6812

Authorization procedure and Trade Register aspects for CAEN 6812

The establishment of a company that will carry out real estate development activity (CAEN 6812) requires going through the standard registration stages at the Trade Register (ONRC), with special mentions regarding the object of activity. When submitting the application, the declaration on one's own responsibility according to Law 359/2004 is completed, certifying compliance with the legal conditions for carrying out the activity. For CAEN 6812, there are no mandatory prior approvals from other institutions in the authorization phase, but it is mandatory to correctly enter the CAEN code, clearly stating the main object of activity: 'Real estate development (promotion)'. The administrator or associate must declare on their own responsibility that they have legal capacity and are not under legal prohibitions to exercise this activity. At the Trade Register, the constitutive acts (company contract for SA or SRL, articles of association for SRL) are filed, and for the registered office, a valid title (sale-purchase contract, lease, loan for use) or proof of ownership must be presented. After registration, the registration certificate and the certificate of attestation confirming CAEN code 6812 are requested. If the company intends to carry out its own construction works, CAEN code 4120 (Construction of buildings) or, as the case may be, 4299 (Other special construction works) must also be entered, but this is not mandatory for mere real estate promotion without direct execution.

Regulatory framework, specific approvals and control institutions

Real estate development activity is regulated by Law 50/1991 on the authorization of construction works, Law 10/1995 on quality in construction, and Law 350/2001 on territorial planning and urbanism. Depending on the project's scale, building permits issued by local authorities, urbanism certificates, approvals from the Ministry of Culture (if the property is in a protected area) or from the Environmental Protection Agency (impact assessment) may be required. The main control institutions are the State Inspectorate in Construction (ISC) for work compliance and the Tax Authority (ANAF) for transaction taxation. Also, for the promotion and sale of housing units, Law 114/1996 on housing, as amended, and Law 7/2020 on the protection of home buyers (especially for 'off-plan' contracting) apply. It is mandatory to obtain the fire safety authorization according to Law 307/2006 and approvals from the Emergency Situations Inspectorate (ISU), especially for buildings with mixed use or commercial spaces. Special attention is given to the legal regime of the land: outside built-up area, inside built-up area, residential or commercial zone. Any modification of urban plans (PUZ, PUD) must be approved by the local council.

Tax management, risk of ANAF audit and specific accounting

From a tax perspective, real estate developers (CAEN 6812) are required to register for VAT purposes if the estimated turnover exceeds the threshold of 300,000 lei. The sale of buildings is exempt from VAT with the right of deduction (Art. 292 of the Fiscal Code) if the property is new (sold within 5 years from the date of first occupancy) and the buyer is an individual who cannot deduct; alternatively, the developer may charge 19% VAT and apply the normal rate if selling to legal entities. For building land, the sale is subject to VAT, except for non-building land. Also, corporate income tax of 16% or micro-enterprise income tax (if the conditions are met) applies. ANAF may initiate a thematic tax inspection, verifying in particular the deductibility of promotion expenses, interest expenses and outsourced services. The major risk is the reclassification of contractor contracts as construction operations with VAT and the incorrect declaration of real estate deliveries. Accounting must comply with Order 1802/2014, and development costs are capitalized in fixed asset accounts (account 231 – Tangible assets in progress) until completion, after which they are transferred to accounts 211 (Land) and 212 (Buildings) for sale. It is recommended to prepare a tax depreciation plan and periodically evaluate the inventory of unsold housing units. For cash transactions, the threshold of 5,000 lei/day/person applies, and settlements should preferably be made through bank accounts. To avoid audit risks, registration in the RO e-Factura system is required for all invoices issued and collected through the e-TVA system, as well as filing the single declaration for any distributed dividend income.