Romanian anti-fraud inspectors uncover massive irregularities in ride-sharing firms

Romania’s General Directorate for Fiscal Anti-Fraud has checked ride-sharing companies, following a risk analysis, and discovered a loss of RON 175 million caused to the state budget by 128 firms.

The companies were operating illegally, without declaring the revenues they generated for tax purposes and without legally registering the employment contracts of the drivers, therefore failing to pay the related fiscal obligations.

“The operation, initiated on September 29, aimed at uncovering tax evasion practices such as off-the-books payment of drivers’ salaries and non-declaration of income. DGAF has imposed precautionary measures on the companies’ assets, bank accounts, and collectible sums to fully recover the damages,” ANAF said in a press release.

According to anti-fraud inspectors, the ride-sharing companies evaded paying taxes by fictitious loan-for-use contracts, off-the-books payments, unregistered employment, and failures to declare income.

Simply put, drivers transferred their personal cars free of charge to the company, gave 15% of their income from ride-sharing activity to the operating company in cash, and were not legally employed by said firms. The companies, in turn, did not register taxable income in the accounting records.

ANAF specified that the inspections also revealed noncompliance with the obligation to equip cars with fiscal electronic cash registers, even though cash fares were being collected. In one of the investigated cases, a fleet of 230 vehicles without cash registers was identified.

“Through this tax-evading behavior, both the collection of state budget revenues and the rights of natural persons who should have employee status (drivers) are affected, as they are deprived of social protection rights, namely health insurance and pension rights,” ANAF further stated.

Romania’s tax agency is currently under pressure to increase collections and ease pressures on the state budget in the context of an increased public debt and spending deficit.

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