Romania Adopts a Law to Amend its Minimum Tax Act

General

On August 29, 2025, Ordinance No. 21 of August 28, 2025 was published in the Official Gazette. This amends various aspects of the Minimum Tax Act, including for the filing deadline for the designated filing entity nomination, transferable tax credits and the excess negative tax carry forward election.

Many of the changes are technical clarifications to ensure the application of the GloBE rules are aligned with the OECD Model Rules and Commentary/EU Minimum Tax Directive, however, the key substantive changes include:

Designated Filing Entity Nomination – Extended Filing Deadline

Article 48(10) of the Romanian Minimum Tax Act provides that if there are several constituent entities in Romania which are part of the same group, payment and filing of the domestic minimum top-up tax (DMT) may be made, at the option of the constituent entity submitting the DMT return, by a single designated entity. The option must be exercised within 6 months of the last day of the reporting year.

On July 9, 2025, ANAF Order 1.729/2025, outlining the details of the nomination form was published in the Official Gazette and entered into force. On August 11, 2025, Romania issued form N408 to nominate a single designated entity for QDMTT purposes.

The 2025 Law amends Article 48(10) to extend the deadline for filing the notification to 12 months from the last day of the reporting year for the first year of application.

Marketable Transferable Tax Credits

Amended Articles 6(21)/20(5)/25(3) includes rules for transferable tax credits. These tie into the OECD Administrative Guidance issued on July 17, 2023, that provides new rules that apply to transferable tax credits (which are effectively treated similar to refundable tax credits). A transferable tax credit is similar to a refundable tax credit and can generally be used to pay income taxes or can be sold to someone else and the proceeds used to pay its income taxes or other expenses.

QDMTT Safe Harbour

Article 17(5) of the current Minimum Tax Law includes a version of the QDMTT Safe Harbour as provided in the EU directive. This provides that where a foreign QDMTT has been calculated in accordance with the accepted financial accounting standard of ultimate parent entity or with IFRS there will be no top-up tax liability.

The 2025 Law includes an amended Article 17(5) that now includes the OECD QDMTT Safe Harbour including the three standards that are required to be met in the OECD Guidance (Accounting Standard, Consistency Standard and the Administration Standard).

QDMTT – Additional Tax

The 2025 Law includes an amended Article 18(5) that now includes additional tax in the calculation of the QDMTT amount as provided for the general GloBE top-up tax calculation in Article 5.2.3 of the OECD Model Rules.

QDMTT – Deferred Tax

A new Article 18(10) provides that when determining adjusted covered taxes for QDMTT purposes, Romanian entities applying the Accounting Regulations on individual annual financial statements and consolidated annual financial statements  (Directive  2013/34/EU) can calculate and present deferred taxes in the explanatory notes to the annual financial statements or can apply IFRS as the accounting basis.

Excess Negative Tax Expenses

New Articles 25(6)-(10) of the 2025 Law includes provisions for the excess negative tax carry forward election.

As an alternative to incurring additional top-up tax when a domestic tax loss exceeds the GloBE loss, Article 2.7 of the February 2023 OECD Administrative Guidance provides that an MNE can elect for the Excess Negative Tax Expense administrative procedure. 

Where this applies the Excess Negative Tax Expense is removed from Adjusted Covered Taxes for the Fiscal Year and an Excess Negative Tax Expense Carry-forward is established equivalent to the additional top-up tax that would be due

Then in future years when the MNE Group has positive GloBE Income for the jurisdiction the MNE Group reduces (but not below zero) the aggregate Adjusted Covered Taxes by the remaining balance of the Excess Negative Tax Expense Carry-forward.