If your Romanian subsidiary belongs to a larger group, transfer pricing applies to it regardless of size — the duty comes from association, not scale. Picture a Romanian company with ten employees, distributing the group's products locally, that receives an audit order. The finance director is relaxed: "we're a small company, transfer pricing is for multinationals." Months later, the tax assessment says otherwise: the distribution margin was below the "market" range rebuilt by the audit, and the difference — imposed across all audited years — becomes an additional taxable base of several hundred thousand lei, plus ancillary charges. The pricing policy was not set in Brașov, but at group headquarters. The consequence, however, is borne by the Romanian subsidiary.
The confusion has an apparent logic: transfer pricing is associated with multinationals, with files of hundreds of pages and adjustments of millions. From there, the wrong leap — "it doesn't apply to us".
In reality, the arm's length principle in Article 11 of the Fiscal Code applies to any transaction between related parties, regardless of the size of the company involved. A small company in a large group transacts, by definition, with related parties — and each such transaction falls under the arm's length principle. The company's own size does not take it out of scope; at most, it changes the way in which it documents its duty.
The element that triggers the regime is association, defined by Article 7 of the Fiscal Code. Related parties are, in essence, companies linked by ownership — one company holds, directly or indirectly, a significant part of the other's capital or voting rights — or by common control. Once association is established, any transaction between the two entities — sale of goods, provision of services, loan, royalty — must comply with arm's length value.
The essential distinction is between the substantive duty and the documentation duty. The substantive duty — to comply with arm's length value — always exists, for any transaction with related parties. The documentation duty — to prepare and present the file — depends on thresholds.
A point often missed: association can exist even without a direct holding between the two companies that transact. Two "sister" companies, held by the same parent, are related to each other; likewise, common control creates association. For the small company, this means that not only the relationship with the parent is in play, but transactions with any other entity in the group. Group structure and association connect directly to the choice of a Romanian or foreign holding.
Under OPANAF No. 828/2026 (Official Gazette No. 543 of 2 July 2026, applicable to 2026 transactions and to administration procedures initiated after 1 January 2027), the documentation regime is layered.
Above the thresholds set for their category, they prepare the file annually and submit it through the Virtual Private Space, without waiting for a request.
Including small and medium companies: they do not file the file annually; they present it at ANAF's request, during an audit, if the transactions exceed the materiality thresholds — within a fixed deadline from the communication of the request.
There is no duty to prepare a formal file — but the duty to be able to justify compliance with arm's length value, at the tax authority's request, remains.
The new order also changes the way the thresholds are measured: not by the aggregate value of all transactions with all related parties, but for each transaction, with each related party. For intra-group services, the materiality threshold has been lowered — for large taxpayers, the services threshold is EUR 100,000, and for small and medium taxpayers it has been set at a lower level. The practical consequence: a small company can fall within the documentation duty for a single category of transactions — say, the services received from the parent — even if the rest of the relationship with the group remains below the thresholds.
The absence of a duty to file a file does not mean the absence of a duty to comply with arm's length value. This is exactly the error that produces adjustments at small companies: "we're not required to have a file, so we're fine." False. At audit, ANAF can require justification of the prices applied with related parties — and if the margin does not fall within the market range and there is no documentation, the authority estimates the price and adjusts. Without a minimum of documentation, the small company starts the discussion from the weakest position possible.
Buys from related parties and resells locally. The risk: a distribution margin too low against the market range — the classic ground for adjustment.
IT, support, marketing, contract research, invoiced to the group. The risk: a cost-plus margin too low (profit moved out of Romania) or, conversely, too high.
The expense for management services, deducted without proof of actual rendering and of the benefit — the first to be rejected at audit.
Performs for other group companies at centrally set prices. The risk: a price uncorrelated with the real functions and risks.
If the distributor's operating margin is below the range of comparables, the audit raises it to the median and imposes the difference across the whole flow. At volume, even a few percentage points mean large amounts. It is defended with the benchmarking study.
Management services invoiced by the parent, deducted without deliverables, without proof of the benefit and without a reasonable allocation key, are the first target. Without economic substance behind them, the expense falls.
An intra-group loan with interest uncorrelated with the debtor's creditworthiness and market conditions attracts an adjustment of the deductible interest — on top of the general rules limiting the deductibility of financing costs.
The minimum protection is not a multinational's file, but a proportionate and coherent set: documentation of transactions with related parties — a clear record of the flows (who, what, how much, on what terms); justification of prices — why the margin, interest or rate applied is "at market", at least a basic analysis; and intra-group contracts — with certain dates, reflecting the functional reality, not unsigned template contracts. This minimum turns the discussion at audit from "you have nothing" into "here is the basis on which we set the price" — a difference that often decides whether an adjustment arises, and how the position is defended at audit.
DAC6: even small transactions can be reportable. Certain intra-group arrangements with a cross-border element fall within the DAC6 reporting duty, regardless of the size of the amounts: reportability depends on the existence of a "hallmark" — for instance, the transfer of functions or of hard-to-value intangibles between related parties — not on a value threshold. A small company can therefore be part of a reportable arrangement without realising it, and non-reporting carries its own penalties.
For large and recurring flows, even an advance pricing agreement (APA) can become worthwhile. For the small company, the equation is usually clear: preventive documentation is far cheaper than later repair — an adjustment imposed across several years, with ancillary charges and, in the cross-border case, a risk of double taxation.
Here lies the structural unfairness: the small company bears the consequence of a pricing policy set at group level. The margin policy comes from headquarters; the adjustment, interest and penalties are imposed on the Romanian company. And the local director signs the returns and answers to ANAF — recovering the cost from the group remains an internal, contractual matter that does not release the director from liability before the tax authority.
This is why the finance director cannot treat transfer pricing as "the group's problem". A few questions must be put explicitly to the group, in writing: what pricing policy applies to our transactions and on what analysis it rests; whether a benchmarking study supports the margin imposed on the subsidiary and whether we can obtain it; who prepares and updates the file for the Romanian entity; whether our position is consistent with the group's master file; and who bears, contractually, any adjustment caused by the group policy.
Yes. Below the threshold, the duty to prepare a formal file disappears, but not the duty to comply with arm's length value and to be able to justify it on request. A minimum of documentation — a record of transactions with related parties, a justification of prices, the contracts — places you on the defensive footing at audit.
Because the tax obligation belongs to the Romanian company, and the local director signs the returns and answers to ANAF. The adjustment, interest and penalties are imposed on the subsidiary, wherever the margin policy was decided. Recovering the cost from the group is an internal, contractual matter that does not protect you before the tax authority.
Three things: a distribution margin below the market range, management fees deducted without proof of actual rendering, and interest on the loan from the parent uncorrelated with the market. All can be prevented through documentation and by correlating prices with the company's real functions and risks.
Yes. DAC6 reportability depends on the hallmarks of the cross-border arrangement, not on the size of the amounts. A small company in a group can be part of a reportable arrangement — for instance a transfer of functions or of hard-to-value intangibles between related parties — and must check the duty together with the group.
Informational material, updated on 18 July 2026. It does not constitute legal or tax advice; individual situations must be analysed on their specific facts.
Time limits run from the moment of communication. An initial discussion clarifies what is being alleged, what you must justify and how the defence is built — before an estimate becomes a tax assessment.