SAF-T (Standard Audit File for Tax), created by the Organisation for Economic Cooperation and Development (OECD) in 2005 and updated in 2020, is an international standard for the electronic exchange of accounting data between companies and tax authorities. SAF-T reporting process in Romania was implemented through Government Ordinance No. 11/2021, which mandates the phased submission of the declaration starting from 1^st January 2022. Initially, large taxpayers were required to submit, followed by medium-sized taxpayers, with the final phase set to begin on 1^st January 2025, when small taxpayers and non-residents registered for VAT purposes in Romania will also need to prepare and submit their reports.

How the notification mechanism works for the SAF-T reporting process in Romania

To ensure the accuracy of reported data, ANAF (the National Agency for Fiscal Administration) has recently implemented an automatic notification mechanism for taxpayers who have failed to submit, have submitted incorrectly, or have submitted incomplete D406 (SAF-T) declarations. This initiative is part of an effort to enhance the analysis of data collected through SAF-T, which serves as an international standard for the electronic exchange of accounting data between companies and tax authorities.

Starting August 2024, ANAF has sent notifications to taxpayers who did not fulfill their legal obligations regarding SAF-T reporting. Taxpayers who received these notifications have access to detailed reports of non-compliant transactions included in the enclosed PDF documents. Companies that incorrectly submitted D406 have been notified to correct their errors in 30 days, to avoid additional penalties. Those who did not submit D406 at all have also a 30-day deadline to rectify this.

Errors in the declarations were identified through consistency tests published on ANAF’s website, specifically targeting the “General Ledger Entries” section. According to experts from Accace Romania, the following issues were identified:

• Verification of consistency between the tax amount and the corresponding tax code. The error may involve an inaccurate tax code, an incorrect tax amount, or the erroneous declaration of the tax on a partner account.
• Verification of a non-zero tax amount when no tax code is present. The error could be due to incorrect entry of either the tax amount or the tax code.
• Verification of an erroneous tax amount on an entry related to one of the following accounting accounts: 4426, 4427, 4428.
• Verification of the absence of the General Ledger Entries section or incomplete submission of the declaration.

The notification also includes an email address for taxpayers to contact if they encounter uncertainties or notice inaccuracies in the provided analysis. In cases of non-submission, the notification mentions several contacts within the Fiscal Administration for large or medium-sized taxpayers, depending on the case, who can be approached for further information.

Risks of not complying with SAF-T reporting requirements

Reporting errors or delays are often perceived by tax authorities as indicators of irregularities or potential tax evasion, triggering detailed inspections of a company’s entire financial activity.

Failure to submit the D406 Informative Declaration within the legal deadlines, or incorrect or incomplete submissions, can result in penalties:

• Fines ranging from 1,000 lei to 5,000 lei for failing to submit the declaration within the legal deadlines.
• Fines ranging from 500 lei to 1,500 lei for submitting incorrect or incomplete declarations.

Effortless SAF-T Reporting in Romania with Accace

Keeping up with SAF-T reporting in Romania is crucial to meet compliance requirements and avoid penalties. Companies looking to optimize their SAF-T reporting process in Romania can benefit from technological solutions developed by our Romanian specialists. Accace ensures accurate data preparation, timely submissions and full regulatory alignment. Let our experts handle the process so you can focus on running your business. Get in touch today or discover our accounting and reporting services in Romania.

What you need to know

Preparing for a labour inspection in Romania by the Territorial Labour Inspectorate (ITM) is essential for any employer. It ensures compliance with the Romanian labour legislation and can prevent contraventional sanctions.

Labour inspectors in Romania play a vital role in maintaining a safe, fair, and legally compliant work environment. Through their inspections, they ensure the respect of employee rights, the prevention of work risks, and the promotion of equal opportunities.

Employers must be aware of the types of inspections they may expect and prepare their documentation and internal practices to comply with legal requirements. This not only avoids sanctions but also contributes to creating a healthy and productive work environment.

