Romania's Tax Overhaul and OECD Alignment: Strategic Tax Planning for MNEs in a Shifting Landscape

Romania's recent tax reforms, aligned with OECD standards, mark a pivotal shift in its fiscal landscape. These changes are not merely regulatory updates but strategic recalibrations aimed at fostering transparency, reducing disputes, and ensuring multinational enterprises (MNEs) operate within a predictable framework. For investors and corporate strategists, understanding these reforms is critical to navigating opportunities and risks in a rapidly evolving environment.

Transfer Pricing Reforms: A New Era of Predictability

Romania's expansion of its Advance Pricing Agreement (APA) program, effective July 2025, introduces a “roll-back” period of up to five years for transactions similar to those under an APA. This retroactive benefit allows MNEs to revise past transfer pricing outcomes, potentially reducing liabilities and enhancing cash flow. For example, a multinational tech firm with operations in Romania could leverage this provision to re-evaluate intercompany licensing agreements, securing more favorable tax treatments for prior years.

The Mutual Agreement Procedure (MAP) has also been streamlined, with a three-year deadline for submitting requests and mandatory bilateral consultations for disputes. This reduces the risk of double taxation and accelerates resolution times. Investors should note that these changes align Romania with OECD guidelines, making it a more attractive destination for cross-border investments.

Pillar Two and BEPS: A Global Minimum Tax Framework

Romania's adoption of the OECD's Pillar Two global minimum tax (15% effective rate) through Law no. 431/2023 ensures that large MNEs cannot exploit low-tax jurisdictions. This is particularly impactful for energy and manufacturing sectors, where profit-shifting has historically been prevalent. For instance, a European energy conglomerate with a Romanian subsidiary must now ensure its effective tax rate meets the 15% threshold, even if it operates in a jurisdiction with lower local rates.

The implementation of the Multilateral Instrument (MLI) further strengthens this framework, updating tax treaties to prevent treaty shopping and align with BEPS principles. This reduces the complexity of cross-border tax planning, offering MNEs greater clarity in structuring operations.

Digital Services and E-Compliance: The New Normal

Romania's e-invoicing mandate (RO e-Factura) and public country-by-country reporting (CbCR) requirements underscore its commitment to digital transparency. By July 2024, all B2B invoices must be processed through the RO e-Factura system, with non-compliance penalties tied to company size. For e-commerce and logistics firms, this means integrating real-time compliance tools to avoid disruptions.

Additionally, the Minimum Turnover Tax (IMCA) for entities with turnovers exceeding €50 million ensures a baseline tax contribution, even if preferential regimes reduce effective rates. This is a key consideration for investors in sectors like retail or hospitality, where tax incentives are common.

Strategic Implications for Investors

Romania's reforms are part of a broader OECD accession strategy, projected to drive GDP growth of 1.5% in 2025 and 2.4% in 2026. However, challenges such as inflation control and EU fund absorption remain. Investors should prioritize sectors poised to benefit from these reforms, including infrastructure (supported by EU funding) and technology (aided by streamlined transfer pricing).

Actionable Investment Advice

1. Reassess APA and MAP Cases: MNEs with ongoing APA or MAP applications should review their strategies to leverage the roll-back period and expedited dispute resolution.
2. Adopt Digital Compliance Tools: Invest in e-invoicing and CbCR automation to meet Romania's stringent reporting requirements.
3. Monitor Pillar Two Impact: Focus on sectors where the global minimum tax could reshape profit structures, such as energy and manufacturing.
4. Engage Local Advisors: Partner with tax experts familiar with Romania's reforms to navigate the evolving landscape.

Romania's alignment with OECD standards is not just a regulatory milestone—it's a strategic opportunity for MNEs to optimize tax planning while contributing to a more equitable global system. As the country continues its OECD accession journey, proactive investors will find fertile ground for growth in a market increasingly defined by transparency and predictability.