In an attempt to combat tax evasion and optimize tax collection, tax authorities in many countries, including Romania, are paying increased attention to high-risk tax products. Order number 12 of January 6, 2022 on the determination of high tax risk products traded in B2B relationships issued by the National Agency for Tax Administration comes to clarify and regulate this category of products in the context of B2B (business-to-business) transactions. This article details the notion of high tax risk products and lists the specific products designated under this order.
WHAT ARE HIGH TAX RISK PRODUCTS IN ROMANIA?
High tax risk products are defined by tax legislation as those goods or services which, due to their nature or market conditions, are considered likely to be involved in tax evasion or other tax irregularities.
These products are often subject to a special tax regime or heightened surveillance measures, as transactions in these products present a significant risk in terms of loss of budgetary revenue.
WHAT ARE HIGH TAX RISK PRODUCTS IN ROMANIA?
According to Order number 12 of January 6, 2022, a number of products traded in B2B relationships have been identified as high tax risk.
As per the latest regulations, we detail the list of high tax risk products, the justifications associated with their categorization and the relevant CN (Combined Nomenclature) codes:
- EDIBLE VEGETABLES, FRUITS, ROOTS AND TUBERS
CN codes: 0701-0714; 0801-0814
These products present a low degree of taxability, often not recorded in the taxpayers’ accounting records along the trading chain. Their perishable nature and extensive use of cash in market transactions favor tax evasion.
- ALCOHOLIC BEVERAGES
CN codes: 2203-2208
The field of alcoholic beverages is recognized for tax evasion due to high taxation. This sector has a low degree of taxation and is frequently the subject of complaints from trade associations.
- NEW CONSTRUCTIONS
The high volume of transactions and the specific tax regime require close monitoring to prevent tax evasion and early detection of non-compliance.
- MINERAL PRODUCTS (NATURAL MINERAL WATER, SAND AND GRAVEL)
CN codes: 2201-2202; 2505; 2517
The extraction and marketing of mineral products, including mineral water, involves fiscal risks due to high demand and difficulties in monitoring production.
- CLOTHING AND FOOTWEAR
CN codes: 6401-6405; 6101-6117; 6201-6217
These products are often used in tax evasion schemes, with transactions characterized by rapid business cycles and the involvement of companies with inappropriate tax behaviour.
This classification of high tax risk products underlines the need for increased attention by taxpayers and tax control bodies to ensure compliance and to combat illegal practices. Effective monitoring of these products is important to protect state revenues and maintain a fair and transparent business environment.
