Money transfers between relatives. How to avoid the 70% tax and the risk of a dispute with tax authority in Romania (ANAF)

What legal solutions can be adopted in case of a dispute with ANAF?

Recently, the National Agency for Fiscal Administration (ANAF in Romania) has intensified controls regarding money transfers between individuals, including transfers between relatives. The purpose of ANAF’s inspections is to sanction illicit transactions and combat tax evasion related to incomes whose source cannot be justified. According to Law No. 296/2023 on certain fiscal-budgetary measures to ensure Romania’s long-term financial sustainability, a 70% tax is applied to incomes that ANAF in Romania cannot identify, and the tax authority issues a tax notice of assessment in Romania for individuals in this regard. This article analyzes the legal ways to conduct money transfers, types of disputes taxpayers may have with ANAF regarding tax liabilities, and legal solutions available to taxpayers in case of an abusive notice of assessment in Romania. The Romanian law firm Pavel, Mărgărit & Associates recommends consulting a tax lawyer in Romania or an administrative attorney in Romania who can provide legal assistance and representation in any type of dispute of tax law in Romania with tax authorities and advise on conducting transactions legally to avoid unjustified taxation.

Tax lawyer in Romania. How to transfer money between relatives without facing tax issues?

A tax assessment in Romania for individuals represents a document issued by the National Agency for Fiscal Administration (ANAF in Romania) that establishes a payment obligation. Most often, a tax assessment in Romania is issued after the tax authority verifies certain transactions and determines that they cannot be justified. The Fiscal Code defines taxable and non-taxable income categories, and upon reviewing the relevant articles, it becomes evident that donations are not subject to taxation. Thus, money transfers between relatives can be considered donations, and to justify them, it is advisable to conclude a donation contract in an authentic form. Furthermore, for monetary transfers, it is recommended to use precise notations to clearly indicate the nature of the payments. The absence of supporting documents may lead to the issuance of a notice of assessment in Romania for individuals and the application of a 70% tax on funds whose origin cannot be justified. A lawyer for taxes in Romania can provide legal advice on carrying out transactions, including drafting a donation contract to outline the nature and purpose of the transfer. This ensures that, in the event of a tax audit, ANAF does not misinterpret the transfer and issue a tax notice of assessment in Romania.

Administrative lawyer in Romania. Types of disputes with ANAF

In practice, various disputes may arise between ANAF and taxpayers, particularly in cases of contesting a decision of tax assessment in Romania for incomes with an unjustified origin. Often, the tax authority may consider certain sums as taxable income if there are no documents proving their source, applying a 70% tax. However, there are situations where these incomes are not taxable, leading taxpayers to contest ANAF’s decision of tax assessment in Romania. Another common type of dispute involves forced execution for tax debts. If a taxpayer opposes this, they can file an objection to enforcement. Another example of disputes with tax authorities relates to the statute of limitations for establishing tax liabilities. It may happen that the tax authority issues a tax notice of assessment in Romania, and the taxpayer contests it based on the five-year statute of limitations as stipulated in the Fiscal Procedure Code in Romania. An administrative law lawyer in Romania or an administrative attorney in Romania can provide top-quality legal representation in disputes of tax law in Romania by drafting a tax appeal in Romania and representing taxpayers in court.

Fiscal lawyer in Romania. How can a lawyer assist in administrative litigation issues?

When a taxpayer faces tax-related issues regarding legal money transfers between relatives and the risk of a 70% tax being applied, consulting a lawyer for taxes in Romania is crucial for protecting their rights and avoiding penalties. The verification process relies on supporting documents such as a donation contract or payment proofs that include detailed transaction descriptions. An administrative law lawyer in Romania can assist in drafting a donation contract and provide legal support in case of disputes with ANAF in Romania by contesting the tax assessment decision and representing the taxpayer in both administrative procedures and court proceedings. An administrative attorney in Romania plays a key role in managing tax litigation, acting as a crucial partner in handling tax disputes and offering taxpayers effective defense strategies.

Lawyer for taxes in Romania. Legal solutions for abusive tax assessment decisions

An abusive decision of tax assessment in Romania can significantly impact taxpayers, which is why the Fiscal Procedure Code in Romania allows to appeal a decision in Romania within 45 days from the date of notification, under penalty of forfeiture. According to the provisions of the Fiscal Procedure Code in Romania, a tax appeal in Romania objection may be fully or partially admitted or rejected. If a favorable outcome is not obtained, a taxpayer can take the case to an administrative court to request annulment of the imposed tax liability. An administrative lawyer in Romania can provide specialized legal assistance and representation before the administrative court to challenge the decision of tax assessment in Romania.

“Taxpayers have the right to challenge any decision of tax assessment in Romania that unjustifiably affects their financial interests. A specialized approach by an administrative lawyer in Romania is recommended to protect taxpayers’ rights and interests,” stated Dr. Av. Radu Pavel, Managing Partner of the Romanian Law Firm Pavel, Mărgărit & Associates.

In conclusion, for abusive tax assessment decisions, taxpayers have multiple legal solutions available, from tax appeal in Romania to taking legal action in court. The recent application of a 70% tax on money transfers between relatives has sparked controversy, which is why the Romanian law firm Pavel, Mărgărit & Associates recommends consulting a tax attorney in Romania who can provide specialized advice on properly documenting transactions and complying with legal requirements.

Pavel, Margarit and Associates Law Firm is one of the top law firms in Romania, providing high-quality legal services. The firm’s clients include multinational and domestic companies of great magnitude. In 2024, the law firm’s success stories brought it international recognition from the most prestigious international guides and publications in the field. As a result, Pavel, Margarit and Associates Law Firm ranked 3rd in Romania in the Legal 500’s ranking of business law firms with the most relevant expertise. The law firm is internationally recognized by the IFLR 1000 Financial and Corporate 2024 guide. Additionally, Pavel, Margarit and Associates Law Firm is the only law firm in Romania recommended by the international director of Global Law Experts in London in the Dispute Resolution practice area. All relevant information about Pavel, Margarit and Associates Law Firm can be found on the website www.avocatpavel.com.