The opening of a VAT account is mandatory for:

• All taxable persons registered for VAT who provide services or deliver goods taxable in Romania;
• Public institutions registered for VAT purposes.

The coming into force of this measure:

• From October 1st, 2017: the split VAT payment can be applied optionally;
• From January 1st, 2018: it is mandatory to apply the split-VAT system.

The following must pay VAT in the distinct VAT bank accounts of the suppliers:

• The taxable persons regardless if they are or not registered for VAT;
• Public institutions, regardless if they are or not registered for VAT.

Exception: the taxable natural persons (authorized individuals, individual enterprises, family enterprises, free lancers) that are not registered for VAT.

The VAT accounts will be opened at:

• Branches of the State Treasury or at credit institutions – by the taxable persons registered for VAT for the deliveries of goods / services providing to beneficiaries other than public institutions;
• Branches of the State Treasury – by the taxable persons registered for VAT for the deliveries of goods / services providing made for public institutions;
• Branches of the State Treasury – by the public institutions registered for VAT for any receiving in lei;
• Credit institutions – by the taxable persons registered for VAT and public institutions registered for VAT for all operations in foreign currency.

From the VAT account will be paid:

• The VAT paid in the VAT account of the provider/executant, including the VAT due to payments in advance;
• VAT to the paid to the state budget, resulted from the VAT return;
• Amounts transferred in another VAT bank account opened by the account holder;
• VAT corrections when the restitution is made in a different VAT account;
• Amounts paid as consequence of corrections of the invoices or following the adjustment of the

VAT taxation basis into the VAT accounts of suppliers/clients;

• Restitutions in the account current of the account holder, in the limit of the alimonies made with the agreement of ANAF;
• Amounts transferred in the account current, for the persons not obligated to open a distinct

VAT account – with the agreement of ANAF;

• The VAT reckoned between the members of the sole tax group;
• The fees applied by the credit institutions to the VAT account;
• It is forbidden to withdraw cash from the VAT account.

In the VAT account will be received:

• The VAT due the deliveries of goods / providing of services;
• The alimonies/payments of VAT for the operations collected in cash or through the card;
• The transfers from other VAT accounts of the account holder;
• The transfers from the account current opened at the same bank or at the same branch of the State Treasury;
• The amounts received as a result of the correction of material errors;
• The VAT reckoned between the members of the sole tax group;
• The amounts received following the correction of invoices or as a consequence of the adjustment of the VAT taxation basis;
• The VAT reimbursement of the balance of the VAT return, if the person opts for the payment of the amount in the VAT account;
• The interest due to the VAT account, paid by the credit institution;
• Other amounts resulted from operations determined by order of the president of ANAF.

The procedure applicable for receivings in cash or through debts/credit cards:

• The persons subject to the applying of the split-VAT system, after receiving amounts in cash or through bank cards, have the obligation to pay/to forward in the own VAT account the sums representing VAT due to the deliveries of goods / providing of services. The term for the payment of the VAT/payment in the VAT account is of 7 business days;
• If the cash receivings overcome the payments, the daily difference between the VAT due to receivings and VAT due to payments will be paid in the VAT account, in 7 business days term.

The procedure for partial payments (advances, tranches)

• For the partial payments of the price of the goods deliveries or of the services providing, and equally in case of advance payments, each payment is considered to include the due VAT, established through applying the procedure of the increased hundred, respectively 19 x 100/119, for the standard ratio, and 9 x 100/109 or 5 x 100/105, for reduced ratios.
• For partial payments due to an invoice inscribing operations subject to different VAT ratios and/ or several taxation regimens, the beneficiaries must allot with priority the amounts paid for the operations subject to normal taxation regimen, in the decreasing order of the ratios. The VAT established as such is paid in the VAT account of the provider/supplier.

The main misdemeanors and sanctions

• The payment of VAT due to the acquisitions of goods and services by the beneficiaries in a different account than the VAT account of the provider/supplier, if the correction of the payment is not made in a term of 7 days. If the correction is made in the 7 business days, the beneficiary is not sanctioned. If the payment is not corrected in the 7 business days term, the misdemeanor is sanctioned by a fine determined as a percentage of 0,06%/day of the amount paid erroneously, starting with the day of the erroneous payment until the date of correction, but no longer than 30 days after the day of the erroneous payment. If after 30 days after the date of the erroneous payment it is still not corrected, it will be applied a fine in amount of 50% of the sum paid erroneously in a different account than the VAT account of the supplier/provider;
• If the VAT account is not announced to providers and clients, the sanction is a fine between 2.000 – 4.000 lei;
• The skipping of payment in a 7 business days term of the amounts representing VAT from the account current of the account holder in his VAT account or the VAT payment owed to the provider from other account than the VAT account if the correcting of the payment is not made in 7 days. If the beneficiary corrects the payment in the 7 business days, he is not sanctioned. If the provider has not paid in 7 business days or if the beneficiary has not corrected the erroneous payment in the same term, these misdemeanors are sanctioned by a fine determined a percentage of 0,06% per day of the amount not paid / paid erroneously, starting with the day of occurrence of the payment obligation or the date of the erroneous payment until the date of paying/correction of the payment, but no longer than 30 days since the date when the obligation to pay has occurred or since the day of the erroneous payment. If after 30 days the amounts are still not paid or the erroneous payment is not corrected, it is applied a fine of 10% of the amount not paid / paid erroneously in a different account than the VAT account of the provider/supplier.
• The utilization of the amounts from the VAT account in other way that that disposed by the Ordnance is sanctioned by a fine of 50% of the amount used incorrectly.

The facilities offered to taxable persons registered for VAT who opt for applying the mechanism between October 1st – December 31st 2017:

• The cancelling of the overdue payments due to the main tax duties representing VAT, overdue at September 30th, 2017, under some conditions;
• The reduction with 5% of the profit tax/the tax due to the incomes of microenterprises due to Q4 of the fiscal year 2017. For the profit tax payers that have the obligation to declare and pay annual profit tax with payments in advance, 5% is applied to the advanced payment due to Q4 of the fiscal year 2017, and for those who must declare and pay annual profit tax, 5% is applied to a quarter of the profit tax owed for the fiscal year 2017. For the income tax payers the reduction is mentioned distinctively in the annual statement regarding the profit tax.

This newsletter is issued by ECOVIS Romania as an informing letter over the most important evolutions/changes in the legal and tax fields, and in the investment environment in Romania as well. The information, the analysis and the comments mentioned above are of generic nature and it is not the intention or the imperative of the issuer to be used as a substitute for professional consulting dedicated to individual cases. For advice concerning your specific situation, please contact us directly.

© ECOVIS Romania SRL – 2017