Procedure for adjustment of tax liabilities following the reconsideration of a transaction / reassessment of a form of activity
Monica Colt, TAX Advisor, NOERR

Article by Monica Colt, TAX Advisor, NOERR

 ANAF Order no. 3201/2018 regarding the procedure for adjustment of tax liabilities following the reconsideration of a transaction / reassessment of a form of activity was published in Official Gazette no. 61/23.01.2019

The Order has as its main objective to establish the legal framework for settlement of the tax liabilities paid by an individual whose activity is reassessed by the Romanian tax authorities.

The Order regulates the following cases:

  1. Real estate transfer transactions for which the income tax was assessed according to rules of transfer of personal property but which are reassessed by the Romanian tax authorities as independent activity (there have been many such cases in the construction sector). In this case, the income tax withheld by the public notary is assessed as a prepayment towards an income tax liability for independent activities. 
  2. The above procedure also applies in cases where the individual himself has completed the reconsideration of the transaction based on a voluntary declaration. 
  3. Reassessment of an independent activity to a dependent activity by the Romanian tax authorities – in this case, the income tax and the social insurance contributions paid by the individual himself for the independent activity are assessed as prepayment of income tax and social insurance contributions due by the individual for the dependent activity. 
  4. The above procedure also applies where the reassessed form of activity is that of a legal entity. 

Although these aspects were previously regulated by the Fiscal Procedure Code, in the absence of the present procedure, the Romanian tax authorities would not have taken into consideration the income tax and social insurance contributions paid by the individual prior to the reassessment, but expected full payment of the newly instituted tax obligations and provided a refund of the previously paid tax liabilities (a refund that, in most cases, not only is time-consuming but also requires excessive administrative work).

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