Lessons in the action of ANAF “Funtele Nest”: What is to be done and to be avoided in terms of “fiscal domicile”?

Beyond the action of ANAF “the nest with ghosts”: the Romanian taxpayers must take into account the establishment of the fiscal domicile according to the law and its express declaration

Not long ago, ANAF started an action to evaluate the conformity in declaring the fiscal domicile by some of the shareholders/ associations of the Romanian companies, already known (script)/ registration of several companies at the same address. ANAF invoked in the evaluation motivation, respectively in the official communication to the public issued in August this year, the fact that the companies that declare their fiscal domicile at addresses where there can be no decent conditions for carrying out lucrative activities, present the indications of a significant fiscal risk.

According to art. 31 para. (1) letter. c) of the Fiscal Procedure Code, in the case of legal persons, the fiscal domicile is the registered office or the place where the administrative management and the effective management of the business are exercised. Ultimately, par. (3) of the same article stipulates that the fiscal domicile is the place where most assets are located, in case it cannot be established according to the previously stated hypothesis. By assets, the assets/ goods registered in the accounting records are understood.

Following the evaluation, it was found that “over 20,000 companies declared the fiscal domicile and the registered office at addresses where between 10 and 1,500 companies in the same location” (according to ANAF communication), and the taxpayers had the risk of being inactive on the basis of the provisions of art. 92 para. (1) letter. c) of the Fiscal Procedure Code. For example, it may be the so-called “apartment companies”, in other words the cases in which at the same physical address are sometimes there are dozens of companies. The law of companies does not prohibit registration in such a location, but the aspect of the fiscal domicile of the company intervenes.

It is about the fact that the fiscal domicile is taken over/ registered automatically by ANAF at the address mentioned as a registered office in the establishment documents submitted to the Trade Register (Recom). Based on the Fiscal Procedure Code, it is the obligation of taxpayers to inform ANAF about the modification of the fiscal domicile. Thus, in the situation described, starting from the presumption that the registered office was not in fact the fiscal domicile, after the establishment, the taxpayers should have submitted a statement of mentions to ANAF indicating the address where the fiscal domicile is established.

ANAF can declare inactive companies, if the fiscal body finds that they do not work at the declared fiscal domicile. However, in the case of registering the registered office in an apartment of several companies, it is obvious that they cannot physically carry out their activity in that space. So far, this would not be wrong, if there were official mentions of the company to ANAF, specifying the fiscal domicile – the one where the activity is actually carried out, where the taxpayer should be identified. Although it may be appreciated that things are relatively simple and clear, the case may be more complex than it seems at first sight.

As a result of this action, in the case of companies that had the fiscal domicile at an address where many other companies were registered, ANAF issued ex officio inactivation decisions. We understand that such decisions of fiscal inactivation were issued on the basis of the proposals sent by the General Directorate of Fiscal Antifraud and in, some cases, the procedure provided in Order no. 3846/2015 was not respected.

The consequences of the company's declaration as inactive

According to the Fiscal Code art. 11, the consequences go from the ex officio cancellation of the VAT code, the suspension of the VAT deduction right for the acquisitions made during the inactivity period and the impossibility to deduct the expenses related to the company's activity for the period in which it is declared inactive (including for the calculation of profit tax/ fiscal loss), to the remaining tax obligations, or If the provisions of the Fiscal Code have not been respected. These situations can generally be correctly correct, after reactivation, but require additional effort from the taxpayer.

Separately, neither the clients of the inactive taxpayers generally benefit from the right to deduct the expenses and the value added tax related to the purchases from these taxpayers. On the other hand, we also talk about administrative effects: difficulties in the relationship with banks, in participating in auctions, in establishing commercial relations, in the conclusion of contracts, etc.

