The tax return 394(internal customer and supplier list) has been amended, effective September 1, 2020, to provide for the inclusion of a special box for confirmation or denial ( by ticking) if transactions with affiliated companies were conducted during the reporting period.

The Romanian legislature did not clearly specify whether the revised 394 declaration, which as is known refers to internal transactions with customers and suppliers, should report by ticking transactions with resident or nonresident affiliating entities, and as a result, many advisors have been doubtful about the obligation to tick the box if there were only transactions with nonresident affiliating entities (which are the subject of another and specific declaration).

Recently, several commentators and tax advisors while also expressing doubts about the correct interpretation of the new rules, have indicated that it is appropriate for prudence to check the appropriate box with affiliated entities, regardless of whether they are made domestically or with nonresident entities.

In our opinion, Anaf’s interpretation is incorrect, but out of prudence it is appropriate as already remarked by distinguished colleagues and considering the penalties involved, to adopt a literal interpretation adhering to the rule.

We remain available for further clarification