On 21 June 2023, the Romanian Government issued guidance to implement of the EU Public Country-by-Country (CbC) reporting Directive in the Official Gazette. On 1 September 2022, Romania became one of the first European Union (EU) Member States to implement the EU Public CbC Reporting Directive with early application as of 1 January 2023, which is significantly earlier than the latest start date, which is 22 June 2024.
While the fundamental principles remain the same, the new guidelines for enacting the EU Public CbCR Directive, made public in the Official Gazette on June 21, 2023, offer additional clarity in certain aspects. These pertain to medium to large subsidiaries of multinational enterprise (MNE) groups engaged in activities within Romania. The new directives specify the requisite data for reporting, offer guidance for addressing situations falling under the “safeguard clause”.
The guidance outlines key points for reporting in the Country-by-Country (CbC) report:
- Net Turnover Definition: When the “net turnover” indicator is not defined in the applicable financial reporting framework, companies should disclose revenue according to the IFRS or their financial reporting framework used for annual financial statements.
- Accumulated Earnings Allocation: The accumulated earnings of a branch’s parent entity should be attributed to the tax jurisdiction where the parent entity is established.
- Aggregation of Information: Information of multiple affiliates within the same tax jurisdiction must be combined and reported as a single entity.
- Activity Determination: Identify the originating location of an activity to determine which specific activities require disclosure in the public CbC report.
