ANAF adjusted transfer prices and taxed a profit that the parent company had already taxed in Germany. Or Italy and Romania both treat you as resident and both want tax on the same income. The administrative appeal challenges the Romanian act; the court rules on the Romanian act. Neither can bind the other state. For that there is a separate procedure, used far less than it should be, and recently reformed.
The mutual agreement procedure (MAP) is the mechanism set out in the dedicated article of every double taxation treaty, under which the competent authorities of the two states consult each other to eliminate taxation not in accordance with the treaty. In Romania, under Article 282 of the Tax Procedure Code, the competent authority is ANAF, through its Transfer Pricing and Advance Pricing Agreements Directorate.
The application is filed within three years of the communication of the act, or of notice of the non-conforming taxation, by any affected person, regardless of residence, and can be filed even before double taxation actually arises. ANAF first attempts a unilateral solution, then negotiates with the other state. For European cases, Directive (EU) 2017/1852 and the Arbitration Convention 90/436/EEC add time limits and mandatory arbitration. The agreement is implemented through a settlement decision (decizie de soluționare), which amends the tax assessment.
ANAF increases the profit of the Romanian subsidiary, but the same profit has already been taxed at the affiliated company in the other state. Without a corresponding adjustment there, the group pays twice. This is the classic case for the mutual agreement procedure and, within the Union, for the Arbitration Convention.
Both states treat the individual or the company as resident and tax worldwide income. When the tie-breaker criteria do not settle the matter, the treaty itself refers it to agreement between the competent authorities.
A state finds a permanent establishment (sediul permanent) and taxes the profit attributable to it, while the company's state of residence has already taxed the same profit in full. Or, conversely, the source state attributes more profit to the establishment than the other state recognises.
The source state withholds tax above the rate set by the treaty, or on income the treaty allocates exclusively to the state of residence, and Romania does not grant credit for what was withheld without legal basis. A refund in the other state may require the intervention of the Romanian authority.
Until 2025, the Romanian text allowed the application only to a taxpayer resident in Romania, and only after the non-conforming taxation had already occurred. The restructuring of Article 282 opened the procedure to any affected person, regardless of residence, and allowed it to be triggered pre-emptively, when the actions of one or both states will lead to non-conforming taxation, without waiting for it to occur and take effect.
The time limit was standardised at three years from the communication of the tax administrative act, or of another notice, with the shorter time limits in older treaties extended to three years, in cooperation with the partner authority. ANAF was expressly given the power to depart from the findings of the initial tax inspection, in line with the treaty, which used to be, in practice, the main obstacle: the administration would negotiate with the other state while defending its own act.
Bilateral consultation became mandatory when ANAF cannot resolve the matter unilaterally, access to arbitration was secured wherever the treaty or the European framework provides for it, and implementation is made through a settlement decision, amending or cancelling the tax assessment. One condition remains: for the matter subject to the procedure, the contentious route must be set aside; the mutual agreement cannot contradict a final court judgment. In 2026, ANAF put out for consultation the order on how the procedure is to be conducted, with the detailed rules.
For disputes between member states, Directive (EU) 2017/1852 on tax dispute resolution mechanisms, transposed into Title IX of the Tax Procedure Code, brings what the classic procedure lacks: time limits. The application is filed within three years, the authorities decide on admissibility within six months, agreement must be reached within two years, extendable by one, and failing that the taxpayer can request the setting up of an advisory commission, whose opinion becomes binding if the authorities do not agree otherwise. A refusal to admit by both states can be challenged, and a refusal by only one opens the route to the commission.
For transfer pricing between associated enterprises within the Union, the Arbitration Convention 90/436/EEC, with its revised code of conduct, operates in parallel, with the same mechanism: two years for agreement, then the advisory commission. The taxpayer chooses the basis for the application, and the choice determines the time limits and access to arbitration.
For states outside the Union, the treaty procedure remains, with no time limit for completion and with arbitration only if the treaty or the multilateral instrument provides for it in that relationship. ANAF's guide on the mutual agreement procedure, updated in October 2025, lists the 89 treaties and recommends checking the time limit in each one.
What income, what state, what article of the treaty was breached, by whom. Economic double taxation, the same profit at two entities, and juridical double taxation, the same income at the same person, rest on different grounds.
Three years from the communication of the act or of the notice. It is calculated from the first act that produces the non-conforming taxation, in either state. The time limit is not suspended by an administrative appeal.
The bilateral treaty, Directive 2017/1852, or the Arbitration Convention, where they are available. The choice decides the time limits, arbitration, and the relationship with domestic procedures. It is made at the outset and is not easily changed.
What is challenged domestically, for defects in the act, and what goes into the mutual agreement procedure, for double taxation. Giving up the contentious route for the matter subject to the procedure is a condition; a final judgment blocks a contrary agreement.
Identifying the persons and the states, the periods, the acts, the basis under the treaty, the legal position and the figures reconciled between the two jurisdictions, with transfer pricing documentation where relevant. The application is, as a rule, filed in both states.
The taxpayer does not take part in the negotiation between the authorities, but feeds them information and tracks its own time limits. When the European time limit expires without agreement, it requests the advisory commission.
The taxpayer accepts or refuses the agreement; if accepted, it is implemented through ANAF's settlement decision, amending the act and refunding the tax overpaid. If refused, the domestic routes remain, if any are still available.
The administrative appeal and the court concern the Romanian act. The other state is not bound by them. Double taxation remains until the states reach agreement.
The three-year time limit runs from the first act. The reform allows a pre-emptive application precisely so there is no need to wait.
Giving up the contentious route for the matter subject to the procedure is a condition, and a final judgment blocks the agreement. The routes are coordinated, not combined.
The European framework has time limits and arbitration. And for large transfer pricing adjustments, it is the only route that actually eliminates double taxation, not just the accesorii.
The mechanism set out in every double taxation treaty under which the competent authorities of the two states consult each other to eliminate taxation not in accordance with the treaty, usually double taxation. In Romania, the competent authority is ANAF, through its Transfer Pricing and Advance Pricing Agreements Directorate, under Article 282 of the Tax Procedure Code and ANAF's guide on the mutual agreement procedure.
Any affected person, individual or company, regardless of residence, following the reform under OG nr. 11/2025. The application is filed within three years of the communication of the tax administrative act, or of another notice of the non-conforming taxation; if a treaty sets a shorter time limit, the Tax Procedure Code extends it to three years. It can also be requested before double taxation actually arises, when a state's actions will bring it about.
The two routes cannot be concluded in parallel with different outcomes. The rule introduced in 2025 makes access to the mutual agreement procedure conditional on giving up the contentious route for the matter subject to the procedure, and the mutual agreement cannot be implemented against a final court judgment. The choice is made strategically: the administrative appeal for defects in the act, the mutual agreement procedure for double taxation.
For cases within the European Union, Directive (EU) 2017/1852, transposed into the Tax Procedure Code, and the Arbitration Convention 90/436/EEC for transfer pricing provide for mandatory arbitration if agreement is not reached within the time limit set, usually two years. The advisory commission issues an opinion which the authorities implement. For third countries, arbitration exists only if the treaty or the multilateral instrument provides for it.
Through the settlement decision issued by ANAF, which amends or cancels the tax administrative act to the extent of the agreement, with a refund of the tax overpaid, and, under the reform, with the competent authority able to depart from the findings of the initial tax inspection, in line with the treaty.
There is no statutory time limit for completing the classic procedure; in practice it takes years, depending on complexity and on the other state. The European framework imposes time limits: admissibility within six months, agreement within two years, extendable by one, then arbitration. A well-built application, with the legal position and the figures reconciled, shortens the procedure more than anything else.
Informative material, updated on 18 September 2026. It does not constitute legal or tax advice; individual situations must be assessed on their own facts.
If the situation involves income, accounts or residence in another country, the related analyses are grouped under the international tax analyses. For assistance on such matters, see international taxation.
An initial discussion establishes the basis for the procedure, the time limit running, coordination with the administrative appeal and the court, and what an application needs to contain to reach an agreement, not just the registry.