania
Government Emergency Ordinance No. 32/2026 on the access of foreigners to the Romanian labour market
What it is: A new government ordinance introduces a unified digital platform and related compliance requirements for accessing the Romanian labor market by foreigners.
What it changes: It establishes WorkinRomania.gov.ro as a single digital platform, introduces a List of Shortage Occupations, and imposes new employer registration, financial guarantee, reporting, and compliance obligations tied to work permits that employers must operationalize.
Who is affected:
- Employers
- Foreign workers (implied by access to labor market)
What employers should do:
- Prepare for and implement the new digital platform requirements and registration processes.
- Align hiring practices with the List of Shortage Occupations and associated permit reporting and compliance obligations.
Notes: Effective month: 2026-05. Manual verification recommended.
Emergency Ordinance No. 32/2026 on the access of foreigners to the labor market in Romania and for the amendment and completion of certain normative acts
What it is: Emergency Ordinance No. 32/2026 establishes a new digital single-application system (WorkinginRomania.gov.ro) for access of foreigners to the labor market and requires employer registration and authorization of placement agencies, with new employer obligations and sanctions tied to work permits.
What it changes: The policy introduces a digital single-application system for foreigners seeking to work, mandates registration of employers, and requires authorization for placement agencies, along with new employer obligations and sanctions related to work permits.
Who is affected:
- Employers
- Placement agencies
- Foreign workers seeking access to the labor market
What employers should do:
- Register with the system as required
- Ensure authorization for placement agencies involved in recruitment
- Comply with any new obligations related to work permits
Notes: Effective month: 2026-04. Manual verification recommended.
Discover the latest employment and compliance updates in Romania — helping you stay ahead in a changing regulatory landscape.