Senate Backs Bill Making Intra-Group Services Non-Deductible from 2027

29 October 2026 · ACSINTE & PARTNERS

What changed

On 21 October 2026 the Romanian Senate adopted, as first chamber, bill L481/2026 (Propunere legislativă pentru completarea art. 25 din Legea nr. 227/2015 privind Codul fiscal), with 57 votes in favour, 14 against and 19 abstentions. The bill now goes to the Chamber of Deputies, the decisional chamber. It is not yet law.

The adopted text adds two new categories to Article 25 of the Fiscal Code (Law no. 227/2015), which governs the deductibility of expenses for corporate income tax purposes:

• New letter o) in Article 25(3) – limited deductibility of intra-group interest. Interest, other costs economically equivalent to interest and late-payment surcharges on loans contracted intra-group would be deductible only up to the average interest rate on the financial market of the lender's state of residence, plus a fixed margin of at most 1%.
• New letter w) in Article 25(4) – non-deductible intra-group services. Expenses for management, consultancy and assistance services, and for the transfer of intellectual property rights, under intra-group contracts would become fully non-deductible.

Under Article II of the bill, the new rules would enter into force on 1 January 2027. The bill was initiated in May 2026 by 79 members of Parliament from the AUR group; the Senate's Budget, Finance, Banking and Capital Market Committee reported it favourably on 12 October 2026 without amendments.

The bill is controversial. In its point of view of August 2026, the Government stated that it does not support the initiative. It argues that Article 402 of the Fiscal Code, which transposes the interest-limitation rule of the Anti-Tax Avoidance Directive (Council Directive (EU) 2016/1164), already restricts the deduction of borrowing costs, including intra-group financing, and is already stricter than the EU minimum for affiliated-party transactions (a cap of EUR 500,000 instead of EUR 1,000,000). For services, Article 11 of the Fiscal Code (economic substance, arm's-length principle) and the transfer-pricing rules already allow the tax authorities to deny deductions for services that were not rendered, not necessary or not priced at market value. An automatic ban, the Government says, would be disproportionate, discriminatory and at odds with the OECD Transfer Pricing Guidelines. The Economic and Social Council also issued a negative opinion; the Legislative Council's opinion was favourable.

Who is affected

If adopted in this form, the measure would touch every Romanian corporate income tax payer that belongs to a group and buys services or borrows money from other group entities. In practice this means, first of all, Romanian subsidiaries of foreign groups that pay management fees, shared-service charges, technical assistance fees, royalties or licence fees to their parent or a regional hub, and that are financed through intercompany loans or cash pooling. Romanian-owned groups with a holding or shared-service company would be affected in the same way, since the text does not distinguish between domestic and cross-border arrangements and does not define "intra-group".

The two measures work differently. The interest cap is a limitation: interest within the ceiling remains deductible, subject to the existing Article 402 limits. The services rule is an outright exclusion: the fee would be non-deductible even if the service was real, necessary and priced at arm's length. The additional corporate income tax cost would be 16% of the fee. Micro-enterprise taxpayers, taxed on turnover, would not be directly affected.

What companies should do now

1. Map the exposure. List all intra-group contracts in force in Romania for management, consultancy, assistance and IP (licences, royalties, know-how), together with all intercompany loans and cash-pooling agreements, with the amounts paid in 2025 and budgeted for 2027. This gives a concrete figure for the additional tax cost if the bill passes unchanged.
2. Strengthen the file you already need. Whatever the outcome, the Government's opinion is a reminder that intra-group services and financing are already subject to the economic-substance test of Article 11, transfer-pricing documentation and the Article 402 interest limitation. Benefit tests, evidence that services were actually rendered and benchmarking of intercompany interest rates should be up to date before the 2026 year-end closing.
3. Follow the Chamber of Deputies and prepare alternatives. The decisional chamber can amend, narrow or reject the text, and companies and business associations may submit views through the parliamentary committees. In parallel, review contract structures (direct contracting with third-party providers, re-invoicing at cost, replacing debt with equity) so that a decision can be taken quickly if the law is promulgated with effect from 1 January 2027.

Key dates

• 28 May 2026 – bill registered with the Senate (b348/2026, later L481/2026).
• August 2026 – negative opinions of the Economic and Social Council and of the Government.
• 21 October 2026 – adopted by the Senate; sent to the Chamber of Deputies (decisional chamber).
• 1 January 2027 – proposed entry into force, if the law is adopted, promulgated and published in the Official Gazette.

Open questions

The adopted text does not define "intra-group" and does not refer to the Fiscal Code notion of affiliated persons, so the scope is uncertain. It does not say how the interest cap would interact with the existing Article 402 limitation, nor whether the services rule would apply to contracts concluded before 1 January 2027. Compatibility with EU law (freedom of establishment, the harmonised ATAD framework) and with Romania's double tax treaties is also likely to be raised in the Chamber of Deputies and, if the law is adopted, before the Constitutional Court.

This article provides general information and does not constitute legal advice.