1310

Authorization procedure and Trade Register aspects for CAEN 1310

The establishment of a company that will carry out activities classified under CAEN 1310 (Preparation of fibers and spinning of textile fibers) requires going through the standard registration stages with the Trade Register (ONRC), without the need for prior operating permits from special environmental or sanitary-veterinary institutions, as long as no dyeing or wet finishing operations are carried out. When filing the registration application, the associates/shareholders must submit a declaration on their own responsibility in accordance with Law 359/2004 regarding the fulfillment of operating conditions. Fiber preparation activities (cleaning, carding, combing) and dry spinning are considered low-risk, not subject to prior environmental authorization. However, if within the same entity wet finishing operations (dyeing, chemical washing) are also carried out, the procedure for environmental authorization or environmental agreement becomes applicable, depending on the production capacity and the classification under the annexes of Law 292/2018. Administrators must register with the ONRC the main activity object as CAEN code 1310, and as secondary objects, specific codes for the sale of fibers (4676) or trade in textile machinery (4663) may be added. From a minimum capital perspective, there is no special requirement, the general rule applies: minimum capital of 1 RON for an SRL.

After registration, within 30 days, the tax registration declaration (Form 010) must be submitted to the Tax Authority (ANAF) to obtain the tax registration certificate and enrollment in the fiscal vector. At the time of registration, it is recommended to request VAT codes if the exemption threshold of 300,000 RON/year is expected to be exceeded, or the option of reverse charge for international service provision.

Regulatory framework, specific endorsements, and control institutions

The main regulatory institution for CAEN 1310 is the Ministry of Economy, Entrepreneurship, and Tourism, through its specialized departments, but the current control of compliance with technical and environmental standards is carried out by the National Environmental Guard and the Territorial Labor Inspectorate. After establishment, the company must register with the Trade Register and submit annual financial statements, and if it uses machinery with dust or noise emissions, it must obtain an environmental permit within 90 days of starting the activity, in accordance with Government Emergency Ordinance 195/2005. If the activity involves the use of hazardous substances (oils, lubricants), Law 212/2015 on waste management applies, and the economic operator must keep waste records and declare annually on the Environmental Fund Administration platform. Also, for production spaces, a fire safety endorsement issued by the Inspectorate for Emergency Situations is required, and electrical installations must be checked by the Romanian Technical Inspection and Certification Body. In case of purchasing second-hand machinery from outside the EU, customs regulations apply and a use authorization from the Romanian Technical Inspection and Certification Body must be obtained. Registration with the National Authority for Consumer Protection for finished products is not mandatory, but compliance with SR EN ISO 9001 standards is recommended to facilitate access to external markets.

Tax management, ANAF audit risk, and specific accounting

From an accounting perspective, fiber preparation and spinning activities primarily involve costs for raw materials (bales, wool, cotton, flax, hemp, synthetic fibers), direct labor, electricity, and depreciation of machinery. Accounting must distinctly reflect spinning operations from finishing operations, if any, to avoid incorrect classification in the VAT rate or in the RO e-Factura system. Starting from 2024, all invoices issued between taxable persons established in Romania must be transmitted through the e-Factura system, regardless of value, and for retail transactions, the e-Cash register system applies. Net profit is taxed at 16% (profit tax) or 1% (micro-enterprise income tax, if turnover is below 500,000 euros and the conditions of art. 47 of the Fiscal Code are met). It is recommended to set up provisions for warranties and for the decommissioning of machinery at the end of their life, especially if the space is rented. ANAF typically checks three sensitive aspects: correct classification of the activity (whether spinning is dry or wet, as it changes the environmental risk and the deductibility of expenses), VAT returns for the export of textile fibers (requires customs documents and commission contracts), and personnel expenses (D112 declarations must correctly reflect working time and bonuses). Reclassification risk arises when the company provides spinning services to third parties but does not own its own machinery – ANAF may reclassify the transaction as a provision of services, applying the standard VAT rate of 19% instead of 5% as the case may be. For purchases of raw materials from intra-community space, reverse charge VAT applies, and the reporting obligations are fulfilled through declaration 390 VIES and the VAT return on time. For investments in machinery with a useful life of more than one year, linear or accelerated depreciation applies, respecting the normal useful lives provided by the Catalogue on the classification of fixed assets. Companies that export processed fibers may benefit from VAT exemptions or the application of the 0% rate for processing operations in toll, if the conditions of art. 294 of the Fiscal Code are met. To minimize audit risk, it is recommended to keep supporting documents for each production batch: consumption notes, warehouse records, order estimates, production reports, and handover sheets for finished products. Management accounting is essential for the correct allocation of indirect production costs, especially if there are several types of processed fibers. In the event of a tax inspection, ANAF inspectors will also request verification of fiscal vectors regarding building and land tax for production spaces, as well as proof of payment of social insurance contributions. Do not forget that for the single declaration on income tax and social contributions, authorized individuals carrying out activities in this field must estimate the net annual income by May 25 inclusive.