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Accounting Regulations: Economic Interest Groupings Introduced
Romanian accounting regulations have been amended to deal with economic interest groupings. Taxand Romania discusses the amendment.
Romanian accounting regulations now include economic interest groupings (EIGs) in the category of entities obliged to follow Romanian accounting regulations and prepare annual financial statements. Whether an EIG needs to file a full (5 components) or a simplified (3 components) set of financial statements will depend on whether or not it meets the size criteria referred to by the accounting regulations (with reference to turnover, number of employees and total assets).
An EIG will book:
- revenues and expenses according to their nature, where the group carries on operations in its own name
- commissions earned on transactions carried out in the name of its members (the operations themselves will be recorded in third-party accounts).
The amendment and inclusion of EIGs in Romania's accounting regulations follows the introduction of the concept (first introduced in 2003 enacting several measures to insure transparency in exercising of public functions and in the business environment) and its subsequent inclusion as a tax concept in the Fiscal Code (i.e. from a corporate tax viewpoint, EIGs are viewed as associations without legal status according to the tax rules applicable to such associations).
The accounting rules are welcome as they bring clarity to the status and functioning of such groups; however, it remains to be seen whether EIGs (as a form of organisation and business) will become more popular among entities operating in the Romanian market (as this is currently not the case).
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T. +40 21 316 06 45
T. +40 21 316 06 45
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