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.
The proposal to reduce the standard VAT rate from 19% to 16% starting from 1 January 2020 was adopted by the Senate on 21 October 2019 and is currently under the analysis of various committees under the Deputy Chamber. Continue reading
Romania has a very high fraud in the VAT field and this is why the authorities had put in place a VAT registration process for resident entities, which is far more demanding compared to similar processes in other EU countries. Continue reading
The Romanian senators from the budget finance committee discussed and proposed some amendments related to the VAT split payment system.
On 10 October 2017 the senators decided to return the proposed amendments to the budget finance committee for a week to clarify the effective impact of this measure on the Romanian State Budget (in case the system will be applied only to a limited number of companies and not in a generalized form). Continue reading
The new VAT split payment system requires all VAT payers (including non-residents registered for VAT purposes in Romania) to use a bank account dedicated to all VAT-related incoming and outgoing amounts (for transactions carried out on the Ro territory) in respect of all their VAT-bearing transactions. Continue reading