Implementation of new approaches and tools for improving tax compliance of large taxpayers in Romania

The Romanian tax administration, National Agency for Fiscal Administration (NAFA) needed specialised external technical support to cover their needs to explore and experiment with modern tools aiming at the better compliance of large taxpayers (LT). After 26 months of project implementation, NAFA was ready to a cooperative compliance pilot project, in which will create a preventive dialogue between the tax administration and large taxpayers.

Context

Large taxpayers provide about 46% of the total tax revenues in Romania. They have significant capacity to engage in sophisticated tax optimization to pay lower taxes. NAFA had already made certain efforts to ease compliance and lower implementation costs for the LT segment through the use of e-services (e.g. the so-called Private Virtual Space for taxpayers – since 2014), gradual introduction of electronic cash registers (since 2020), use of the dedicated audit manuals and guidelines (since 2019) and the introduction of a tax lottery (since 2015), but the progress with respect to the LT’s tax compliance and tax collection has been slow.

Support delivered

Experts from the Austrian Ministry of Finance, through the Austrian Agency for Economic Cooperation and Development, provided the NAFA with reports on Austrian good practices in the areas of cooperative compliance and e-audit, analytical reports with recommendations in these two areas, support for building a data mining tool, including modelling work, and organised a study visit and related training activities. A closing event was organised in Bucharest on 17 October 2023 to discuss the project’s work and the planned follow-up.

Results achieved

After the end of the project, NAFA was able to launch a pilot cooperative compliance project in Romania in January 2024 and continued to engage virtually with taxpayers, including in the form of documentary checks and e-audits. Over the medium to long term, the project should contribute to the improvement of voluntary compliance of large taxpayers in Romania, further reduction of the average audit duration and cost of collection, making better use of the existing (tax) data, and additional corporate income tax revenues.

More about the project

You can read the documents related to the project here: