1424

Authorization procedure and Trade Register aspects for CAEN 1424

The establishment of a company with the main activity CAEN 1424 requires following the standard registration steps at the Trade Register (ONRC), with particularities related to the secondary object. When submitting the application through the ONRC portal (Application for Registration in the Trade Register), the fiscal vector is completed with code 1424. The constitutive acts must expressly mention 'Manufacture of wearing apparel from leather and fur' as the main activity. No prior operating authorization is required, but according to Law 359/2004, the administrator submits a declaration on his own responsibility that the unit meets the hygiene and fire safety conditions. For authorized natural persons, registration in the Trade Register with CAEN code 1424 and the professional headquarters is requested.

A particularity for this code is the need to verify the technical standards for fur processing: possession of a production space that meets sanitary-veterinary conditions, according to ANSVSA Order no. 16/2010. When changing the headquarters or the way of carrying out the activity, the declaration at the Trade Register is updated. Also, for the export of products, registration with the county veterinary authority and obtaining the animal health certificate for fur batches is required.

Regulatory framework, specific approvals and control institutions

The activity of manufacturing wearing apparel from leather and fur is subject to general regulations on cosmetic and textile products, but with additional specifications. Law 245/2004 on leather products establishes the obligation to mark the origin and composition. The competent authorities are ANAF (tax control), ITM (labor standards, especially regarding exposure to chemicals), ISU (fire safety authorization in case of storage of flammable materials) and the Sanitary-Veterinary Directorate (for animal-origin furs).

Specific approvals include: environmental permit for volatile emissions (dyeing, finishing) according to Law 104/2011; certificate of conformity for fur products, according to EC Regulation no. 1007/2011 on textile names; for furs of protected species (CITES), approval from the National Environmental Protection Agency is obtained. In addition, verification of compliance with hygiene conditions at the workplace is carried out by the DSP, and for the use of solvents, an integrated environmental permit is issued (if exceeding relevant thresholds).

Tax management, ANAF audit risk and specific accounting

From a tax perspective, CAEN 1424 falls under production activities, with standard VAT rates (19%). Declaration of obligations through the single declaration (for income from independent activities) or declaration 300 (VAT) is done monthly/quarterly. Accounting must distinctly record the costs of purchasing raw materials (hides, furs, chemicals) and personnel expenses. ANAF pays increased attention to cash transactions (exceeding the threshold of 5,000 lei/day), and the use of the RO e-Factura system is mandatory for all invoices issued to legal entities.

The audit risk is medium to high, due to variable markup margins and the frequency of cash transactions in the sale of products. ANAF inspectors check the registration of fur import operations, the correctness of applying the VAT rate to natural fur products (which may be considered works of art if handmade, but this is not the case). It is recommended to keep purchase documents (tax invoices, sales-purchase contracts) and production records for at least 10 years. When setting transfer prices, if exporting outside the EU, a transfer pricing documentation file is prepared.

Specific accounting includes the valuation of inventories at acquisition cost (FIFO or average cost method applied) and recording adjustments for impairment (furs deteriorate over time). Provisions for warranties or returns are recorded if a contractual warranty is offered. Profit tax is calculated quarterly, and for micro-enterprises (turnover under 500,000 euro), the rate is 1% of revenues if they have at least one employee. Recommended: consultation with an accountant specialized in the textile industry for the correct management of VAT on exports and excise duties (for organic solvents).