The General Department of Large Taxpayers within Romania’s tax agency ANAF is currently carrying out controls in the local banking sector, said Ionut Misa, the department’s director.

He added that the controls at local banks had “major consequences”, and the tax authorities “have identified many” of them, reports local Profit.ro.

He gave the example of non-performing loan portfolios, which are sold by banks in attractive packages that also include performing loans. A package of EUR 100 million is sold to a company with EUR 5-7 million, Misa explained. The difference of EUR 93-95 million represents deductible expenses.

In reality, the bank sold the loan to an offshore company, which is one of its subsidiaries. Basically the bank was the single shareholder in that offshore company.

“There are situations where it’s proven that the loans were used in fraudulent schemes,” Ionut Misa said.

Despite this, the bank’s general expenses with these loan are considered deductible, because the bank hasn’t managed to recover those loans.

“We are totally exposed to some companies that benefit of a capitalist experience much higher than ours,” the director of the General Department of Large Taxpayers said.

editor@romania-insider.com