Preliminary assessment of the third payment request of Romania (2024)

of the Time: Q4 2022 law on Defence and Cyber and Security of Romania Context: Milestone #151 is part of reform C7.R3, which aims to continue the process of strengthening the resilience of the public and private entities owning critical infrastructure against cyber risks. Milestone #151 requires the entry into force of the law on Defence and Cyber Security of Romania to establish the legal and institutional framework for organising and conducting activities in the fields of cybersecurity and cyber defence, cooperation mechanisms and responses of institutions in the fields concerned. Milestone #151 is the second and last step in the implementation of reform C7.R3 and follows milestone #150 on the adoption of the National Cybersecurity Strategy 2021- 2026, assessed as fulfilled in the context of the first payment request. Therefore, reform C7.R3 had the final expected date for implementation in Q4 2022. Evidence provided: The following evidence was provided: i. Summary document duly justifying how the milestone (including the relevant elements of the milestone, as listed in the description of milestone and of the corresponding measure in the Council Implementing Decision annex) was satisfactorily fulfilled; ii. Copy of the publication of Law No. 58/2023 on Defence and Cyber Security in Romania in the Official Journal No. 214, issued on 15 March 2023; Analysis: The justification and substantiating evidence provided by the Romanian authorities cover all constitutive elements of the milestone. The Law on Defence and Cyber Security of Romania shall establish the legal and institutional framework for organising and conducting activities in the fields of cybersecurity and cyber defence, cooperation mechanisms and responses of institutions in the fields concerned. Law No. 58/2023 on Defence and Cyber Security in Romania (hereinafter referred to as the “Law”) was published in the Official Journal No. 214 of 15 March 2023.2 According to the provisions in Article 12(1) of Law No. 24/2000 on the rules of legislative technique for the drafting of legislative acts, the Law on Defence and Cyber Security of Romania entered into force three days after its publication in the Official Journal. The Law lays down the legal framework for organising and conducting activities in the fields of cybersecurity and cyber defence. In particular, its Chapter I – General provisions – lays down the networks and informatic systems covered by the Law (Article 3), objectives (Article 4) and principles to ensure cyber security and defence (Article 5). Moreover, the Law includes several provisions that establish the institutional framework. For the purpose of organising and carrying out activities specific to cyber security in a uniform manner at national level, Article 6 of the Law establishes the National Cyber Security System (CNSS) as the general framework for cooperation between the authorities referred to in Article 10(1). Furthermore, articles 10 to 19 of the Law describe the competent authorities and their respective responsibilities. 2 the entry into force of this law is without prejudice to Romania’s obligation to carry out the complete and correct NIS2 transposition In addition, the Law provides details regarding the cooperation mechanisms and responses of institutions. To this extent, Articles 20 to 26 of the Law describe the management of incidents and cyber resilience. Moreover, Chapter V of the Law lays down information regarding the national system of cyber alert, a set of technical and procedural measures aimed at preventing, deterring and combating actions or inactions that may constitute vulnerabilities, risks or threats to Romania’s cybersecurity. Information regarding the procedures for conducting research, development and innovation in cyber security are presented in Articles 32 to 33 of Chapter VII of the Law, while Chapter VIII focuses on the cooperation in the fields of cyber security and cyber defence, thereby establishing the framework for cooperation mechanisms, as required by the description of the milestone in the Annex to the Council Implementing Decision. Commission Preliminary Assessment: Satisfactorily fulfilled Related Measure: Increasing digital competence for public service and digital Number: 152 education throughout life for citizens Name of the Milestone: Entry into force of the ministerial order of the Minister of Labour and the National Institute of Statistics President for the definition of new digital occupations in the Classification of Occupations (COR) Qualitative Indicator: Provision in the order of the Minister of Labour and National Institute of Statistics President indicating the entry into force of the Time: Q3 2022 amendment defining new digital occupations in the COR. Context: Milestone #152 is part of reform C7.R4, which aims to support the digitalisation of the economy and the transition to industry 4.0 and to align the labour market to the latest developments in this sector. Milestone #152 requires that a ministerial order of the minister of Labour and the National Institute of Statistics President define the new digital occupations present in the Romanian Classification of Occupations (COR) equivalent to those existing in the countries of the European Union, in line with good practices in digitalisation. In addition, it requires that a diagnosis study/analysis shall be carried out to forecast labour needs in the context of the digital transformation of the economy and the transition to industry 4.0 for the next five years. Milestone #152 is the only step in the implementation of reform C7.R4. The implementation of the reform shall be completed by 30 September 2022. Evidence provided: The following evidence was provided: i. Cover note