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Romanian companies not keen to access legal tax benefits
The Romanian companies are not keen to access fiscal benefits offered by law, the most frequent reason being the legislative complexity and the fear to make mistakes in their application, shows a study made by the consultancy company EY Romania.
On the other hand, more than half (51%) of the participating companies in a survey say that they do not know the existence of benefits which could be accessed in their relation with the fiscal authorities.
The regulations in the Romanian legislation regarding the implementation of fiscal benefits are considered by several companies as being unclear, and the requirements for documentation rather stuffy (34% of those who applied fiscal benefits offered to the company). On the other hand, there is a certain concern regarding the fiscal inspections and their results as implementation by the taxpayers of the different fiscal facilities. Thus, the tendency of the majority of the companies is to avoid implementing the benefits offered by the Fiscal Code; 62% of the participants to the study stated that they have not decided yet to access the fiscal benefits available through law.
The context is one in which, on the one hand, tax costs are assessed by more than 96% of respondents as medium and high, and on the other hand, recent tax changes have been adopted almost exclusively in the sense of increasing some taxes in Romania, both direct and indirect. Therefore, it is expected that company management will move to tax optimisation measures, and here more detailed analysis of tax benefits could be considered, the consultants point out.
When asked about securing and allocating sources of funding to cover liabilities, most companies (42%) responded that they need to prioritise tax liabilities over other initiatives. An almost equal percentage (41%) indicated that it is easy for them to secure financing for their debts to the state budget and there is liquidity to cover them. At the same time, less than a fifth (17%) of the companies surveyed said that it is difficult and even very challenging for them to cover their tax liabilities.
More than 63% of companies said they were undecided at this stage whether they would access the tax benefits, and 21% said they had no such intention. Less than one-fifth (16%) say they are interested and will consider looking into facilities related to tax relief for reinvested profits, fringe benefits and others.
The EY Romania study included companies with a number between 250 and 1,000 ( and over) employees (55%) and small and medium companies, between one and 250 employees (45%). From the perspective of the business taxes, almost 60% of the interviewees were big taxpayers, the rest small and medium, and from the point of view of the fiscal costs, the interviewees were the majority from the category of those who indicated they had big costs (59%) and the rest 41% small and medium. The research was undetaken at the end of 2023.
EY is one of the largest professional services firms globally, with 395,442 employees in more than 700 offices in 150 countries and revenues of approximately $49.4 billion in the fiscal year ending June 30, 2023. Present in Romania since 1992, EY provides integrated audit, tax, legal, strategy and transaction advisory services to multinational and local companies through more than 900 employees in Romania and the Republic of Moldova.