SIMILAR ARTICLES

Romania as a market. How important we are to Hungary, Poland, Slovakia

According to data published by the National Institute of Statistics, Romania’s trade exchanges with Hungary, Poland and Slovakia caused almost 43% of the deficit registered… Mai mult

Public pension systems in EU – Bismarck versus Beveridge. Romania: “Sure ain’t no one like us”

European countries have quite diverse pension systems in terms of financing methods but basically based on two models, Bismarck and Beveridge. The former is mostly… Mai mult

“Captivity effect”: Competition Council’s recommendations for institutions not to become dependent on providers who win tenders in IT and health sectors

Authorities are often dependent on a single vendor or distributor, mainly in the acquisition of software developed on demand and medical devices, is the conclusion… Mai mult

Cristian Grosu / Foreign policy for personal use: two dangers that are threatening Romania

The game is, of course, very complicated. But not necessarily from Romania’s point of view. Until the clarification, among the uncertainties of the future, of… Mai mult

Romania of investments in a European context: On the list of declines, but still ranking in the first third of it

Last year, total investment at the national level (both from the public and private sources) in the EU member states amounted to almost EUR 3,100… 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

"We are pulling ourselves out of maps!": Business community’s solutions for infrastructure development

In the medium and long term, companies in Romania lose business because of disarticulated infrastructure; the country overall loses new investment, the state budget loses… Mai mult

New Romania’s Agent at the EU Court of Justice: 32 years old, failed exams, a person supported by Olguta Vasilescu

The government agent at the EU Court of Justice, Razvan Horatiu Radu, was replaced by the Government by a decision of Prime Minister Viorica Dancila… Mai mult

European Commission urges Government to "fully and immediately" reimburse car taxes

The European Commission asks Romania to urgently align the system of taxes collected on the car registration to the European one. The request is announced… Mai mult

CCR President in a visit to Russia, despite that Ministry of Foreign Affairs has recommended not to make this visit

CCR President Valer Dorneanu is in Russia today, where he attends the Sankt Petersburg International Legal Forum, despite that MAE has recommended not to make… Mai mult

List of black payments / Corruption in health sectors: Bribes - 25% of contract value, higher than in other fields

Romania is the European country with the lowest spending in the health sector. However, DNA statistics show that the bribe in this field is higher… Mai mult

Finance Ministry analyses tax codes, article by article, to amend them again

The Tax Code and Fiscal Procedure Code will be amended by the end of this year with a "fair and logical" approach without "populist" initiatives,… Mai mult

Klaus Iohannis - fined by Anti-Discrimination Council with 2,000 RON for using word "offenders"

President Klaus Iohannis was fined with 2,000 RON by the National Council for Combating Discrimination. CNCD President Csaba Astalosz says though he disagrees with the… Mai mult

Multinationals in Romania: home countries and preferred domains

Romanian businesses control only 6.8% of the 78,181 groups of companies in Romania. There have been 78,181 groups of enterprises identified, out of which 5,311… Mai mult

London Stock Exchange opens a Service Centre in Bucharest with 200 employees

The London Stock Exchange Group (LSEG), the operator of London Stock Exchange, announced that it will open a business services centre in Bucharest through the… Mai mult

NATO largest exercise in Black Sea in 2018: More than 2,300 troops from seven countries participate in Sea Shield 18

21 military ships, 10 combat aircraft, and a submarine participate between May 4-11 in Sea Shield 18, the largest NATO exercise organised on the southern… Mai mult

"Emergency constitutional support": President Iohannis sends laws on judiciary to Venice Commission and asks Constitutional Court to wait for the answer

President Klaus Iohannis announced on Wednesday that he is referring to the Constitutional Court of Romania the Parliament's amendments to the three laws on the… Mai mult

IMF revised upwards Romanian economic growth in 2018, from 4.4% to 5.1%

The International Monetary Fund (IMF) has revised upwards the Romanian economy growth forecast for this year, from 4.4% to 5.1%, according to the latest World… Mai mult

Company insolvency, set on an upward trend in 2018, caused losses of RON 9.6 billion in 2017: ONRC statistics

The number of companies and authorized natural persons (PFA) which have declared insolvency increased by 19.31% in the first quarter of 2018 compared to the… Mai mult

Prime Minister Netanyahu's personal doctor, appointed as honorary adviser of Viorica Dancila

Herman Berkovits received in May 2014 the Key to the City from Mayor Sorin Oprescu Herman Berkovits, the personal doctor of Israeli Prime Minister Benjamin… Mai mult

Deloitte study: Romania vs. EU - Tax rules applied to losses from selling bad loans

Deloitte Romania, at the request of the Romanian Banking Association, conducted a study for analysing the tax treatment of the sale of receivables and the… Mai mult