In the September 2013 issue of our newsletter (TPS Express) we brought into discussion several suggestions that could make make life easier for the taxpayers and even serve the interests of the tax authorities. Today, the measures are up-to-date:

The situation

1. Current Romanian legislation requires all companies to have transfer pricing documentation with regard to transactions carried out with related parties. 

2. The law does not take into account the size of the companies or value of transactions. In other words, a company with 10 employees performing occasional intra-group transactions of EUR 1,000 may have the same fixed costs of documentation as a company with 500 employees and current transactions of one million euros. 

3. EU Joint Transfer Pricing Forum recommends a flexible, balancedapproach to rules for reporting / transfer pricing documentation for SMEs. 

The solution 

1. Elimination of transfer pricing documentation regarding related party transactions in cases where:

i) companies with turnover below a certain level; 

ii) transactions that combined do not exceed a certain annual value. 

2. Introduction of simplified transfer pricing documentation (eg. no mandatory benchmarking studies for certain transactions) for companies with turnover within a certain range;

3. Regulation adjustment mechanism 

Do you agree with these measures? That these should be the legal thresholds? 

You can write your opinions and comments at:, 0742.159.142. 

We want a constructive dialogue regarding this issue therefore, in order to make an informed decision we would like to offer you all the necessary elements. The actual question is:

  • Should the current system of "required documentation submitted at the request of the tax authority, without any threshold of transactions" be kept or
  • Should the "mandatory annual reporting documentation, based on a threshold of transactions?” be applied?

It seems like we are on the horns of a dilemma…