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The government decided that the split VAT payment be compulsory starting with1 January 2018

The government adopted on Wednesday an ordnance through which they introduce the obligation to pay  the split  VAT starting with 1 January 2018; the taxable people recorded for VAT with the obligation to own and manage a VAT account for the collection and payment of VAT for taxable operations ( acquisition of goods/services, goods delivery/services). Similarly, the public institutions recorded for VAT  purposes will have the obligation starting with the same date to own a VAT account for the collection of the VAT for the delivery of goods/services  made.

According to a press release of the government, the decision was taken to reduce the fiscal evasion in the domain of VAT, taking into consideration the fact that there is a significant difference between the VAT collected from the state budget and the tax recorded in the VAT payments made by the taxable people recorded for this purpose.

The government estimates that by the introduction of the new measure they will obtain budgetary supplementary income of about 6 billion lei until 2020.

At the beginning of August, the Coalition for the Development of Romania (CDR) which gathers 45 organisations or associated members from business environment criticised the measure of split VAT about which they said that it will generate major difficulties, a flow of cash to the companies which pay their taxes in an honest way and some could get into insolvency.

The  members of the coalition consider that fiscal evasion in the domains of fiscal risk for non-stating the income will not be fought against by the new system of split VAT.

CDR considers that this measure will cause operational blockages in the activity of all involved parties – companies which initially will have to take all the measures to implement the new system, units of state treasury will be assaulted by a huge number of requests regarding the VAT accounts as well as ANAF which have to approve all requests of transfer from the VAT  account to the current account.

Under these conditions, the CDR members do not support the implementation of the system, by anticipating major blockages in the activity of the companies and authorities, without the existence of a real effect on fiscal evasion by the non-stating of the income in domains known as having a high fiscal risk, but with significant costs for honest tax-payers.

CDR considers as necessary the consultation of the European Commission as well as the study which should show the impact on fiscal evasion and the costs for the business environment.

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