MY OBLIGATIONS AS A ROMANIAN COMPANY ADMINISTRATOR

The administrator of a company is the person in charge of general management and responsible for organizing and conducting the company’s activity within a legal framework. When it is proven that there are illegal activities within a company, the first person to take responsibility is the administrator. Therefore, he must be involved in all decision-making aspects with legal consequences:

  • The administrator is a person in charge appointed by the constitutive act. He can be a natural or legal person and he can have a limited mandate, compared to the duration of the company’s operation.
  • When the sole associate is also an administrator, his obligations are analyzed separately and are not confused.
  • There is no single, condensed legal basis, covering all the obligations of an administrator, therefore we will refer to several related documents. The main basis is the law of commercial companies, 31/1990 art. ’70-71. Law 31

Let’s clarify together some obligations of the administrator of a Romanian company:

  1. After the establishment of the company, the authorization obligation belongs to the administrator. Although he is not informed at ONRC about the obligation to authorize CAEN codes or about the path through the authorizing institutions, the administrator still has the obligation to authorize. If you are not sure that the activity you are carrying out needs an operating authorization, check this information with your accountant and/or lawyer.
  2. Managing and organizing the accounting is the obligation of the administrator. Regardless of whether you work with an accountant or have hired an economic director, they are legally responsible only for the execution of the accounting, and its management, as well as the content of the operations, remain the responsibility of the administrator. The administrator is the one who decides: the depreciation periods of the goods, the reimbursement conditions of the expenses, the protocol expenses engaged, the salary conditions granted, etc. That is why it is important that he acquires both the general notions of accounting and the obligations they have, in order to act informed.
  3. Although the SRL is a concept of limited liability of the partners, in accordance with the contribution of capital brought, the liability to the administrator can extend to the personal patrimony whenever a defective administration of the company is found. This liability is incurred jointly when an insolvency or bankruptcy procedure has been instituted Law 64/1995
  4. The administrator is responsible for notifying ONPCSB both informatively, upon opening the activity and on the transacted operations that fall under the conditions of Law 129/2022: https:/ /notificari.onpcsb.ro
  5. Every year, the administrator has the obligation to renew the declaration regarding the real beneficiary in the relationship with the bank and upon any change of beneficiaries in the relationship with ONRC.
  6. The administrator has the obligation to ensure the representation of the company in the relationship with all state bodies and can chooses to delegate this obligation to various natural and/or legal persons, through various acts and documents.

HOW CAN I GET MY MONEY OUT OF MY ROMANIAN COMPANY?

One of the most pressing questions of entrepreneurs concerns the legal way in which money from an LLC goes back or ends up in the pockets of the entrepreneur. Below we list 10 perfectly legal methods to get money out of the company and some information about the related taxes.

1. Settlement of expenses incurred for the company (0 taxes)

Organize personal and professional expenses and make a very clear separation between them. Deductible expenses refer to those expenses that can be settled on the company, practically you can withdraw from the company the value of the expenses incurred by you for this. To know which expenses you can deduct from the company, you can use the “deductible expenses” category from the tax code https://static.anaf.ro/static/10/Anaf/legislatie/Cod_fiscal_norme_11022020.htm#A25 Another method is to evaluate yourself the categories of expenses you want to deduct. If they are logical and if you can always explain to a verifier why you need to hire expense x to carry out the activity, all that remains is to consult with your accountant on the details and you can settle.

2. Withdrawal of an advance of expenses (0 taxes)

If you need to withdraw an advance, for these future expenses to be settled, you can withdraw up to 5000 euros. Do not forget that these amounts must be justified with documents and that you cannot exceed this cumulative amount. For example, if you raised an advance of 5,000 euros, you can justify 1,000 euros and the following month you can withdraw a maximum of 1,000 euros again, so as not to exceed this threshold. Practically, depending on how many withdrawals you have, you will take care that permanently you do not exceed this threshold.

3. Payment of dividends (taxes 5% and 8%)

Once every 3 months, you have the opportunity to withdraw dividends together with your associates. If you have associates, you will not only be able to collect dividends, i.e. parts of the company’s profit, but all associates will collect proportionally from the profit. When paying dividends, your accountant will calculate a tax of 5% (2022) 8% (after 2023) which you will have to pay in the month following the withdrawal of the tax. There are some other obligations that you must check with the accountant: the threshold for paying contributions (additional costs), the single income statement and the preparation of an interim balance sheet, if applicable.