duly justifying how the milestone was fulfilled; ii. Copy of the publication in the Official Journal No. 880 of 7 September 2023 of the Ministerial Order of the Minister of Labour and the National Institute of Statistics President No. 1348/784, on defining new digital occupations in the Occupations Classification of Romania (hereinafter referred to as the “Ministerial Order”); iii. Annex: Analysis Study conducted to provide a forecasting for the next five years of the labour needs in the context of the digital transformation of the economy and the  transition to industry 4.0. Analysis: The justification and substantiating evidence provided by the Romanian authorities cover all constitutive elements of the milestone. The ministerial order of the minister of Labour and the National Institute of Statistics President shall define the new digital occupations at the level of the Romanian Classification of Occupations (COR) equivalent to those existing in the countries of the European Union with good practices in digitalisation. Article I of the Ministerial Order amends the Romanian Classification of Occupations (COR), complementing it with new occupations within the national economy. The new occupations included in the ministerial order are: • blockchain architect • digital games designer • developer user interface • blockchain developer • digital game developer • expert on search engine optimisation • complex data engineer (big data) • integration engineer • cloud engineer • computer vision engineer • web Content Manager • smart information systems designer for ICT • ICT technician According to the provisions in the Article 12(X) of Law No. 24/2000 on Legislative technique, the Ministerial Order of the Minister of Labour and the National Institute of Statistics President No. 1348/784 entered into force on the date of its publication in the Official Journal. A diagnosis study/analysis shall be carried out to provide a forecasting for the next five years of the labour needs in the context of the digital transformation of the economy and the transition to industry 4.0 including recommendations for defining new digital occupations in the official classification of occupations. To support the provisions of the Ministerial Order, the Romanian authorities elaborated a diagnosis strategy, based on the most recent market information and on the direct discussions with the relevant stakeholders (industry representatives, academic community members, government representatives etc.). This study was undertaken to provide a forecasting of the labour needs for the following five years (2022-2027), in the context of the digital transformation of the economy and the transition to industry 4.0 (pages 22 – 34), including recommendations to define new digital occupations in the official classification of occupations. The analysis carried out highlighted a number of key needs in the preparation of the Romanian labour market, to embrace the full benefits of the industrial revolution brought about by Industry 4.0 and to enable digital, technological transformation and progress of Romanian society, as a whole (pages 35 – 56). In light of the particularities of the labour market in Romania and the new information and communication technologies present on the Romanian market, the study recommends thirteen new occupations equivalent to those existing in EU countries and in line with good practices in digitalisation to be added in the Romanian Classification of Occupations (COR) (pages 58 – 61). These new occupations are the ones enumerated above and included in the Ministerial Order. Commission Preliminary Assessment: Satisfactorily fulfilled Related Measure: Reform of the National Agency for Fiscal Administration Number: 192 (ANAF) through digitalisation Name of the Target: Additional legal person taxpayers enrolled in SPV Quantitative Indicator: Number Baseline: 509 679 Target: 1 009 679 Time: Q4 2022 Context: Target #192 is part of reform C8.R1, which aims at modernising and digitalising the National Agency for Fiscal Administration (ANAF) to make tax collection more efficient, with the objective of increasing the revenue-to-GDP ratio and reducing the VAT gap. Target #192 requires that at least 500 000 legal person taxpayers are additionally enrolled in the Private Virtual Space (SPV) compared to the 509 679 at the beginning of April 2021. Target #192 is the second step in the implementation of this reform, and it is accompanied by milestones #193 and #194 in this payment request, which cover the entry into force of the legal framework defining the risk criteria for the classification of taxpayers and an amended legal framework in the field of activity of tax inspections body. Target #192 will be followed by targets #196 and #197 related to the increase in the share of revenues collected by ANAF by at least 2.5 percentage points of GDP and the reduction of the VAT gap by 5 percentage points respectively. The reform has a final expected date for implementation on 30 June 2026. Evidence Provided: The following evidence was provided: i. Summary document duly justifying how the target (including all the constitutive elements) was satisfactorily fulfilled; ii. Annex 1 to the summary document (part 1 to 9) including the list of additional legal person taxpayers enrolled in the SPV since April 2021 (PDF and Excel format); iii. Copy of the Order of the President of ANAF No. 1721/2021, regarding the organisation of the large taxpayers' administration activity, published in the Official Journal No. 1051 on 3 November 2021 (hereinafter referred to as "the ANAF Order No. 1721/2021”); iv. Copy of the Order of the President of ANAF No. 83/2022, for amending and supplementing the ANAF Order No. 1721/2021 (hereinafter referred to as “the ANAF Order No. 83/2022”); v. Copy