Transfer Pricing in Romania

The legal framework

Romania operates one of Europe's most tightly OECD-anchored transfer pricing regimes. Article 11(4) of the Fiscal Code (Law no. 227/2015) requires every related-party transaction — cross-border and, since 2010, purely domestic — to satisfy the arm's length principle, and it incorporates the OECD Transfer Pricing Guidelines by reference with binding legal effect. That incorporation is dynamic: subsequent revisions apply automatically, which is why Chapter X on financial transactions has governed Romanian audits since 2022 without any domestic amendment. Romania is not yet an OECD member, but the Guidelines carry more formal weight in Bucharest than in many member states, and there are no separate domestic codes for intangibles, services, commodities or cost contribution arrangements — the relevant TPG chapters simply apply.

Affiliation arises under Article 7 point 26 at a direct or indirect holding of 25% of participation titles or voting rights, or effective control; individuals are affiliated as spouses or relatives to the third degree. Procedure sits in the Fiscal Procedure Code (Law no. 207/2015): Article 108(2) grounds the documentation obligation, Article 52 the APA programme, and Article 283 the domestic corresponding-adjustment mechanism. Permanent establishments are taxed on the Authorised OECD Approach with express reference to the 2010 Report on the Attribution of Profits — even though all 88 of Romania's treaties still carry the pre-2010 text of Article 7. Administration rests with ANAF, whose Directorate for Transfer Pricing and APAs acts as competent authority.

Methods, comparables and benchmarking

All five OECD methods are legislated, alongside 'any other method' recognised in the Guidelines, under a most-appropriate-method standard with no hierarchy. The distinctively Romanian features appear at the benchmarking stage. First, comparable searches must follow a mandatory territorial cascade. Under Order no. 442/2016 — which governs procedures initiated through 2026 — that means Romanian comparables first, then EU, then pan-European, then international, with broader sets only where reliable local data run out. Order no. 828/2026 redraws the cascade for FY2026 documentation: a Romanian tested party searches Romania, then the EU (including the UK), then EMEA, then internationally, while a foreign tested party starts in its own jurisdiction before widening to its geographic region (EU plus UK, EMEA, APAC or the Americas) and only then to international data. Second, the arm's length range is statutory: the comparison interval discards the top and bottom quartiles, and any audit adjustment or estimation is made to the median (or the mean of the two middle values). A taxpayer's own voluntary adjustment may land anywhere within the interquartile range, but ANAF adjusts to the median — and the High Court has had to consider, in Decision no. 2946/2022, whether the authority may pull a result to the median even when it already sits inside the range.

Secret comparables are barred on both sides: data must have been reasonably available when prices were set or tested, the taxpayer must be given access to whatever ANAF relies on to estimate, and evidence of the data actually consulted must be retained. The small-sample fallback also changes by regime: under Order no. 442/2016, where at most three comparables survive the screen the arithmetic mean replaces the median; Order no. 828/2026 reverses the quantifier for FY2026 onwards, requiring at least three comparable companies or transactions before the mean applies — one or two comparables no longer suffice. From FY2026, Order no. 828/2026 also codifies benchmarking form — documented search strategy including database and version, rejected comparables listed with reasons, at least three years of data, delivered in editable Excel with formulas intact. There are no safe harbours and no simplified approach for low value-adding services: every intra-group service charge must be substantiated in full.

Documentation: what ANAF expects

Through FY2025, Order no. 442/2016 governs. Large taxpayers whose aggregate annual related-party transactions reach EUR 200,000 (interest), EUR 250,000 (services) or EUR 350,000 (goods) must prepare the file annually, have it ready by the corporate income tax return deadline, and produce it within ten calendar days of request. Other taxpayers prepare it only on audit request, at thresholds of EUR 50,000 (interest and services) and EUR 100,000 (goods), with 30-60 calendar days to deliver, extendable once by 30. Below the lower thresholds no file is due. The single file merges master-file-type group information with the local analysis under Annex 3; there is no separate TP return, and everything must be in Romanian, bound, numbered and indexed.

From FY2026 the ground shifts. Order no. 828/2026 (Monitorul Oficial 543 of 2 July 2026) requires large taxpayers to actually file the TP file annually — electronically via the SPV portal, within 30 working days of the CIT return deadline, signed by the legal representative — turning documentation into a de facto annual disclosure. Thresholds are recalibrated per transaction category and per related party, no longer aggregated: EUR 100,000 services, EUR 200,000 financing, EUR 250,000 intangibles and EUR 350,000 tangible goods for large taxpayers; EUR 50,000/100,000/150,000/200,000 for small and medium ones. The per-party basis narrows some obligations while the new categories widen others, so every group should re-run the arithmetic. Separately, CbC reporting (GEO 42/2017) applies at EUR 750 million consolidated revenue, due within 12 months of year-end, and Romania adopted public country-by-country reporting early: Order 2048/2022 has required qualifying groups (turnover above RON 3.7 billion) to publish an income tax report since 1 January 2023.

