Government Ordinance no. 23/2017 on the disbursement of VAT, published in the Official Gazette of Romania of August 31, 2017, provides for the optional application of the VAT split payment mechanism between 1 October and 31 December 2017 and its mandatory application as of 1 January 2018.

The mechanism for the split VAT payment mainly involves the following:

  • Opening of a VAT account by taxable persons, including public institutions, registered for VAT purposes;
  • Payment by beneficiaries – public institutions, taxable persons, except for non-registered natural persons and not required to be registered for VAT purposes, VAT on transactions taxable in the separate VAT account of the supplier / provider;
  • Use of cash amounts in this distinct supplier VAT account / supplier to pay the tax on his purchases to his suppliers / providers and the tax owed to the state budget;
  • Return / deposit by the supplier / provider in his / her VAT account within 7 business days of receipt of:
  • the difference between VAT on receipts and VAT on cash payments made in one day;
  • VAT on receipts through the use of credit / debit cards or cash substitutes;
  • VAT on invoices issued before 1 January 2018, or, as the case may be, before the date on which the person applies the option to the mechanism, and collected after that date;
  • The possibility of transferring amounts from VAT accounts to another account by the holder only with the approval of ANAF. The transfer is approved by ANAF within maximum 3 working days from the submission of the application;

VAT accounts will be opened at:

1. State Treasury units

  • By public institutions registered for VAT purposes, for any receipts in RON;
  • By taxable persons registered for VAT purposes, for deliveries of goods / services rendered to public institutions;

2. State Treasury Units or credit institutions

  • By taxable persons registered for VAT purposes for deliveries of goods/services rendered to beneficiaries other than public institutions;

3. Credit institutions

  • By public institutions registered for VAT purposes, for any foreign currency earnings;

Consult your VAT IBAN account opened at the State Treasury by clicking here.

The Government Ordinance prohibits the withdrawal of cash from the VAT account and various facilities are provided for the persons who opt for the application of the split VAT payment between 1 October and 31 December 2017 respectively:

  • the cancellation of late payment penalties for the main VAT obligations outstanding on 30 September 2017 under certain conditions;
  • 5% reduction of corporate income tax/income tax for the fourth quarter of the 2017 fiscal year;

The VAT split payment mechanism will ensure a fair competition environment by eliminating the advantages of some economic operators who do not pay VAT to the state budget and will lead, over time, to reducing VAT evasion in the VAT field, thus ensuring the financial resources of economic operators for payment of VAT due to the state budget.

The contraventions and penalties specific to the VAT split mechanism provide for a grace period of 7 working days to correct various errors and if they have not been corrected within the specified time, a penalty of 0,06% per day of VAT, but no more than 30 days.

After the 30-day deadline for failing to pay VAT to the supplier’s VAT account or for incorrectly charging the VAT account, a 50% fine of the VAT amount is applied, and for failing to deduct VAT amounts from the current account of the account holder into the VAT account of or the payment of VAT due to the supplier in a different account than the VAT account, a 10% fine of the amount of VAT shall apply.

Failure to communicate the VAT account to suppliers and customers is sanctioned by a fine of 2,000 RON to 4,000 RON.

Consult the Government Ordinance by clicking here.

Consult the People Register for split VAT payments by clicking here.

Here you can find different situations regarding split VAT payments procedures.


Article created by Contabiz Expert Accounting