A Brief on the Modifications in Romania’s VAT Legislation
The Government of Romania has introduced an array of changes to its VAT legislation. The amendment includes an increase in the VAT registration threshold, tax authority’s right to de-register taxpayers and VAT related deductions for purchase of vehicles.
Revised VAT registration threshold
- The VAT registration threshold has been increased from € 35,000 to € 65,000, effective from July 1, 2012.
- Taxpayers who have declared or realised an annual turnover not more than € 65,000 may apply to register for VAT on a voluntary base, excluding those who supply intra-community deliveries of new means of transportation.
For taxpayers with a turnover not more than € 65,000, obligations for tax declarations have been made simpler, and in order to apply these regulations, transitional provisions have also been provided.
De-registration of VAT
- Romanian tax authorities hold the right to de-register taxpayers who do not, in a period of six months:-
- Submit VAT returns,
- Disclose their VAT return acquisitions or deliveries of goods and rendering of services.
VAT Deduction for Vehicles
Only 50% of input VAT for acquisitions of vehicles and other expenses linked to these vehicles will be deductible for VAT calculation purpose with effect from July 1, 2012.
100% of Input VAT will be deductible if vehicles are used:
- For emergency services, safety and protection, courier activities
- For sales persons and acquisitions
- For transportation services rendered by authorised companies
- For paid rendering of services, according to the object of activity of companies, and
- For to-be-leased vehicles
- For vehicles considered as goods for trading activities.
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