Michaela Merz

Romania – The New Fiscal Code – provisions entering into force as of 1 January 2016

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I would like to inform you about the new amendments to the Romanian VAT legislation, which will enter into force as of 1 January 2016.

Please be informed that the most important change is the decrease of the standard VAT rate from 24% to 20% starting with 1 January 2016, and from 20% to 19% as of 1 January 2017. In addition to the above, please find below a selection of other VAT provisions entering into force starting with 1 January 2016 which may also be of interest:

  • Reduction of the VAT rate from a 9% to a 5% for the supply of school manuals, books, newspapers and some magazines, as well as for the supply of services consisting in the allowance of access to castles, museums, cinemas, etc.;
  • Extension of the application of the reverse-charge mechanism to:
    • The supply of buildings, parts of buildings and plots of land for which VAT is applied;
    • The supply of mobile phones, PC tablets, laptops, gaming consoles and devices with integrated circuits, until 31 December 2018;
  • Companies surpassing the VAT registration threshold will be obligated to collect VAT for the advanced payments received before registering for VAT purposes related to goods delivered / service performed after the registration date;
  • Companies can recover VAT if their clients have commenced the insolvency procedure and have begun a reorganisation plan accepted and confirmed by a judicial ruling;
  • Where such as annulment of a contract / endowment of price reductions for which the supplier has not issued an invoice within the legal deadline, the beneficiary is obligated to issue an invoice for the adjustment of the taxable base;
  • Exclusion of the joint responsibility.

Please find HERE the tax and legal alert mentioning all changes related to the new Romanian Fiscal Code.

For more information please contact my colleagues from PwC Romania: Adriana Costea / adriana.costea@ro.pwc.com / +40212253257 or Anca Dumitrescu: anca.dumitrescu@ro.pwc.com / +40212253654

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