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Main amendments brought to the VAT split payment mechanism

Angela Rosca 29 Dec 2017

Law no. 275/2017 published in the Official Gazette no. 1036 of 28.12.2017

The Law approves Ordinance no. 23/2017 regarding the VAT split payment mechanism with amendments and completions. TaxHouse, Taxand Romania, lists the main provisions.

Thus, taxable persons and public institutions registered for VAT purposes as per art. 316 of the Fiscal Code have to open and use at least one VAT account, if at least one of the following conditions is met:

• They register outstanding VAT liabilites as of 31 December 2017 exceeding the thresholds provided by the Law and which are still outstanding as at 31 January 2018. The registration in the system will be performed as of 1 March 2018
• They register outstanding VAT liabilities as of 1 January 2018 exceeding thresholds provided by the Law and which are still outstanding within 60 working days since their due date. The registration in the system will be performed starting the 1st of the second month following the term of 60 working days of the due date
• They fall under the provisions of the law regarding the procedures of preventing insolvency and of insolvency. These taxpayers will be registered in the system starting 1 March 2018 if this condition is met as at 31 December 2017 and, if the insolvency procedures will be later on initiated, the registration in the system will be performed starting the 1st of the month following the one in which they fell under the legislation on insolvency

Discover more: Main amendments brought to the VAT split payment mechanism

Taxand's Take

Taxable persons who choose to apply the VAT split payment mechanism after 1 January 2018 benefit from a 5% reduction of the corporate income tax or the tax on the income of microenterprises for the period in which they apply for the system. This incentive is also granted to taxable persons who opted to apply the VAT split payment mechanism during 1 October 2017 – 31 December 2017 and who continue to apply this system in 2018.

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Indirect Tax | Romania