Romania’s Government adopted on Friday an emergency ordinance that transposes into the local legislation a European directive aimed at reducing fiscal optimization by multinationals.

The directive obliges international groups to make detailed financial reports in the country of residence.

“This ordinance aims to combat tax evasion and aggressive fiscal planning and to make the multinationals’ activity more transparent,” said the Government’s spokeswoman Alina Petrescu.

The multinational groups will have to make detail reports for each country where they operate, which will include the revenues and pre-tax profits made in the respective countries and the taxes paid in those jurisdictions. The reports will also include information related to the number of employees, capital, and assets the multinational has in each fiscal jurisdiction. The countries will automatically share these reports between them.

The European directive was adopted last year and should be implemented by all member states within two years, but Romania decided to transpose it earlier in an attempt to increase tax collection.

The leaders of the governing Social Democratic Party (PSD) have criticized multinationals in recent months blaming them for supporting the anticorruption and anti-government protests in February.

editor@romania-insider.com