The much expected clarification and exemplifications relating to the VAT system applicable upon receipt of payment have taken on a final form through the publication of amendments to the Methodological Norms for the application of the Tax Code in Monitorul Oficial al Romaniei. The latest provisions also contain new aspects of the profit tax, excise tax and value added tax, which are not directly related to the VAT levied on receipt of payment.
Monitorul Oficial No 753 / 8 November 2012 has published Government Resolution no. 1071/6 November 2012 amending and supplementing the Methodological Norms for the application of Law no. 571/2003, regarding the Tax Code, approved under Government Resolution No 44/2004.
The latest Resolution clarifies the VAT system applicable upon receipt of payment, as well as aspects related to profit tax and excise duties.
The major amendments to Resolution 44/2004 refer, inter alia, to the following:
Value Added Tax
– VAT group;
– Missing goods, to which Arts. 148 and 149 of the Tax Code, regarding adjustment of the deduction right, shall apply;
– New provisions regarding supplies of similar goods, particularly low-value goods granted for free during business entertainment events (RON 100/gift) and sponsorship actions, as well as the date on which VAT should be charged in these two cases;
– New provisions referring to supply of similar services;
– Establishment of the place of supply of services in the case of long-term lease of transport means to non-taxable entities;
– New provisions regarding the application of the VAT system upon receipt of payment, covering the following:
- Chargeable event;
- Taxable entities that should apply this system and taxable entities that should not apply the system;
- Method for the calculation of the turnover used as a reference basis for the computation of the RON 2,250,000 ceiling envisaged for the application of this system;
- Rules applicable to the entities re-registering for VAT purposes after their registration for VAT purposes has been annulled;
- Explanation of the wording “collection of the price of supplies of goods or services;”
- New provisions referring to assignment of debt, debt offsetting, cash collection of credit transfer / debit transfer type, payment by debit or credit cards, payment in kind;
- Application of the VAT system to supplies of goods / services the price of which is totally or partially received in cash;
- Partial collection of invoiced amounts subject to several VAT rates and/or to which several tax regimes apply;
- VAT adjustment in the case of beneficiary’s bankruptcy;
- Rate used in exchanging foreign currency for the national currency (Lei);
- New obligations in respect of Sales and Purchase Ledgers;
- Examples given in respect to the application of the system (e.g. obligation of filing a notification, date on which the taxable entity should apply / no longer apply the system, assignment of debt, debt offsetting, price discounts);
- Mention according to which the Ministry of Public Finance prepares a Guide to the Application of VAT upon Receipt of Payment, which contains all provisions of the Tax Code, Methodological Norms for the Application of the Tax Code and Procedural Rules.
– Amendment of provisions regarding the chargeable event occurring in the case of VAT-exempt intra-Community supplies of goods (new examples);
– Amendment of provisions regarding the chargeable event occurring in the case of intra-Community acquisitions of goods (new examples);
– New provisions referring to the rate used in exchanging foreign currency for the national currency;
– Amendment of provisions regarding adjustment of the VAT deduction right according to Arts.148 and 149 of the Tax Code;
– New provisions in respect of the documents required to be filed by non-resident companies requesting registration for VAT purposes in Romania;
– Amendment of the mandatory elements of self-billing tax invoices;
– New provisions regarding the issuance of simplified invoices;
– New provisions related to the issuance of invoices by the beneficiary under the name and on the account of supplier;
– New provisions regarding the goods supplied by enforcement authorities;
– New provisions referring to electronic invoices;
– Postponement of non-payment of VAT on goods imported by entities registered for VAT purposes in Romania until 1 January 2017.
– Deductibility of technical provisions created by virtue of laws regarding privately managed pension funds;
– Recovery of the tax loss resulting from merger or division.
– Further registration obligations which should be fulfilled by small-sized still wine producers (the Form containing such producers’ declaration of registration is attached to the Resolution);
– New provisions regarding bonded warehouse operators that are authorised to produce beer;
– Biomass products mixed with energy products;
– Reduction of the guarantee securing payment of excise duties by the authorised warehouse operator or the registered beneficiary.
The new provisions shall become effective as of the date of their publication in Monitorul Oficial, except for those referring to VAT and part of those relating to excise taxes which shall apply starting 1 January 2013.
TAX ALERT by Mazars Consulting / MAZARS ROMANIA
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* TAX ALERT contains a selection of the latest major issues occurred in the Romanian legislative framework, is intended only to provide information and, hence, shall not be deemed to provide professional advice or consultancy. Therefore, we assume no responsibility in this respect.