On 5 January 2024, Romania published Law No. 431 of 29 December 2023 in the Official Gazette. This law enacts the implementation of the Pillar 2 global minimum tax in accordance with Council Directive (EU) 2022/2523 of 14 December 2022.
In addition to the Pillar 2 global minimum tax, this law also includes the Pillar 2 income inclusion rule (IIR) and the undertaxed payment/profit rule (UTPR) to ensure a minimum corporate tax of 15% for large multinational (MNE) groups with annual consolidated revenue of at least EUR 750 million in at least two of the preceding four fiscal years. The rules apply to all domestic and international groups with a parent company or subsidiary in an EU member state. The bill also proposes implementing a qualified domestic minimum top-up tax (QDMTT) for members of in-scope groups.
Furthermore, under the new regulations, taxpayers must submit a declaration and settle any additional tax owed within 15 months after the end of the financial year. However, an extension of 18 months is granted for the initial year. The necessary forms and procedures will be issued within 12 months after the law is enacted.
Law No. 431 went into force on 8 January 2023 and is applicable to financial years that commence on or after 31 December 2023, except for the UTPR, which applies to financial years starting on or after 31 December 2024.
On 19 December 2023, the law was approved by the Romanian Chamber of Deputies (lower house of parliament) and passed by the Senate (upper house) on 5 December 2023.
