Amendments on VAT split payment
From October 1st, 2017, VAT-registered Romanian taxpayers can choose to apply the VAT split payment system. This will become mandatory in January 2018. (GEO 23/2017)
In principle, this means that instead of paying the full invoice into one bank account, that amount will be split into the taxable base and the VAT:
the taxable base will be paid into the vendor’s regular bank account
the VAT will be paid into a designated VAT bank account of the vendor or customer.
Local firms have criticized the measure, saying that it will block the economy.
The GEO 23/2017 is in effect starting September 3rd 2017.
The GEO was amended on Tuesday, September 26th, in the Senate’s Economic Committee. A liberal senator submitted an amendment that reading that the split VAT payment will become mandatory next year only for state-owned companies and firms that are in contractual relations with the state. For the other companies, the system will be optional next year and will become mandatory in 2019.
There are still many uncertainties related to how this system would work.
The amendment also remove the fine for companies that fail to comply with the new system and replace it with a warning, at the first offence, given the system’s complexity and the short time to implement it.
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