Local companies have been using more and more software applications to improve efficiency of their operations and deliver products and higher added value services, but when it comes to taxation, things are much different from the reality of the private sector.
“A modern fiscal authority is an entity that delivers all the information and watches you closely without intruding, with the help of digitalization. ANAF needs to computerize, because 40% of the letters it sends to taxpayers in one year return to sender, which means a total cost of EUR10 million,” said Dragos Doros, director, Tax, with audit and advisory firm KPMG at the ‘How will digital economy shape taxation?’ event organized by KPMG in partnership with ZF on Wednesday.
Four in ten letters the ANAF sends to taxpayers in Romania do not reach their intended recipients because many companies have moved from the address in their Trade Registry records and a digital solution to address the problem is yet to come, since the project to have the tax authority go digital that was supposed to be implemented in partnership with the World Bank has been shelved.
On the other hand, taxation in a digital environment is a topical subject throughout the world. However, the countries have yet to agree on how to tax transactions of companies that do not have a physical office and Romania is no different in this respect.
“There is international concern about how to tax companies like Airbnb, whose revenues are generated in jurisdictions where they do not have a physical presence. Why? Because the legislation in force applies to a physical presence of a company mostly, and Europe is discussing how to directly allocate revenue and profits to the revenue source country versus the company’s country of residence,” said Ramona Jurubita, deputy senior partner, head of Tax & Legal with KPMG.
In 2017, many Romanian companies took the first steps towards automating financial operations and 2018 will be the year when companies will resort more and more often to solutions involving artificial intelligence. However, frequent legislative changes are delaying the corporate digitalization process.
“Digital transformation is no longer a trend, it is something that is already happening. You may remember last year’s tax-related challenges. We had clients working with 17 different budget scenarios due to the legislative changes. People were wondering if they were using the right IT tools, asking us what to use,” said René Schöb, partner, Tax, with KPMG. Last year’s proposed legislative changes and modifications happened very fast, he said. With all that was going on, who would dare introduce automation software last year, with all those changes, to improve efficiency of their operations and focus on their business, he added.
(English version by Loredana Fratila-Cristescu)