Competences of labour inspectors in Romania

Labour inspectors have the competence to verify, among others, the following:

• whether employers comply with the obligation to conclude individual employment contracts for all employees. They can verify the existence of the contracts, the accuracy of the entered data, and whether they are signed by both parties.
• whether employers comply with the obligation to register and report employment contracts in the electronic Revisal system. They ensure that all contractual changes are updated within the legal term.
• compliance with legal provisions regarding working hours, overtime, breaks, and leaves. They check attendance records and work schedules.
• whether employers have conducted risk assessments for the health and safety of workers and implemented the necessary measures to prevent work accidents and occupational diseases.
• whether employers provide the necessary protective equipment and whether it is properly used by employees, where applicable.
• whether employees have been properly trained in health and safety at work and whether the training is documented and updated periodically.
• in case of a work accident, labour inspectors are responsible for investigating the circumstances and causes. They draw up detailed reports and can recommend measures to prevent similar incidents in the future.
• whether employers implement the necessary corrective measures to prevent the recurrence of work accidents.
• workplace discrimination complaints. They ensure that employers respect the principles of equal opportunities and treatment in recruitment, remuneration, promotion, and other aspects of employment relations.
• respect for the legal rights of employees, such as the right to salary, leave, and safe and healthy working conditions.
• whether employers use undeclared work (cash in hand wage) and take measures to combat this illegal practice.
• working conditions, including the work environment, hygiene, and employee comfort.
• whether employers offer professional training programs to employees and whether these are adequate and comply with the requirements of the occupied positions.
• whether employees have obtained the necessary certifications and attestations to carry out their work safely and in compliance with legal regulations.

Labour inspectors provide advice and information to employers and employees regarding labour legislation. They can organize information and training sessions to help parties understand and comply with legal regulations.

Inspectors promote good practices in labour relations and occupational health and safety, encouraging employers to adopt proactive measures to improve working conditions.

In case of violations of labour legislation, labour inspectors have the competence to apply sanctions. The purpose of sanctions is to discourage non-compliant behaviors and ensure legal compliance. The inspectors draw up reports of violations and may order measures to remedy non-compliant situations.

In this regard, employers must cooperate with labour inspectors and ensure that they comply with all legal obligations to avoid sanctions and create a positive and legally compliant work environment.

How to prepare effectively for a labour inspection in Romania by the Territorial Labour Inspectorate (ITM)

• First and foremost, make sure you are up to date with Romanian labour legislation, including the Labour Code and other relevant regulations. In this regard, periodically update your knowledge and consult with a labour law specialist if you consider it necessary.
• Check all individual employment contracts to ensure they are correctly drawn up and signed by both parties. Individual employment contracts must contain all mandatory information according to the legislation, such as the probation period, salary, and others.
• Ensure that all employees have undergone medical examinations before the start date of their activity and during the individual employment contract.
• Each employee must have a complete file that includes, among others, the individual employment contract, job description, additional documents, copies of identification documents, certifications, documents regarding occupational health and safety, aptitude sheets, and other relevant documents. Maintaining a complete and updated file not only respects legal requirements, but also contributes to managerial efficiency and the protection of employees rights.
• Ensure you have all payroll statements updated and correct along with D112/D100 declarations and supporting documents regarding salary payments.
• Draw up and update the electronic system of employee records (REVISAL) in a correct and complete manner according to the applicable legislation. If applicable, ensure that there is written notification to the territorial labour inspectorate, within whose territorial area they have their registered office/domicile, about the conclusion of the service contracts provided, as well as the identification data of the provider, within 3 working days from the date of concluding the service contract.
• Ensure you have an efficient timekeeping system and that all hours worked, including overtime and leave, are correctly recorded and documented. Don’t forget to record the hours worked daily by each employee, highlighting the start and end hours of the work schedule.
• Draw up, review, and update the company’s internal regulations, occupational health and safety policies, and other relevant internal procedures. These documents should be available and known to all employees.
• Ensure that all employees are periodically trained in occupational health and safety. Make sure you have all records of such trainings and that employees are provided with the necessary equipment to protect themselves, where appropriate. Conduct a risk assessment for all workplaces and implement the necessary measures to reduce these risks.
• Ensure you prepare the necessary documentation regarding maternity protection at the workplace for the company’s female employees according to legal requirements (occupational health report, notification to the ITM within 10 days of the employee informing about the pregnancy).
• Ensure you have initiated collective bargaining to conclude a collective labour contract if applicable.
• Comply with legal provisions regarding the organization of the health and safety committee if you have at least 50 employees.
• Respect the fundamental principles of equal treatment among employees and ensure you have implemented policies to combat discrimination and harassment at the workplace.
• Implement a system where employees can file complaints or grievances safely and confidentially.
• Conduct regular internal audits to identify and remedy any non-compliances. These audits will help you be prepared for a possible ITM inspection.
• Consult with a labour law specialist to ensure that all your procedures and policies comply with current legislation.
• Maintain open and transparent communication with your employees. Make sure they are informed about their rights and obligations and have access to all relevant documents.
• During the inspection, cooperation with ITM inspectors is essential. Provide all requested documents and respond promptly and comprehensively to all their questions.
• If inspectors identify non-compliances, take the necessary measures to remedy them as quickly as possible. Document all actions taken to correct the issues.

