SIMILAR ARTICLES

Sudden and spectacular deficit growth: budget implementation on H1

  At the end of the first half of the year, the general consolidated budget registered a deficit of about RON 15 billion, an amount… Mai mult

World Bank – A scary report that no longer scares anyone: Latest assessment of Romanian emigration

Between three and five million Romanians work and live abroad. The 2017 UN estimate, rated as optimistic by the World Bank’s Report on Diagnosis of… Mai mult

In only one quarter: Incomes increased five times faster than GDP. For public sector employees, even faster

Data released by the INS for the first quarter of 2018 show that households’ living standards increased considerably compared to the same quarter of the… Mai mult

It is the Administrative Code’s turn: little responsibility for local elected officials, higher power for asset disposing, privileges

The Chamber of Deputies votes the amendments to Romania’s Administrative Code on Monday, amendments that strengthen the political control over local administrations. It is expected… Mai mult

Purchasing power declined for second consecutive month: situation by fields of activity

The average gross wage announced by the INS for May 2018 was 4,512 lei, 0.4% lower than in the previous month. Net nominal average wage… Mai mult

36 positions in one year: that is how much Romania lost in terms of tax-accounting system simplification

de Adrian N Ionescu , 7.5.2018

Businesses in Romania face the 18th world’s highest complexity of the accounting and tax systems.

The complexity level of tax and accounting requirements in Romania went up 36 positions in one year in 2018 Financial Complexity Index, according to the assessment of the 2017 regulations in 94 countries.

Only Croatia (12th) and Albania (14th) are worse than Romania in the Central and Eastern Europe, if Turkey, Russia and Belarus are not included.

Ukraine, Bosnia and the Republic of Moldova are better!

All the countries with which we usually compare (those in the Central and Eastern Europe) are much better.

The study based on which the ranking has been made was conducted by TMF Group, one of the relevant global advisory providers having 7,000 experts in 83 countries.

Ranking relevance

The difficulty of doing business, or the (un)attractiveness of the business environment in a country, depends on the complexity of the tax and accounting regulations, according to the authors of the study.

On the other hand, countries with more advanced economies have developed more complex tax and accounting systems. However, difficulties are lower in Germany than in Romania.

Main analysis criteria

The ranking has been made by evaluating the answers to 74 questions addressed to TMF Group experts from these countries about the complexity of:

  • Compliance with regulations (cross-border transactions, corporate representation, data storage)
  • Taxes (registration, number and types of taxes)
  • Reporting
  • Accounting system (rules, relations with authorities and technology that supports them).

Details

The evaluation has also been made based on additional complexity parameters for each of the four main categories above:

  • the frequency of legislative changes,
  • number of rules and exceptions to their application,
  • impact of technology on the accounting system.
  • differences in instructions depending on authorities,
  • accounting and tax regulations in relation to local GAAP (generally accepted accounting principles),
  • reporting and audit requirements in local language and deadlines,
  • VAT and income tax registration,
  • risks associated with non-compliance,

Full ranking

Each of the four categories of criteria mentioned above contributed to the final complexity score by an average rating of:

  • 61% – compliance (in the 2017 Index: 60%),
  • 57% – reporting (55%)
  • 49% – taxes (48%).
  • 46% – accounting (51%).

Comparisons

All countries with which we usually compare are better and, besides them, many other countries in the region. Bulgaria has the simplest tax and accounting requirements. The regional complexity (difficulty) ranking continues with:

  • Ukraine (19),
  • Greece (22),
  • Slovakia (23),
  • Slovenia (39),
  • Bosnia (40),
  • Lithuania (44),
  • Republic of Moldova (45),
  • Serbia (47),
  • Hungary (48),
  • Latvia (49),
  • Poland (51),
  • Estonia (58),
  • Austria (59),
  • Czech Republic (61) and
  • Bulgaria (65).

At the top of the list, countries with economies having authoritarian administration systems such as China (1) and Russia (10) are among the most difficult accounting and fiscal regimes.