Audits, penalties and the enforcement climate

The burden of proof rests squarely on the taxpayer, discharged through the file. The headline fines are modest — RON 12,000-14,000 for large and medium taxpayers, RON 2,000-3,500 for others (Fiscal Procedure Code Article 336), with CbC failures costing up to RON 100,000 — but the true sanction for a missing or thin file is estimation: transactions are treated as undocumented and inspectors adjust income or expenses to the 'central market tendency', meaning the median of whatever benchmark ANAF constructs. Adjusted profits bear the 16% corporate rate plus non-deductible interest at 0.02% per day and a late-payment penalty at 0.01% per day — or, for amounts assessed on audit, a non-declaration penalty of 0.08% per day, reducible by 75% if paid by the statutory deadline (Article 181).

Audits reach back five years — ten where criminal tax fraud is alleged — and ICCJ Decision no. 1605/2025 shows how long the tail can run, addressing a 2018 inspection of FY2012. Selection criteria favour persistent losses, minimal tax paid and significant related-party volumes; formal file requests are typically preceded by enquiries for intra-group agreements. The courts are active: Decision no. 6059/2020 upheld the adjustment of a persistently loss-making manufacturer, Decision no. 2177/2024 tested royalty deductibility despite arm's length TNMM margins, and the CJEU confirmed the regime's compatibility with freedom of establishment in Impresa Pizzarotti (C-558/19).

Dispute resolution and advance certainty

Advance pricing agreements — unilateral, bilateral and multilateral — issue under Article 52 of the Fiscal Procedure Code for up to five years, within statutory deadlines of 12 months (unilateral) and 18 months (bilateral/multilateral), at fees of EUR 20,000 or EUR 10,000 depending on taxpayer size and transaction value. An APA suspends the documentation obligation for covered transactions, requires an annual compliance report, and may be rejected by the taxpayer within 30 days of issue. The significant recent move is rollback: Government Ordinance 11/2025 allows an APA to reach back up to five prior years, and Order no. 827/2026 operationalises it where prior-year facts are comparable — a genuine tool for de-risking open audit years.

MAP runs through Romania's treaties, the EU Arbitration Convention and Directive (EU) 2017/1852 (transposed by GO 6/2020), with the usual three-year window and implementation regardless of domestic limitation periods. Two constraints matter. No unilateral downward corresponding adjustment exists outside MAP, so cross-border relief always requires a competent-authority process; domestically, Article 283 lets the other Romanian affiliate obtain a mirror adjustment. And there are no secondary-adjustment rules. Voluntary year-end adjustments are permitted — indeed expected — whenever results drift from arm's length, and may land anywhere within the interquartile range.

Pillar Two and what changes in 2026

Law no. 431/2023 transposed the EU Minimum Tax Directive: a 15% minimum effective rate via an income inclusion rule and qualified domestic top-up tax for financial years from FY2024, with the UTPR generally following from FY2025, for groups at EUR 750 million consolidated revenue. Transfer pricing outcomes now feed directly into GloBE computations, raising the price of a late or defensive TP adjustment. Amount B, by contrast, is not part of Romanian law — as an EU member Romania falls outside the covered-jurisdictions definition — though it has committed to respect streamlined-approach outcomes applied in covered treaty partners.

The July 2026 reform — Orders 827 and 828/2026 — is the largest procedural overhaul in a decade: annual e-filing for large taxpayers, per-party thresholds, expanded content aligned to the 2022 Guidelines (year-end adjustments, pass-through costs, PE profit attribution, a signed accuracy declaration and a standardized annex of related-party transactions), plus the modernised APA procedure with rollback. The documentation rules cover transactions from 2026, with the new procedures applying to controls initiated after 1 January 2027.

How practitioners should respond

Three disciplines matter most. First, benchmark the Romanian way: run the territorial cascade, keep the rejection log, and price toward the median rather than the edges of the range — the interquartile boundary is not the safe line it is elsewhere, because any audit adjustment lands at the median. Second, treat documentation as a filing, not a drawer file: from FY2026 large taxpayers must submit annually through the SPV within 30 working days of the CIT deadline, in Romanian, with editable Excel benchmarks — a production pipeline, not a PDF. Service charges deserve particular care, since Romania recognises no low value-adding services simplification. Third, buy certainty where exposure is concentrated: an APA now carries five years forward and, since 2025, up to five years back, and exempts covered transactions from the file altogether. With Pillar Two live from FY2024 and audit teams empowered to estimate, the cost of improvisation in Romania has never been higher.