First introduced in October 2017, the VAT split payment mechanism was supposed to tackle VAT fraud and increase the Romanian state revenues. Debated by many taxpayers that it will not achieve the desired outcomes, the VAT split payment mechanism received also the criticism of the European Commission in November 2018.
As of 1 February 2020 the VAT split payment mechanism will be abolished, and taxpayers will be required again to make the necessary amendments, as the dedicated VAT split payment accounts will no longer be used.
What changes are foreseen?
- Amending the accounting systems of both the taxpayers that were in the VAT split system (either by option or as a mandatory requirement) and taxpayers making payments to suppliers within the system. The accounting systems do no longer have to split the payment of an invoice into two bank accounts. Also, for taxpayers that were not within the VAT split system, it will be no longer necessary to check whether a supplier applies VAT split or not and thus all the related checks to the official registries embedded or connected with the accounting system will need to be eliminated.
- Amending the invoice templates – invoices issued by taxpayers that were in the VAT split system which included also the VAT dedicated bank account will need to be amended as this information will no longer be needed.
- Transferring the amounts from the VAT accounts to the regular bank accounts and closing the VAT accounts. This will be done automatically only in case where the bank accounts were opened with the Romanian State Treasury.
Image Source: unsplash.com
Michaela Merz 