Changes for the mandatory reporting of financial transactions

Written by: Bridgewest

Changes_for_the_mandatory_reporting_of_financial_transactions.jpgThe New Code of Fiscal Procedure has been adopted by the Senate and, according to the latest changes in the document, lawyers in Romania and banks will not have to report information about their clients to the Romanian National Agency for Fiscal Administration (NAFA). Certain legal provisions have been reformulated so that lawyers, notaries, accountants in Romania, tax consultants and banks will no longer have to report the transactions to their customers, as it would have been the case if the document would have been adopted in its earlier version.

New rules for the use of information

The initial version of the New Code of Fiscal Procedure previously stipulated that a large number of business owners in Romania had to make daily reports about the transactions made in lei to the NAFA. The minimum transaction limit was set at 5.000 lei, regardless if the transaction was singular or if there were multiple transactions linked to one another.
After a report was filed, the provisions were reformulated so that the National Office for the Prevention and Control of Money Laundering will be the one obliged to transmit to the competent fiscal authority any information that may be relevant for the purpose of preventing and controlling money laundering activities. The information will be used only for this purpose by the competent fiscal authority.
A new penalty is included in the latest version of the New Code of Fiscal Procedure submitted by the Mnistry of Finance, it is called the penalty for failure to declare. Moreover, a higher interest rate could be used for late payments and the extrajudicial stamp tax is likely to be eliminated for the issuing of the tax registration certificate.

Who is exempt?

If the New Code would have been adopted in its original form, a series of businesses in Romania would have been requested to perform the mandatory reporting of financial transactions. The ones who would have been requested to do so would have been:
- casinos,
- auditors in Romania,
- fiscal consultants,
- accountants,
- public notaries,
- lawyers,
- real estate agents,
- associations and foundations,
- private pension fund managers,
- individuals with attributions in the privatization process,
- services providers for companies,
- other natural or legal persons commercializing goods or services that are based on transactions in the local or foreign currency, with a limit of the RON equivalent of 15.000 EUR.
The New Fiscal Code was approved by the Romanian Senate and, if it will also be approved by the other chamber of the Romanian Parliament, the changes will apply starting January 1, 2016.
For more information about applicable taxes and the specific calculation methods, you can contact our accountants in Bucharest.