of the Order of the President of ANAF No. 220/2022 approving the RRP at the level of ANAF and its Annex, that entered into force on 15 February 2022; vi. Copy of Government Ordinance No. 11/2021, for amending and supplementing Law No. 207/2015 regarding the Fiscal Procedure Code and regulating certain fiscal measures, published in the Official Journal No. 832 on 30 August 2021 (hereinafter referred to as “Government Ordinance No. 11/2021”); vii. Note No. MCB 1165/2024 issued by ANAF and its annex regarding the number of entities  enrolled in the SPV and the total number of active companies on 31 December in the years 2021, 2022, and 2023 (hereinafter referred to as “Note No. MCB 1165/2024”) viii. ANAF report on the total number of large entities enrolled in the SPV in 2022, ix. List of large taxpayers that will be managed by the General Directorate for the Administration of Large Taxpayers starting from 1 January 2022, according to the selection criteria provided by ANAF Order No. 1721/2021 (hereinafter referred to as “List of large taxpayers”); x. Copy of the report resulting from the query of databases by the National Centre for Financial Information for the period April 2021 – December 2022; xi. On the basis of a sample selected by the Commission the following documentary evidence was submitted for 60 selected legal person taxpayers enrolled in SPV and 60 large taxpayers enrolled in SPV: a. extract of the last operation performed by the legal entity in the SPV, as extracted from the SPV database. Analysis: The justification and substantiating evidence provided by the Romanian authorities cover all constitutive elements of the target. Specifically: At least 500 000 legal person taxpayers additionally enrolled in SPV compared to the 509 679 at the beginning of April 2021. According to Annex 1 of the summary document, which includes a list of additional legal person taxpayers enrolled in the SPV, between 1 April 2021, when 509 679 legal person taxpayers were enrolled in SPV, and 18 December 2022, 585 199 additional legal person taxpayers were enrolled in SPV, exceeding the required 500 000. The SPV represents a free, permanently accessible service that offers a range of benefits to its users, such as: (i) information regarding tax obligations, (ii) the possibility to receive administrative tax documents and other documents, (iii) information regarding social contributions, and (iv) access to other electronic services offered by SPV. Following the selection of a random sample of 60 legal person taxpayers, Romania submitted an extract from the SPV detailing the most recent operation conducted by each of these taxpayers. The analysis of the extracts shows that these correspond to the sample selected by the Commission. Specifically: 60 records extracted from the SPV database: in addition to the data submitted as evidence for the whole population of 585 199, additional legal person taxpayers enrolled in the SPV (which includes the sequence number, the NUTS3 region, fiscal administration unit, type of entity, and the date of registration to the SPV), the Romanian authorities provided two additional columns of information extracted from the SPV for the selected sample. These additional columns contain: (i) a description of the latest operation conducted in the SPV and (ii) the time of the last operation in the SPV (including date and hour), as extracted from the SPV. The verification of the data on the sequence number, NUTS3 region, fiscal administration unit, type of entity, and the date of registration to SPV, confirmed that the submitted evidence belongs to the taxpayers selected as a sample by the Commission. The evidence provided for the sample of 60 units confirmed that the additional legal person taxpayers are enrolled in the SPV. On the basis of the evidence provided, a statistical analysis was carried out comparing the reported 585 199 additional legal persons taxpayers enrolled in SPV and the target of 500 000, with the sample of 60 units, out of which all 60 have been considered as connected and functional in SPV. The analysis concluded that the target has been over-achieved. With these additional 500 000 taxpayers, the SPV shall cover 90% of the total number of large taxpayers (according to the new definition that shall be available as soon as the modification of the respective legal framework shall be approved), accounting for at least 90% of the large taxpayer tax base. ANAF Order No. 1721/2021 as amended and supplemented by the ANAF Order No. 83/2022 contains in Articles 3, 4, 5 and 6 the new definition and selection criteria for large taxpayers. Article 3 states that the selection of major taxpayers is carried out based on the following criteria: specific criteria, basic criterion and continuity criterion. The characteristics of these criteria for the selection of large taxpayers are further specified in Articles 4, 5 and 6 of the same ANAF Order. Specifically, Article 4 defines specific criteria as criteria for the selection of large taxpayers depending on (a) the activity carried out, (b) the investment, and (c) the single tax group criterion. Article 5 defines the basic criterion as the result of aggregating three indicators with respective weights: (a) turnover -– 50%; (b) declared tax obligations -– 30%; (c) personnel expenditures – 20%. Finally, Article 6 establishes the continuity criterion, requiring that large taxpayers selected under the new legal framework, who fail to meet certain criteria for three consecutive years, will no longer be managed by the General Directorate for Large Taxpayers. The list of large taxpayers submitted by ANAF includes the criteria used to classify each company as a large taxpayer. According to ANAF’s report on the total number of large entities enrolled in the SPV in 2022, 3