Last updated: 4 February 2016
In accordance with the Fiscal Code, transfer prices are prices for which a company transfers tangible, intangible assets or supplies services for an affiliate company (in which it holds at least 25% of equity interests or voting rights or which it actually controls). Thus, transfer prices are prices applicable to transactions occurring between affiliated entities. Following the entry into force of the new Fiscal Code, large taxpayers have to draft each year a transfer prices file, containing the information provided by the law, for transactions exceeding the legal thresholds. On the other hand, small and medium taxpayers (for certain transactions) must draft and submit such transfer prices file only upon request from the tax authority, during a tax inspection. The Order of ANAF President no. 442/2016 (published in Official Journal no. 74 of February 2nd, 2016) lists the obligations of taxpayers in relation to the transfer prices file.
TRANSFER PRICES FILE
Until now, the transfer prices file was compulsory only if requested by the tax authority during a tax inspection. From now on, certain entities performing transactions with affiliates are obliged to keep a transfer prices file, if they fulfil certain conditions.
In accordance with Order of ANAF President no. 442/2016, large taxpayers which perform transactions with affiliates must draft each year a transfer prices file and submit it upon request from the tax authority, even outside a tax inspection, if transactions are equal to or exceed the following amounts:
- Receipt or payment of interest for financial services, if the overall annual amount of the transactions exceeds 200,000 Euros, calculated at the exchange rate valid on the last day of the tax year;
- Transactions involving service supply, if the overall annual amount of such transactions exceeds 250,000 Euros, calculated at the exchange rate valid on the last day of the tax year;
- Sale/purchase operations involving tangible/intangible assets, if the overall annual amount of such operations exceeds 350,000 Euros, calculated at the exchange rate valid on the last day of the tax year.
Deadline for drafting the transfer prices file for the year N-1 is identical to the one for submitting the annual tax statements with respect to the tax on companies.
Large taxpayers whose transactions do not exceed the abovementioned amounts, as well as small and medium taxpayers which perform transactions with affiliates must submit the transfer prices file only during a tax inspection, if the amount of the transactions is equal to or exceeds the following amounts:
- 50,000 Euros for interest received/paid for financial services, at the exchange rate valid on the last day of the tax year;
- 50,000 Euros for transactions involving service supply, at the exchange rate valid on the last day of the tax year;
- 100,000 Euros for sale/purchase operations involving tangible/intangible assets, at the exchange rate valid on the last day of the tax year.
DEADLINE FOR SUBMITTING THE TRANSFER PRICES FILE
Large taxpayers whose transactions exceed the value thresholds mentioned above must submit the transfer prices file during or outside of a tax inspection, upon request from the tax authority, within 10 days.
Large taxpayers whose transactions are below the value thresholds mentioned above, as well as small and medium taxpayers must submit the transfer prices file within the period established by the tax authority performing the tax inspection. This period shall be comprised between 30 and 60 calendar days and it can be only extended once, by 30 calendar days, at the taxpayer’s written request.
Failure to submit the transfer prices file entitles tax inspection authorities to consider that transactions with affiliates were made without justifying the transfer prices and to make their own assessment with regard to such prices.