How our specialists can help you with preparing effectively for a labour inspection in Romania

In conclusion, preparing for a labour inspection in Romania by ITM requires a proactive and rigorous approach from employers. By maintaining complete and organized documentation, ensuring compliance with labour legislation, and implementing clear policies and procedures, you can avoid sanctions and protect your business.

Proper preparation not only helps you successfully pass a labour inspection in Romania, but also contributes to creating a safer and more efficient work environment for your employees.

Do not hesitate to contact our Romanian specialists who, based on their many years of experience, will help you effectively prepare for a possible labour inspection.

Understanding the commercial laws of the jurisdiction in which your business operates is curcial. But for entrepreneurs who are just about to start a business, the choice of where they base their company requires thorough consideration of the legal, tax and cost implications associated with starting and running a business in a specific country.

Romania, with its strategic location and growing economy, presents an attractive case for foreign investors. The capital injection can be made in Romania’s national currency or in freely convertible currency, reflecting the flexible investment environment.

As of 2023, Netherlands, Germany, and Austria are some of the leading investors in Romania in terms of equity inflow, [1] complemented by a noticeable uptick in interest from entities in France, the UK, and the USA. A significant part of this capital has been allocated towards transport and storage industry in Romania. This section includes activities related to the provision of scheduled and non-scheduled passenger and freight transport by rail, pipeline, road, water or air, as well as ancillary activities such as cargo handling, storage, etc., and those provided by terminals and parking facilities. It also includes the hire of transport equipment with driver or operator and postal and courier activities.

However, it’s important for investors to understand that the right to conduct road transportation of goods and/or passengers hinges on more than just forming a company. The type of activities undertaken and the business’ focus require companies to obtain a range of licenses and authorizations. The key requirements essential in the transport and storage industry in Romania and necessary for managing transportation operations along with the eligibility criteria for obtaining a licence, as regulated by Government Ordinance No. 27/2011 on road transport and the Methodological Rules adopted therewith are outlined below.

Real and permanent headquarters in Romania

In order to comply with the requirement to have a real and permanent establishment on the territory of Romania, the company must meet the following conditions:

• To have an establishment in the territory of Romania where it keeps the originals of its main working documents, whether in electronic or any other format, in particular its transport contracts, documents relating to the vehicles at the disposal of the undertaking, accounting documents, personnel management documents, employment contracts, social security documents, documents containing data relating to transport operations assigned to drivers and their secondments, documents containing data relating to cabotage, driving time and rest periods, and any other document to which the inspectors of the State Inspectorate for Road Traffic ( I.S.C.T.R.) must have access.
• To organise the activity of its fleet in such a way that the vehicles at the disposal of the company and used in international transport are returned to one of the operational centres in Romania within eight weeks of their departure;
• to be registered at the National Trade Register Office;
• to have one or more vehicles registered or put into circulation and authorised for use in Romania, regardless of whether all the vehicles in question are owned by it or are held under a hire purchase, hire or leasing contract;
• to carry out effectively and continuously its administrative and commercial activities using the appropriate equipment and facilities at its premises situated in Romania, as referred to in point (a), and to carry out effectively and continuously its transport operations using the vehicles with the appropriate technical equipment situated in Romania;
• to have permanently and regularly at its disposal a number of vehicles and drivers whose normal place of business is at an operational centre in Romania; in both cases, this number shall be proportional to the volume of transport operations carried out by the undertaking.

Good reputation

In order to comply with the good reputation requirement, the company and its transport manager should meet the following conditions:

• there are no serious grounds for doubting the good reputation of the transport manager or of the transport undertaking, such as convictions or penalties for serious infringements of national rules in force in the following areas: commercial law; insolvency law; pay and conditions of employment; road transport; professional liability; trafficking in human beings or drugs; tax law; and
• the undertaking and/or the transport manager have lost their good repute as a result of serious infringements, having been declared unfit and having undergone rehabilitation.

Financial capacity

In order to comply with the financial standing requirement, the company must meet the following conditions:

• demonstrate, on the basis of annual accounts certified by an independent auditor/financial expert, that it has at its disposal each year capital and reserves amounting to at least
  EUR 9,000 for the first motor vehicle used, EUR 5,000 for each additional motor vehicle or combination of vehicles with a maximum authorised mass exceeding 3,5 tonnes used and EUR 900 for each additional motor vehicle or combination of vehicles with a maximum authorised mass exceeding 2.5 tonnes but not exceeding 3.5 tonnes used;
• prove, on the basis of annual accounts certified by an independent auditor/financial expert, that it has at its disposal each year capital and reserves amounting to at least EUR 1,800 for the first vehicle used and EUR 900 for each additional vehicle used, in the case of undertakings engaged in the occupation of road haulage operator solely by means of motor vehicles or combinations of vehicles the maximum authorised mass of which exceeds 2.5 tonnes but does not exceed 3.5 tonnes;
• the undertaking and/or its transport manager are not bankrupt, insolvent without an approved plan, in a state of winding-up or in liquidation.