What the taxpayers have to do

If a taxpayer has reached the situation of being declared inactive on the basis of the provisions of art. 92 para. (1) letter c) of the Fiscal Procedure Code, there are mandatory steps to follow, quickly, to obtain the reactivation of the CIF, respectively of the registration code for VAT purposes. Once the conditions that led to the inactivation of the company have ceased and the procedure provided by law has been fulfilled, the companies should submit a request to the fiscal body for reactivation. If, following the checks, the fiscal body finds that the conditions of reactivation are met, ANAF will issue reactivation decisions. The law does not provide for sanctions or other types of penalties, but the procedure itself for unlocking lasts, possibly, from a few weeks upwards, and the effects of this block are on the company's commercial relations chain, not just for it. They will suffer both the company and the clients/ beneficiaries of the deliveries/ provision of the company declared inactive by the Fisc. If you are declared inactive, you will need to submit the outstanding statements, to remedy the problem of the fiscal domicile (eg, the conclusion of a rental/ convenience contract for the place where the fiscal domicile is), after which to request the reactivation to ANAF with the supporting documents that show that the reasons for declaring inactivity have been remedied. Make sure that all non-fulfilled declarative obligations are carried out and analyzed/ regularized together with the lawyer/ lawyers/ fiscal consultants of the company any possible problem regarding the fiscal domicile or the registered office, to be in accordance with the provisions of the Fiscal Procedure Code. In order to avoid such problems, it is also important that, following the registration in Recom, you will declare the real fiscal domicile, as soon as it is known, including its change during the activity, whenever necessary.

Species of activities with the risk of taxpayer declaring as inactive by ANAF:

-formal registered office-many companies use offices at the administrator's home or hosting addresses (law firm, accounting companies, hubs). Most of the times, the companies that register the registered office for such addresses, carry out or manage it in other locations. In these situations, ANAF may consider that the declared fiscal domicile is not the one established according to the legislative provisions.

– the registered office at the correspondence address – situations in which the companies rent an office to register/ communicate the respective location as a correspondence address, but in fact carry out the activity in one or more different locations (eg, work points). ANAF may consider that the company does not carry out activity at the declared fiscal domicile, respectively the registered office.

– activity carried out mainly to customers or at home – the activity is often carried out at the beneficiary's headquarters. ANAF can interpret that at the registered office there is no activity and can verify if it is just a fictitious address. Here things are more complicated than the law provides and we have countless examples that show that, in 2025, compared to only six years ago (before pandemic) the diversification of ways and working tools, as a mix between work from office headquarters (own or customers) and working at a distance (at home, in another city), in another city), in another city).

However, regardless of the situation as such of a taxpayer who has fulfilled his obligations from the perspective of the law of commercial companies at the time of registration at Recom, the main idea is that, in order to be identified at any time by the fiscal body, he must establish and notify/register the tax domicile established according to art. 31 para. (1) letter c) or para. (3) of the Fiscal Procedure Code.

recommendation

First of all, it must be checked if the procedure for declaring inactivity has been respected, based on Order 3486, otherwise, together with the lawyers and fiscal consultants of the company, the decision of inaccuracies issued by ANAF should be challenged within the legal term. Whether or not this procedure has been respected, preventively, companies must verify their status on the registered office-fiscal domicile, to see to what extent they are subject to inactivation. In the case of newly established companies, it is important to consider this aspect from the beginning (especially if they have work points or I know that they will carry out their activity elsewhere and not at the registered office). If it is concluded that the fiscal domicile established according to the fiscal legislation does not correspond to the declared registered office, the companies should notify ANAF by submitting a statement of mentions.

In essence, as a whole, one and the same conclusion results: the ANAF checks have targeted (and will continue to) compliance in statements of the registered office and the fiscal domicile, two different notions: the first is for the activity of the company (respectively recommend), the second has to do with the tax tasks of the taxpayer, for which the ANAF must be notified in the case. Therefore, our recommendation is for companies to continue to consider this aspect and to ensure a permanent compliance with fiscal legislation, to eliminate any risks (of the nature of the above) that could cause business problems (including in the long term).

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Authors: Andra Cașu, partner, leader of the Direct Tax Department, EY Romania,

Georgiana Pustin, Senior Manager, Indirect Tax, Ey Romania, and

Cristina Clujescu, Senior Manager, International Tax and Transaction Services, Tax Advisory and Compliance Services, EY Romania

Article supported by EY Romania