On 4 October 2023, the Ministry of Public Finance in Romania opened a public consultation on a draft law and explanatory note for implementing the Pillar 2 global minimum tax as per the Council Directive (EU) 2022/2523 of 14 December 2022.

The draft law includes the income inclusion rule (IIR) and the undertaxed payment/profit rule (UTPR) to guarantee a minimum tax rate of 15% for Multi-National Enterprises (MNE) groups with annual consolidated revenue of EUR 750 million or more in a minimum of two out of the previous four fiscal years.

Key features of the proposal include:

General: The IIR will be effective for financial years commencing on or after 31 December 2023. The UTPR will generally be applicable one year later for financial years starting on or after 31 December 2024.

However, the UTPR will apply to financial years commencing on or after 31 December 2023 if the UPE of the group is located in an EU Member State that has chosen the IIR and UTPR deferral (as stated in Article 50 of the Directive). A DMTT will be applicable for financial years beginning on or after 31 December 2023.

Safe harbors: The draft law includes the agreed transitional CbC Reporting Safe Harbour. Furthermore, it introduces a safe harbor rule for QDMTT (i.e., IIR and UTPR Top-up Tax are considered zero in Romania compared to other jurisdictions implementing QDMTT).

OECD guidance: The draft bill cites the OECD Commentary and the OECD Administrative Guidance as resources for interpreting local legislation.

Administration: Every Constituent Entity would be required to submit a Global Information Reporting (GIR) within 15 months following the end of the Reporting Fiscal Year (18 months for the transitional year). Any top-up tax must be declared and paid by the same deadline.

Penalties: Non-compliance with administrative requirements may result in penalties for taxpayers. The penalty amounts are based on the current Romanian tax procedural law.