Romania reconsiders its Public Country-by-Country Reporting legislation and aligns it with the EU Directive

21 July 2023
• In September 2022, Romania became the first EU member state to publish legislation transposing the EU Public CbCR Directive
• According to Order 1730/2023, only Romanian entities with an ultimate parent company established in a non-EU Member State need to report under the EU directive
• Multinational groups with a non-EU parent will have to meet the Romanian publication deadline of 31 December 2024

Since 1 September 2022, Romania has been the first EU country to transpose the (EU) Directive 2021/2101 on Public Country-by-Country Reporting (Public CbCR) into domestic law, through Order no. 2048.

Public CbCR serves as an instrument for enabling the public to assess tax information from large multinational groups. It aims to allow the public to understand the extent to which multinational groups are committed to ensuring that profits are paid where genuine economic value is generated.

Edwin Warmerdam

Tax transparency has become the foundation of public trust in the fairness of tax systems. Aiming at enhancing public transparency and countering harmful tax practices, Public CbCR will run in parallel with the non-public CbCR obligations, which means companies will continue to file group tax information to local tax authorities.

Edwin Warmerdam Partner, Head of Tax

Although tax authorities worldwide can use broadly similar data from non-public CbCR, the Public CbCR is designed to foster public dialogue on corporate transparency and accountability.

The timing of introducing the Public CbCR coincides with a volatile economic climate marked by uncertainty, supply chain disruptions, and the growing pressure on governments to increase taxable revenue.

In this context, the public expects multinational groups to operate in the spirit of environmental, social and governance (ESG) values, with tax having a central role in terms of the group’s social impact in local communities.

The particularities of Romania’s early implementation of Public CbCR generated a good amount of attention and interest at the level of multinational groups with operations in Romania.

First, Romanian lawmakers opted for an earlier entry into force of the rules, namely starting with 1 January 2023, whilst other EU Member States have implemented or envisaged to implement Public CbCR obligations beginning or after 21 June 2024.

Second, in contrast to the provisions of (EU) Directive 2021/2101, the initial Romanian Public CbCR legislation also established publication obligations for Romanian subsidiaries part of multinational groups controlled by an ultimate parent based in the EU.

Liviu Gheorghiu

Nearly one year after the initial implementation, the Romanian legislation has been aligned with the provisions of Directive (EU) 2021/2101, in the sense that Romanian medium-sized and large subsidiaries which are controlled by multinational groups with an ultimate parent entity based in the EU are no longer subject to Public CbCR obligations in Romania. In other words, the publication obligation only lies with the EU parent entity.

Liviu Gheorghiu Director, Tax

Therefore, only Romanian medium-sized and large subsidiaries controlled by an ultimate parent entity that is not governed by the legislation of an EU Member State, with group consolidated revenues exceeding in the last two consecutive financial years RON 3,700,000,000 (approximately €750mn), are subject to Public CbCR obligations in Romania.

If the ultimate parent company is established in a third country, the obligation to publish the report may be fulfilled by any affiliated entity within the group established in a Member State.

Adrian Mutea

In either case, multinational groups with a non-EU parent, which operate Romanian medium-sized and large subsidiaries, will have to meet the Romanian publication deadline by the end of 31 December 2024, for a calendar reporting FY.

Adrian Mutea Manager, Tax

In light of the above, it is advisable for multinational groups operating subsidiaries in Romania to carefully assess the potential implications of this new legislation.




Press contact

Mădălina Lazăr, PR & Corporate Communication Executive, Mazars in Romania / +40 763 385 622

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