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Guidelines for Sale of Construction and Land


The Central Fiscal Commission whose main role is to issue opinions with respect to the interpretation of tax law, issued guidelines offsetting the taxable base in transactions involving the supply of land and construction. The clarifications in question were introduced and published in April 2011. Taxand Romania discusses the effect of the clarification on the tax implication for corporations.

As a general principle, the VAT collected for transactions involving supplies of land and constructions is determined based on the will of the parties resulting from the contracts or other evidence as follows:

  • VAT is applied to the amount of the transaction if the parties agreed that VAT is not included in this amount or the parties did not make any reference to VAT
  • the gross-up mechanism is applied if the parties agreed that VAT is included in the amount of the transaction.

Taxand's Take

The clarifications issued are very important especially when dealing with cases where the contract does not make any reference to the applicable VAT. It is also useful for cases where there is disagreement between the taxpayers and the tax authorities during tax audits on the taxable amount.

Your Taxand contacts for further queries are:
Angela Rosca
T. +40 21 316 06 45

Adriana Craciun
T. +40 21 316 06 45

Taxand's Take Author