OUTSOURCING OF TAX SERVICES: THE CASE OF ROMANIA

ISIP Adrian, Bucharest University of Economic Studies

Abstract:
Taxation is an important component of the business strategy and every person and company would like to pay lower taxes and still be compliant with the fiscal legislation. This paper investigates the outsourcing of tax services for natural persons, SMEs and large companies. We employed a qualitative approach using Core competences theory as theoretical framework, business environment from Romania as context and semi-structured interviews as research method. The interviews involved accounting firms and clients. The results indicated that in case of tax services outsourcing, external accountants and tax advisors help their clients to make the tax planning, improve their compliance and reduce the tax risks. Natural persons often outsource the tasks regarding taxation due to a lack of time and expertise. Outsourcing of tax services like outsourcing of accounting services is very common in small companies and smaller medium-sized enterprises for cost reduction reasons and their main interest is to comply with the fiscal law and lessen their tax burden. In larger medium-sized enterprises and large corporations the volume, variety and complexity of transactions are high and because of that so are the tax risks. In order to mitigate the tax risks, avoid fines and penalties, some of these companies resort also to external tax services such as verification or preparation of tax returns, tax reviews, ongoing support on fiscal issues, assistance and representation during fiscal inspections. International companies regardless of their size are more open to collaborate with external accountants and tax advisors. Due to recent introduction of SAF-T as declarative obligation, companies expect an increase in their tax compliance costs since they have to employ external support in a greater extent. Showing, the importance and the role of external accountants and tax advisors for persons and companies running businesses in Romania represents the main contribution of our study.

Keywords: external tax advisor, outsourcing of tax services, tax compliance, tax planning, tax reporting

JEL Classification: H25, M40, M55

Volume: 74, Issue: 3

Pages: 50 - 70

Publication date: October, 2022

DOI: 10.56043/reveco-2022-0025

Download the article: http://economice.ulbsibiu.ro/revista.economica/archive/74305isip.pdf

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