TAXATION

CHAPTER III TAXATION LEGAL RELATIONSHIP

3.1. Taxation legal relationships subjects 3.2. The content of taxation legal relationship 3.3. The tax claims and the tax liabilities 3.4. Another participants in the taxation legal relationships

The legal relationship is, in fact, a social relationship, enforced by law, in which participants (subjects) manifests as owners of rights and obligations that can be realized if necessary, by coercion from the state. Therefore, the legal tax law includes all rights and obligations of the parties in enforcing tax laws. The content of this relationship is given by the financial relationships formed during the process of levying and collecting of taxes, charges and other contributions due the state general budget. The nature of this relationship is obligatory, in its contents entering: the right to claim what belongs to the active subject, which is the creditor; its correlative, ie the passive side of the relationship, representing the tax liability that belongs to the passive subject, who is the debtor. 3.1. Taxation legal relationships subjects

The subjects of taxation legal relationship are: The state and local authorities, as active subjects who have the right to control, calculate, receive and verify the payment of tax liabilities; The taxpayer, as passive subject who has the obligation to pay on time his tax liabilities. The State is represented by the Ministry of Public Finance through National Agency for Fiscal Administration (NAFA) and by the local governments who are represented by the local pubic administration authorities, as well as their specialized departments, within their limit of jurisdiction.

TAXATION
The taxpayer may be any individual (natural person) or legal person or any entity without legal personality who has to pay taxes, charges, contributions and other amounts due to the general public budget. In the relations generated by the taxation legal relationship, the taxpayer may participate directly or by representation. If the taxpayer is not a Romanian resident he has the obligation to file tax receipts to tax authorities and to select a person for representation, person who has to be a Romanian resident and has to fulfill his obligations to the tax authorities. In the absence of a representative, the tax authorities will ask the court to appoint a tax curator for the absent taxpayer whose domicile is unknown or who, because of illness, infirmity, old age or disability of any kind can not exercise personal rights and to fulfill its obligations according to the law.

3.2. The content of taxation legal relationship

All the rights and obligations of the subjects under the legal norm governing the legal relationship are forming its content. Regarding the content of procedural law tax relationship, the main obligation of the taxpayers is the declaration and payment of taxes and social contributions they owe to general consolidated budget. Also, taxpayers are required to complete the tax records requested by law, to determine their actual fiscal situation and tax obligations owed. In this context, taxpayers are responsible for: Showing their income and expenses, related to their activities, by completing the records or any other documents required by law; using accounting and legal documents required by law for their activity; filling all the fields in the forms used according to the recorded transactions.

The tax records are all the records, statements and any other documents which, according to tax laws should be completed mandatory in order to establish the tax situation and tax claims and tax liabilities. Rights and obligations of the taxpayer are manifested especially during the control carried out by the tax authorities (tax audit) conducted in order to verify the tax base, tax returns legality, fairness and accuracy of taxpayers obligations, compliance with tax laws, as well as calculating the differences in payment obligations.

TAXATION
The taxpayer can be verified for taxes and social contributions only within a limited period of time, specified by law. At the start of tax audit, the tax authoritys agent is required to submit to the taxpayer a badge and the work order signed by the head of the tax authority; otherwise taxpayers are entitled to ask their legitimacy. Corollary of this right for the taxpayer is required to give access to tax authorities agent in the business premises. Regardless of the tax audits location, the tax auditor has the right to inspect any business premises of the taxpayer or any other premises or places where are taxable goods or income-producing activities, but only in his presence or a person designated by him. The taxpayer is required to ensure adequate space and logistics necessary to carry out the tax audit. Throughout the tax inspection, the tax authorities agent is legally required to inform the taxpayer about the tax audit findings. To determine the actual tax situation, the taxpayer is required to provide the tax authorities' accounting records and any other relevant documents for the tax audit. Tax auditor has the right to request documents also to other persons, if the tax situation was not clarified on the basis of documents provided by the taxpayer. Also, the taxpayer is required to provide information and to supply at tax inspection all documents and any other data necessary to clarify the relevant factual statements for tax purposes, and at the end of tax audit - the obligation to give a written statement under oath, showing that were provided all relevant documents and information for the tax audit. Throughout the exercise of a tax audit, the taxpayer is entitled to legal assistance or professional counsel. Every taxpayer is entitled to be protected on the basis of tax secrecy. The information they provide to tax inspection bodies and those which they obtained during the inspection are protected tax on the basis of tax secrecy. In this sense, public servants within the tax authorities, including people no longer having that status, are obliged to keep secret the information that they have as a result of the exercise of duties. The taxpayer is entitled to submit in writing its views on tax audit findings but also the legal obligation to fulfill the measures set out in the document prepared after the tax audit, in the terms and conditions established by tax auditors. It also has the obligation to pay the difference of taxes, fees, or social contributions established by tax inspectors, as well as interest and penalties for the delay.

