On 13 March 2026, the Romanian Ministry of Finances published Order no. 203 (Order no. 203/2026 or the Order), clarifying how constituent entities subject to Law no. 431/2023, which introduced a 15% global minimum corporate tax, should present deferred taxes. The Order applies to multinational enterprise (MNE) groups and large domestic groups that must ensure a global minimum level of taxation. It clarifies the requirements for presenting deferred taxes in financial statements prepared in accordance with Romanian Accounting Regulations approved by Order of the Ministry of Finance No. 1802/2014 (OMFP no. 1802/2014)and outlines the procedures for transitioning to accounting regulations compliant with the International Financial Reporting Standards (IFRS), as approved under Order of the Ministry of Finance No. 2844/2016 (OMFP no. 2844/2016).

Background

Law no. 431/2023 transposes into Romanian legislation the rules on ensuring a global minimum level of taxation for MNE groups and large-scale domestic groups with consolidated revenues of at least €750m in at least two of the four financial years immediately preceding the relevant financial year. For in-scope entities, the determination of adjusted covered taxes requires specific consideration of deferred taxes. The Romanian accounting regulations approved by OMFP no. 1802/2014 do not include provisions for computing and recognizing deferred taxes.

Government Ordinance no. 21/2025, updating Law no. 431/2023, requires entities applying OMFP 1802/2014 that are subject to domestic top-up tax to compute and present deferred taxes in the notes to their financial statements prepared in accordance with OMFP no. 1802/2014. Alternatively, a new option was introduced for entities in scope of global minimum tax to apply IFRS for statutory accounting purposes.

Order no. 203/2026 provides clarifications for computing and disclosing deferred taxes and for transitioning to accounting regulations compliant with IFRS.

Provisions applicable to entities applying OMFP no. 1802/2014

Constituent entities that apply the rules for calculating the domestic top-up tax under Law no. 431/2023 and prepare stand-alone financial statements under OMFP no. 1802/2014 must calculate and disclose deferred taxes in the explanatory notes to their annual financial statements, without recognizing these deferred taxes in the accounting records.

Deferred tax assets and liabilities must be determined in accordance with International Accounting Standard (IAS) 12, Income Taxes, although the disclosure requirements set out in IAS 12 do not apply. Deferred tax disclosed in the explanatory notes must be determined by reference to the carrying amounts of balance sheet items under OMFP no. 1802/2014 and their corresponding tax bases. Deferred tax related to the profit or loss for the financial year must be presented separately from deferred tax related to retained earnings.

These provisions apply starting with annual financial statements for the 2025 financial year; entities that apply a financial year different from the calendar year shall apply the provisions starting with the first elected financial year beginning after 1 January 2025. The provisions also apply to units without legal personality in Romania belonging to legal entities established in the European Union (EU), as well as to permanent establishments in Romania of EU legal entities; these entities shall disclose deferred tax in Form code 30 "Informative data," which forms part of the annual accounting reporting package.

Entities that cease to fall within the scope of Law no. 431/2023 may no longer apply the deferred tax presentation provisions starting with the annual financial statements for the financial year in which they cease to meet the relevant criteria.

Provisions applicable to entities that opt to apply IFRS

For constituent entities that opt to apply accounting regulations compliant with IFRS, approved by OMFP no. 2844/2016, the Order provides the following guidance:

• Constituent entities may transition to the application of OMFP no. 2844/2016 starting with the annual financial statements for the 2025 financial year, provided they assess that they have the capacity to apply those regulations; accounting records must be organized and maintained under OMFP no. 2844/2016 starting with the 2026 financial year.
• Entities that transition to OMFP no. 2844/2016 after 01 January 2026 must apply the provisions of the Order as of that date.
• For purposes of preparing the transition financial statements, entities must apply IFRS, including IFRS 1, First-time Adoption of International Financial Reporting Standards.
• Entities that apply a financial year different from the calendar year must apply the provisions starting with the first elected financial year beginning after 1 January 2025
• During the period in which Law no. 431/2023 applies, constituent entities determining deferred taxes under OMFP no. 2844/2016, shall ensure continuity in applying those accounting regulations.
• Entities that no longer fall within the scope of law no. 431/2023 may continue to apply OMFP no. 2844/2016 or may revert to applying OMFP no. 1802/2014.

Effective date

The above provisions apply starting with annual financial statements for the 2025 financial year, with specific application rules depending on the accounting framework used and the entity's financial year.

Implications

MNE groups should assess the interaction between the applicable accounting framework, the legislative requirements related to deferred tax disclosures and the Base-Erosion and Profit Shifting (BEPS) Pillar Two compliance process. Planned transition to IFRS should be viewed as a strategic decision, with implications for reducing financial reporting efforts and improving internal processes, while enabling alignment of accounting policies across the group and enhanced comparability and consistency in financial data in international markets.