4. Payment of royalties (10% tax)

If you have a registered trademark in your name or if you produce content for which you want to keep the copyright, you can draw up a copyright contract with your company and you can be paid based on it. The copyright contract has lower taxes than a salary (10%) and it is also reported in the single declaration.

5. Payment of salaries (taxes 45%)

The associate and/or administrator has the right to work in the company and collect salaries and other salary rights (meal vouchers, mobility allowance, etc.) just like any other person. Of course, this is the most “expensive” form of remuneration for an associate/administrator.

6. Payment of a per diem/travel allowance (0 taxes)

The administrator can receive a per diem/travel allowance for the trips he makes in the interest of the company. There is a legal basis that establishes the maximum level of the per diem when it is granted for trips in Romania and abroad, you can consult it here: https://lege5.ro/Gratuit/geydsnrsgi/diurna-hotarare-518-1995?dp=gizdmmbqgazde

7. Purchases of personal goods from the associate/administrator (taxes 0)

The associate and/or the administrator can sell to the company goods necessary for the company’s activity: a computer, a tablet, a telephone or a car, all of which can become the elements of a sale-purchase contract. Of course, as for all other categories, a fair price will be used and the purchased goods will actually be used in the activity.

SAF-T RO a short history of harmonizing accounting reporting

SAF-T is an information statement, comparable in level of complexity to annual financial statements. Based on the OECD reporting standard https://www.oecd.org, it is part of the reporting transparency package, and is already operational in several Member States: Austria, France, Lithuania, Portugal, Poland and Luxembourg.

To put this report in context, we remind you that with the launch of the single market and the single currency in the Community in the period 1990-1999, the EU has made considerable efforts to harmonize financial-accounting legislation. The aim was to create common reporting standards that would allow both national and European structures to compare data reported by Member States. These, guided by Directive IV https://eur-lex.europa.eu/legal-content/RO/ALL/?uri=celex:32013L0034 harmonized financial reporting legislation and in 2005 began implementing SAF-T. The first country to implement this reporting system is Austria, where reporting has been operational since 2009.

Romania, member of the EU since 2007, seems to have a delay on harmonising its financial-accounting legislation compared to the rest of the member states, except Bulgaria. This delay is also due to the fact that financial legislation was adopted only after EU accession in 2007 as in the pre-accession phase the harmonisation effort has been minimal. While there are many areas where European national legislation is not yet in line with EU law, including tax issues, we consider that at least this reporting objective has been met by adopting OMFP 1802/2014 – for the approval of the Accounting Regulations regarding the individual annual financial statements and the consolidated annual financial statements.

In this context where the reported data have a very high degree of harmonisation, the focus of the OECD remains the transfer price and trans-national economic control. Knowing this history, the adoption of the SAF-T is proving to be exactly the tool that allows both the EU and the Member States to ensure a much more complex and frequent control of the data reported by economic operators. We note that the adoption of SAF-T reporting requires a high level of transparency from the Member States from the outset.

Reporting will be mandatory in Romania from January 2022 for all large companies, the deadlines for SMEs not yet set. Major software manufacturers and implementers are already technically prepared for SAF-T, based on European experiences.

Technically, SAF-T involves collecting data from the General Ledger and reporting them in a formal * xml, according to the structure proposed by ANAF here: https://static.anaf.ro/static/10/Anaf/Informatii_R/ANEXA_1_v7_101121.pdf. In order to clarify a question repeated in the online environment, the file does not require the attachment of supporting documents, the reporting being done exclusively at the level of accounting record. Analyzing in detail the structure proposed by ANAF, it is understood that the reporting through SAF-T involves in fact the transmission in a compressed format of all accounting records made by the economic agent.

The use of this file by ANAF, the tax authorities of the member countries, the EU structures will allow to increase the number of fiscal controls and to increase the compliance in general. Until the use of SAF-T, the tax verification automatically involved going to the taxpayer’s headquarters and verifying the company’s supporting documents and / or cross-checking with other information from the companies with which the transactions took place.

We are thus waiting for a transformation of the tax inspection after the implementation of SAF-T. The expectation is that the current tax audit will have to be significantly reduced, as SAF-T will allow for complex data crossovers, much larger verified data volumes and incomparably superior automatic checks to existing checks.