Both Italy (4) and France (6) have problems, but precisely because of the delay in adapting their regulations to the evolution of their advanced economies.

Financial Complexity Index 2018

The study is at the second edition after its launching in 2017 and is dominated by the impact of the global trend in the need for transparency and compliance.

Many countries have reacted in the meantime to the OECD Basic Erosion and profit Shifting (BEPS) project, which means more transparency in relation to the ultimate beneficial owners (UBO) and transfer pricing.

Also, the Common Standard Reporting (CSR), designed to allow the automated exchange of information between jurisdictions through financial institutions, has started to produce an impact.

“Countries are as unique as ever and each of them addresses these global issues in a different way, which has led to the current configuration of this ranking,” mentions the study.

Mergeți în homepage ›

Publicat la data de 7.5.2018

Lăsați un comentariu


NEWS

Ministry of Finance is drafting a new fiscal framework valid as of January 1, 2019

The Ministry of Public Finance makes a "comparative analysis" of the Tax Code and the Tax Procedure Code with a view to applying a new… Mai mult

Eurostat: Romania and evolution of employee number in public sector in an European context

Romania, Hungary and Slovenia are the member states that recorded the largest increase in the share of public sector employees in the total number of… Mai mult

Fitch confirms Romania's rating at BBB- but warns: fiscal loosening is risky for macroeconomic stability

Fitch Ratings confirmed on Friday Romania's rating for long-term foreign and local currency debt at BBB-, with a stable outlook, but warned that fiscal loosening… Mai mult

"We are working on a tax amnesty mechanism": announcement made by Minister of Finance

Finance Minister Eugen Teodorovici said at a press conference held in Bistrita that "a mechanism of this type is in progress”, a mechanism on tax… Mai mult

AOAR - Economy against new Criminal Code: businessmen denounce excessive protection provided to officials who cause damages to economy

The Businessmen’s Association of Romania (AOAR) asks the ruling coalition to explain the mechanism by which, after changes introduced on Wednesday in the Criminal Code,… Mai mult

Number of insolvencies increased by 12% in first five months. Suspended activities - plus 31%, dissolutions - plus 59%

The increase in the number of companies and PFAs in insolvency was 11.97% in the first five months of this year, compared to the same… Mai mult

Transport infrastructure in Romania needs EUR 70 billion - double as compared to existing resources

The investment needs in Romania's transport infrastructure exceed EUR 70 billion, while the available resources by 2030 are EUR 36 billion, according to the Transport… Mai mult

Refusal to work annuls entitlement to social assistance - bill voted in Chamber of Deputies

Deputies adopted a draft law on Wednesday whereby entitlement to social assistance ceases when a job is refused. The decision, Agerpres announced, was taken with… Mai mult

Subsidy of RON 900/month for employing a graduate based on contracts of indefinite duration

The National Agency for Employment (ANOFM) grants subsidies of RON 900/month to employers who employ graduates of educational institutions, with contracts of indefinite duration, within… Mai mult

C.P. Tariceanu, before the heads of Senates from EU: The European Commission has encouraged the parallel state, in Romania it is like in the 50's

Calin Popescu Tariceanu (foto) delivered a very tough speech on Friday, in the Senate, addressed to the European Commission, which he accused of encouraging the… Mai mult

National Bank of Romania wants to lower indebtedness limit in granting loans to individuals

The National Bank of Romania (BNR) sent to banks for consultation a draft amending Regulation 17/2012, which provides for a consistent lowering of the indebtedness… Mai mult

High impact provisions: Senate has adopted PSD-ALDE amendments to the Code of Criminal Procedure

Senators adopted on Wednesday the draft for amending the Code of Criminal Procedure, by 74 votes for to 28, against. The bill goes to the… Mai mult

RBL: Workforce crisis is worse than economic crisis - 3.4 million Romanians have left the country in last 10 years

Migration is one of the most serious problems facing Romania at this time, along with the lack of infrastructure. However, the return of Romanians to… Mai mult