TAXATION
If the taxpayer disagrees with the outcome of tax audits, has the right to appeal the tax decision issued on this occasion by the tax auditor.

3.3. Tax claims and tax liabilities

Tax claims are those property rights resulting from the taxation legal relations and they are grouped into: principal tax claims arising from the right to collect taxes, duties, contributions and other amounts representing general budget revenues, the right to reimbursement of value added tax, the right to refund taxes, fees, contributions and other amounts revenue for general budget; related tax claims which, as it is shown by their name, depend on the principal tax claims and which are, in fact, tax penalties imposed for failure to pay the principal tax claims. In correlation to tax claims, there are the tax obligations which are characterized as any obligations for the taxpayers, individuals or legal persons, resulting from tax legislation. Among the most important tax obligations are: obligation to declare the goods and taxable income or, where applicable, taxes, fees, contributions and other amounts owed to the general consolidated budget; obligation to calculate and record in accounting all taxes, fees, contributions and other amounts owed to the general consolidated budget; obligation to pay within the legal deadlines the taxes, fees, contributions and other amounts owed to the general budget; obligation to pay delay penalties related to taxes, fees, contributions and other amounts owed to the general budget, named auxiliary payment obligations; obligation to calculate, retain and record in accounting, within legal deadlines, taxes and contributions, which are paid by withholding at source. The claims right regarding taxes and corresponding tax obligations begin when, according to the law, their tax base is generated.

3.4. Participants in the taxation legal relationships

Participants in the taxation legal relationships are:

TAXATION
persons owning claim rights, i.e. creditors; persons who are required to pay these claims, i.e. debtors. Tax Procedure Code states that the tax authority is entitled to claim the tax liability to the person who must execute this obligation instead of the principal debtor, thereby creating a new category of tax debtors who, although not directly forced to pay the debts, are treated as such, having a subsidiary liability to the principal debtors. Moreover, the general rule is that any debt is settled if anyone makes the payment. The obligations of subsidiary debtors become liable only if the payment obligation was not fulfilled by the principal debtor. Thus, if the obligation was not fulfilled by the principal debtor, as debtor may become: heir who has accepted the succession of the taxpayer debtor; the acquirer, in whole or in part, of the rights and obligations of the debtor subject to merger, acquisition or legal reorganization; person whos liability was determined in accordance with the bankruptcy law; person who assumes the debtor's payment obligation by payment of a commitment or an other act, with a collateral to ensure the payment obligation; legal person for tax liabilities owed by its secondary offices/branches; The obligation to pay for the debtor-taxpayer takes place because they have acquired, in whole or in part, his property. Shifting obligations on successors has one exception, namely the obligation to pay for fines of individuals, since for those obligations the heirs do not become debtors and are not obliged to pay, given the nature intuitu personae of these obligations. Regarding the person who assumes the liability of the debtor, we are dealing with a conventional surety that must be signed between the debtor, creditor and fidejusor ensuring that the debtor will execute. Where the surety regards a principal obligation, the obligation guarantee extends also to all its auxiliaries, i.e. late payment penalties. Unlike the debtor, the payer of the tax liability category is much broader, and may contain other persons. Thus, payer of the tax liability can be both the debtor and the person who, in the name of the debtor is obliged to pay or withhold and pay, as applicable, taxes, fees, contributions, fines and other amounts owed to the general budget.