If the company does not prove that it has capital and financial reserves in accordance with the above conditions, it may prove its financial standing by means of a certificate such as a bank guarantee or insurance, including professional indemnity insurance, issued by one or more banks or other financial institutions, including insurance companies.

Professional competence within the transport and storage industry in Romania

In order to comply with the professional competence requirement, the company must meet the following conditions:

• appoint a natural person as transport manager
• the transport manager holds a certificate of professional competence

It is important to note that a transport manager, a natural person, may manage the transport activities of up to four different undertakings.

Any change in the designated transport manager which may affect compliance with the professional competence requirement shall be notified by the haulier to the competent authority within 15 days from the date of the change.

Summarizing the key aspects related to the licensing and authorization for transport enterprises, we highlight the following critical points encountered during their acquisition:

• The registered office must be valid for at least one year from the application date, and the license application must include proof of ownership or the right to use these premises.
• The primary operation of the company must fall within the transportation sector.
• In cases where the organizational structure is chosen to be a branch, the legal requirements are unclear, and a separate transport license may not be necessary. Instead, activities can proceed under the parent company’s license.

The details above are only parts of a company incorporation process. Our team of highly experienced professionals is ready to help you to find the best choices for your company or entity, based on your needs, and take your business to the next level.

[1] Foreign equity investment is calculated as the amount of foreign capital subscribed at registration, plus subscriptions through foreign capital increase, plus/minus share capital transferred by / to resident associates/shareholders, minus share capital subscribed to companies struck off the Commercial Register.

We see a decreasing willingness on the part of both employers and employees to negotiate and conclude a collective agreement. This is mainly due to the fact that employees have become increasingly adept at representing their own interests during individual negotiations, and also to employers’ perceptions of the very concept of a collective agreement.

The conclusion of a collective agreement at the level of the employer can prove beneficial for both employees as well as the organisation. While some employers may feel that entering into a collective agreement would only add costs to the possible benefits that employees would claim, in reality, having meaningful discussions in which both parties transparently set out their demands can often lead to a pleasant working environment.

If the argument about the desirability of initiating collective bargaining does not convince most employers in Romania, the argument about its compulsory nature should.

The law does not explicitly impose an obligation on employers to initiate collective bargaining or to conclude a collective labour agreement, but makes it obligatory for negotiations to have been initiated (by either party). However, failure to provide proof of collective bargaining leads to the employer being penalised.

Specifically, Article 91 para. (1) and (2) of the Law No 367/2022 on Social Dialogue (“Social Dialogue Law“) states that collective bargaining is mandatory at the level of establishments with at least 10 employees/workers, as well as at the level of the collective bargaining sector. The initiative for collective bargaining belongs to any of the social partners.

Article 175 para. (1) letter d) of the Social Dialogue Law provides that the failure of the employer to fulfil the obligation to initiate collective bargaining constitutes a contravention and is punishable by a fine of RON 15.000 to RON 20.000.

Despite the abundance of information available on this subject, we note that, in practice, surprisingly many employers either do not comply with these formalities or do not comply with them properly, which leads to them being fined. This is most likely due to the relatively restrictive nature of the conditions that the parties (especially the employer) must comply with, which can become overwhelming if an experienced consultant is not used.

The legislator has sought to regulate in detail all the procedural stages of concluding a collective labour agreement, starting with the representation of the parties in the negotiations (appointment of representatives and their powers), continuing with the procedure itself (convocation, meetings, documentation to be drawn up), the conclusion and execution of the collective labour agreement (signature, content, duration, effects, amendment, suspension, termination) and ending with its registration with the competent authorities in Romania.

Given that the law imposes an extremely well-defined sequence of stages, a series of documents with precise content that must be concluded at each stage, time limits that must be respected and a multitude of other details whose non-compliance may lead to the legality of the procedure being challenged, the role of lawyers providing the necessary legal advice and assisting the employer in negotiations becomes essential.

If you are in a situation where you have at least 10 employees and have not yet started this procedure, our Romanian legal experts can provide you with the necessary advice throughout the process and assist you in the negotiations with the union/employee representatives.