Romania could become the only EU member state to enforce the VAT split payment, and this will have a major impact on Romanian companies. After the new system is implemented, once a service is performed, the suppliers will provide the client with a VAT account.
As a result of public consultations on the initial proposal for introducing a VAT split-payment mechanism the following amendments to the proposal were published on the Ministry of Finance website:
· The VAT split-payment mechanism, if enacted, is optional with effect from 1 October 2017 (instead of 1 September 2017)
· The VAT split-payment mechanism is optional for 3 months (instead of 1 month)
· The VAT split-payment mechanism is mandatory from 1 January 2018 (instead of from 1 October 2017)
· Incentives are introduced for taxpayers opting for the VAT split-payment mechanism in the period from 1 October 2017 to 31 December 2017
· The fines initially proposed for failure to comply with the VAT split-payment mechanism are amended in favour of the taxpayer
· The deadline for paying the VAT amount in the VAT account is extended
· A 3 day-term is set for the tax authorities to approve the transfer of amounts from the VAT account to the taxpayer’s bank account
· A registry of taxpayers opting for applying the VAT split-payment mechanism in the period from 1 October 2017 to 31 December 2017 is created
The system will be introduced on a voluntary basis on 1 September 2017 and will become compulsory in October 2017.
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