Forvis Mazars: Only two months left to submit the 2024 financial statements: essential new fiscal and accounting regulations for companies

2024 has brought significant legislative changes in the fiscal and accounting fields, directly impacting financial reporting, direct and indirect taxation, transfer pricing, and human resources policies.

Online submission of reports is becoming mandatory, with companies required to file financial statements exclusively in electronic format starting from the 2025 financial year. Additionally, the tax regulations introduced for 2024 establish additional rules for calculating the corporate income tax by limiting the period for carrying forward tax losses and introducing a minimum turnover tax for large companies, as well as an additional tax for specific activities.

In indirect taxes, VAT adjustment rules are becoming stricter, and justifying the deductibility of goods that are destroyed or lost will require thorough documentation. New requirements for public reporting of transfer pricing will enhance tax transparency. At the same time, employers must implement policies in compliance with the European Directive on pay transparency, which will eliminate salary confidentiality and mandate regular reporting on gender pay gaps.

These legislative changes require companies to reassess their financial and operational strategies to ensure compliance and optimise their tax impact. In this context, quickly adapting to the new requirements is crucial, not only to avoid risks but also to maintain competitiveness in the business market.

New accounting rules

In accounting, Emergency Ordinance no. 138/2024, published on 4 December 2024, introduced significant amendments to the Accounting Law no. 82/1991. The new regulations update the frequency of preparing the trial balance and clarify the individuals authorised to sign the Financial Statements. Ana Dragomirică, Accounting Manager, Forvis Mazars in Romania, added: “Additionally, the submission deadline has been set for 30 April or 31 May, depending on the type of entity. Starting from the 2025 financial year, all Financial Statements and Accounting Reports can only be submitted electronically through the Virtual Private Space, which is already mandatory for all companies.

The Ministry of Finance Order no. 981/2024, published on 10 June 2024, regulates the accounting treatment of the minimum tax and the additional tax, introducing new specific accounts for their recording. Additionally, the Ministry of Finance Order no. 4164/2024, published on 23 August 2024, updated the criteria for classifying entities, dividing them into three categories: micro-entities, small entities, and medium and large entities, while establishing new thresholds for assets and turnover.

Major tax changes: corporate income tax and minimum turnover tax (IMCA)

Regarding direct taxes, the legislative changes introduce significant modifications in the calculation and reporting of corporate income tax. Starting in 2024, tax losses can only be offset up to 70% of the profit earned, and the carryforward period has been reduced to five years (down from seven years). For losses accumulated before 2024, the seven-year carryforward period remains in place, but the same 70% utilisation threshold applies. Additionally, sponsorships recorded by companies for which the corporate tax credit could not be used can no longer be carried forward, but the redirection of unused amounts to non-profit entities is allowed.

“Private scholarships have been included in the category of social expenses, with a deduction limit of RON 1,500 per scholarship. A major change is the introduction of the minimum turnover tax (IMCA), applicable to companies with revenues exceeding €50m in the previous year. These companies will be required to pay the higher amount between corporate income tax and IMCA, which is calculated by applying a 1% rate to an adjusted turnover base.”, mentioned Andreea Ignătescu, Tax Manager, Forvis Mazars in Romania.

Additionally, for the closing of the 2024 fiscal year, the incentives related to equity capital remain in effect. Companies that maintain a positive accounting equity benefit from a 2% reduction, while those recording increases of the adjusted equity between 5% and 25% can receive additional bonuses of up to 10%.

Regulations on VAT and indirect taxes

In the field of indirect taxes and VAT, the existing regulations are reiterated, focusing on VAT adjustments for missing goods, the disposal of fixed assets, and the recovery of VAT related to unpaid receivables. Tax authorities allow the retention of the VAT deduction right for destroyed or stolen goods only if appropriate supporting documentation is provided, such as destruction reports or official documents issued by authorities in the case of theft.

“For uncollected receivables, the collected VAT can be adjusted if the debtor has entered bankruptcy or has a reorganisation plan confirmed by the court. The adjustment can be made within five years of the court ruling. In the case of receivables from individuals, the adjustment is possible after 12 months from the due date, provided that commercial or judicial recovery measures have been applied.”, stated Mihaela Hampu, Tax Director, Forvis Mazars in Romania.

Commercial transactions, including sponsorships and discounts, must be properly managed. Freebies and hospitality expenses are subject to limited exemptions, while commercial discounts must be documented through contracts. To justify VAT exemptions, intracommunity deliveries and exports require specific documentation.

Transfer pricing and public CbCR reporting

Voluntary transfer pricing adjustments made by taxpayers are a closely examined topic during transfer pricing audits, especially when the profitability of the Romanian entity is reduced. Therefore, voluntary transfer pricing adjustments require detailed supporting documentation that complies with OECD principles and requirements.

Romania was the first country to implement public CbCR (Country-by-Country Reporting) starting in 2023, with the first publication deadline set for 31 December 2024, for the 2023 calendar year. For groups with parent companies outside the European Union, the CbCR reporting obligation may fall on Romanian entities, depending on the size criteria established by local legislation. The information included in the report is similar to that of non-public CbCR reporting but must also be verified by the statutory auditor.

Adrian Mutea, Tax Senior Manager, Forvis Mazars in Romania, emphasised: “Given the impact of these regulations, companies need to assess whether they have CbCR obligations in Romania. A thorough evaluation of the implementation of voluntary transfer pricing adjustments and close collaboration with tax consultants are essential to mitigating risks in the event of a tax audit.”

Changes in labour legislation and employer obligations

“In the field of human resources and payroll, the European Directive (EU) 2023/970 on pay transparency must be transposed into national legislation by 7 June 2026. It requires employers to provide employees with access to information regarding the criteria used for setting and increasing salaries. Additionally, salary confidentiality clauses in individual employment contracts will be eliminated.”, stated Anca Lamba, HR & Payroll Senior Manager, Forvis Mazars in Romania.

The removal of tax incentives for industries such as IT, construction, and food production has led to increased interest in tax-exempt salary alternatives. Among the benefits recognised by legislation are financial aid, gifts, transportation, medical insurance, voluntary pensions, and sports subscriptions, each subject to specific conditions to maintain tax exemptions. To qualify as tax-exempt, these benefits must be clearly regulated in employment contracts or internal company policies.
In production sectors, providing employees with company products at preferential prices is considered a salary benefit and is taxed based on the difference between the market price and the price offered to the employee. Additionally, the cost of training courses covered by employers is exempt from income tax and social contributions only if the courses are directly related to the employee’s activity and fall under the category of professional training programmes regulated by specific legislation.

To comply with the new regulations, companies must assess their salary policies, address any discrepancies, and implement effective communication mechanisms.

These legislative changes have a significant impact on the business environment and require careful planning to comply with the new requirements. Forvis Mazars’ experts recommend that companies review their internal processes and adopt proactive measures to optimise taxation and financial reporting.