1. HEADQUARTERS
General provisions
The headquarters is a fundamental element for any Company. Just as every natural person has a residence, it is also mandatory for legal entities to have a place to belong to, and it is called “registered office / headquarters”.
The headquarters shall be the business place of the Company where the correspondence is received and this shall be established before the beginning of the activity, usually by concluding a written agreement (the most common being the bailment / rental agreement).
Solutions for the expiry of the headquarters
- The extension of the headquarters validity
This is applicable if a fixed period has been provided in the bailment / rent agreement. Before the expiry of the headquarters, it can be extended by submitting the amendment extending the original agreement to the Trade Register Office (hereinafter referred to as “TRO”). This operation takes approximately 3 working days.
- The exchange of the headquarters
This shall apply where the duration of the headquarters has expired, but the extension cannot be carried out. A new bailement / rent agreement with the owner of the space shall be concluded in case the Company choose to change its headquarters to another address.
As in the case of the first solution, the new agreement shall be submitted to the TRO and the operation lasts approximately 3 working days for changes of headquarters in the same county, respectively approximately 15 working days for changes of headquarters in another county.
As a general rule, both the first and the second operations shall be recorded at TRO before the expiration of the office.
However, both the extension of headquarters validity and its change can also be achieved after its expiry as the TRO does not apply sanctions for exceeding the submission deadline. It is important to note that by exceeding the deadline, the Company is exposed to a serious risk, as it can be declared inactive by the National Agency for Tax Administration (hereinafter referred to as “NATA”).
2. TAX INACTIVITY
Tax inactivity is a state of a company in the fiscal records, generated by the non-fulfillment of some obligations established in its task.
Basically, this is an NATA sanction that attracts fiscal limitations. One of the most important is the cancellation of registration for VAT purposes.
Also, a company declared inactive, which nevertheless carries out economic activities during the period of inactivity, will have to pay all the taxes, fees and social contributions, BUT during that period, it shall not be entitled to deduct its expenses or VAT on his purchases.
Moreover, the declaration of tax inactivity also has consequences for the company’s customers as they shall no longer be entitled to deduct their expenses nor the related VAT.
The tax inactivity is recorded both in the fiscal record of the Company and of its legal representatives. The implications are quite large as long as the registration of certain facts in the tax record leads to the prohibition of the legal representative from acquiring the status of an associate or director within a company.
Thus, according to art. 92 para. (1) letter g) of the Fiscal Procedure Code (hereinafter referred to as “FPC”) in case the duration of the ownership of the space with the destination is expired, the taxpayer / payer legal entity / any entity without legal personality is declared inactive.
3. THE PROCEDURE FOR DECLARING INACTIVITY IN TAX PROCEEDINGS FOLLOWING THE EXPIRY OF THE HEADQUARTERS
Tax inaction flow is applicable monthly, after the transmission of information from TRO to NATA.
Also, the legal provisions provide for the fulfillment of a ”pre-notification”, namely to notify the company regarding the situation.
Thus, the declaration of fiscal inactivity can be made only after the expiry of the 30 day period from the notification of the Company.
It is important to note that in the records of taxpayers declared inactive, those taxpayers who, as a result of the notification sent, prove that they are no longer in the situation for which they were included in the list, shall not be registered until the expiry of the 30-day period which is specified in the notification.
Proof that the Company is no longer in the situation which has been the basis for its inclusion in the list of inactive taxpayer may consist of:
- the established certificate issued by TRO which shall be submitted by the taxpayer to the headquarters of ANAF to which it belongs;
- the information transmitted by the TRO to the NATA.
After the expiry of the 30-day period, if the situation has not been remedied, the specialized department within ANAF will draw up a Decision to declare inactivity which will be communicated to the taxpayer. This decision is the basis for the Company to be registered in the Register of inactive taxpayers.