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Romania To Introduce VAT Split Payment Mechanism

by Ulrika Lomas, Tax-News.com, Brussels

20 December 2017


Romania will introduce a value-added tax (VAT) split payment mechanism from next year, to improve tax collections and penalize those firms that are slow to remit value-added tax to the tax agency.

The regime will begin to apply to taxpayers from March 1, 2018, for those who fail to settle any significant outstanding tax dues by January 31, 2018, that are due as of December 31, 2017. The threshold for large companies is tax debts of RON15,000 (USD3,852); for medium companies it is RON10,000; and for small companies it is RON5,000.

The regime, approved by the Government in Ordinance no. 23/2017, would require the affected taxpayer to set up a second bank account or multiple accounts to segregate the value-added tax due to be remitted to the tax agency for amounts received for its supplies, while preventing those funds' use by the business.

TAGS: compliance | VAT tax authority guidance | tax | business | value added tax (VAT) | VAT legislation | Romania | tax authority | legislation | VAT compliance matters

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