Boards tend to think of governance in terms of committees, policies and reporting lines. In practice, much of it is decided far lower down, in how a transaction is documented, how a balance is reconciled and how a tax position is supported. The accounting and tax function is where governance either holds up or quietly fails.
Accounting is the first line of control
Under Romanian Accounting Law no. 82/1991, every economic and financial operation must be recorded when it takes place, based on a document that serves as the supporting document for the accounting entry (art. 6 para. (1)). That document engages the responsibility of those who prepare, endorse and approve it, as well as those who record it in the accounts (art. 6 para. (2)). Overall responsibility for organising and maintaining the accounting records rests with the administrator or the person responsible for managing the entity (art. 10 para. (1)), while the finance function is responsible for the completeness, accuracy and consistency of the underlying information.
Where these responsibilities are not aligned, financial statements prepared in accordance with the applicable accounting regulations may be formally compliant and still fail to provide management with reliable information.
The practical test is simple: can a transaction be traced from the contract to the invoice, the payment and the ledger entry without relying on someone’s memory? If not, the issue is one of control, not of bookkeeping.
Tax compliance as evidence of substance
The Romanian Fiscal Code (Law no. 227/2015) links tax treatment to the purpose of a transaction and the evidence supporting it. For profit tax purposes, deductible expenses are those incurred for the purpose of carrying out economic activities (art. 25 para. (1)). For VAT, the right of deduction is subject to the statutory conditions, including the use of goods and services for transactions giving rise to a right of deduction and the documentary requirements set out in the Fiscal Code (arts. 297 and 299).
The tax authorities may also disregard a transaction that lacks an economic purpose or re-characterise its form to reflect its economic substance, subject to the applicable legal requirements (art. 11 para. (1)). A finance team that documents the business rationale and supporting evidence when a transaction takes place, rather than reconstructing the position during an audit, protects the company and gives the board a more defensible position.
The same logic applies to related-party dealings. Transfer pricing documentation is often treated as a yearly compliance exercise, but it is also one of the few places where a group has to explain in writing why its intra-group arrangements make commercial sense.
This area is also becoming more structured. Under Order no. 828/2026, which replaces, for transactions carried out from 2026, the transfer pricing documentation rules previously set out under Order no. 442/2016, large taxpayers must prepare an annual transfer pricing file, with the significance thresholds now assessed for each individual transaction with each related party. The file must be submitted electronically through the Private Virtual Space (SPV) within 30 working days after the statutory deadline for filing the annual profit tax return. An incomplete or missing file may result in the tax authorities estimating the transfer prices for the transactions and periods for which the documentation is incomplete or has not been presented.
Digital reporting has removed much of the margin for error
RO e-Factura, RO e-Transport and SAF-T (D406) mean that the tax authorities have access to increasingly detailed transaction-level information through interconnected reporting systems.
RO e-Factura has been mandatory for covered domestic B2B transactions since 2024 and was extended to covered B2C transactions from 2025. Since 1 January 2026, the general deadline for transmitting invoices to the RO e-Factura system has been five working days. SAF-T, based on Order no. 1783/2021, has been phased in for large taxpayers from 2022, medium-sized taxpayers from 2023 and small taxpayers from 2025. RO e-Transport also provides transaction and transport data for operations falling within its scope.
This data feeds into the RO e-TVA system. The pre-filled VAT return uses information from systems including RO e-Factura, RO e-Transport, RO e-SAF-T, RO e-Sigiliu, electronic cash registers and other systems of the Ministry of Finance. This means that differences between electronically reported information, VAT returns and accounting records can increasingly be identified through automated data analysis.
For governance purposes, this shifts the emphasis from correcting errors at year end to preventing them in the process: accurate master data, appropriate ERP configuration, clear ownership of each reconciliation and timely investigation of exceptions.
Transparency beyond the financial statements
Financial transparency now extends beyond the financial statements to ownership structures, cross-border arrangements and tax structures.
Beneficial ownership information must be registered with the Trade Registry as required by art. 56 of Law no. 129/2019, with specific deadlines applying depending on the circumstances. Where a change occurs in the identification details of the beneficial owner, the declaration must generally be filed within 15 days of that change. Certain entities are also subject to additional annual filing requirements under the law.
Cross-border arrangements that meet the applicable hallmarks must be reported under the mandatory disclosure rules known as DAC6, based on Directive (EU) 2018/822 and transposed into Romanian law by Government Ordinance no. 5/2020, which amended the Fiscal Procedure Code (Law no. 207/2015).
Groups with consolidated revenue of at least EUR 750 million in at least two of the four financial years preceding the relevant reporting year fall within the Romanian global minimum taxation rules implementing Pillar Two (Law no. 431/2023, transposing Directive (EU) 2022/2523). For the first year of application, the legislation provides an extended 18-month deadline for the relevant declarations and notifications; accordingly, for groups with a calendar financial year and a 2024 reporting year, the first deadline fell on 30 June 2026.
Each of these regimes relies, at least in part, on data maintained by the accounting and tax function. Each also creates a risk if that data is incomplete, inconsistent or different from information reported elsewhere.
What boards should ask of the function
In our experience, the most useful questions are not technical:
- Who owns each key financial and tax control, and how do we know it is operating effectively?
- Are tax positions documented when they are taken, or only when they are challenged?
- Is the group’s data consistent across statutory accounts, tax returns, SAF-T files, transfer pricing documentation and beneficial ownership records?
- Does the finance team have a direct line to management and, where appropriate, the board when a policy, control or deadline cannot be met?
The last question matters most. A function that can raise a problem early is worth more to the board than one that reports a clean result late.
Conclusion
Strong governance does not depend on the volume of policies a company adopts. It depends on whether the numbers are reliable, tax positions are supported, reporting is consistent and the people responsible for both have the standing to say when something is not right.
Investing in the accounting and tax function is, in that sense, investing in governance itself.
