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The new Romanian VAT Code – approved

By September 21, 2015July 10th, 2021No Comments

The new Romanian Tax Code has been approved by the President on 7th September 2015. The new VAT amendments, in force from 1 January 2016, refer to the following:

The new Romanian Tax Code has been approved by the President on 7th September 2015.
The new VAT amendments, in force from 1 January 2016, refer to the following:

  • Starting from 1 January 2016, the standard VAT rate is reduced from 24% to 20%. The VAT rate will be further reduced to 19% starting from 1 January 2017;
  • application of a reduced VAT rate of 5% (not 9% as in the Project) for access to sports events;
  • application of a reduced 5% VAT rate (and not 9% as in the present) to: access to museums, castles, historical monuments, fairs, cinemas, zoos, etc, as well as for school books, books, papers and magazines, with the exception of those published mainly for publicity purposes;
  • extension of threshold (from RON 380,000 lei to RON 450,000 lei) representing the value of the home, for the application of the reduced 5% VAT rate applicable to supply of building to individuals, part of the social policy established by the Government;
  • application of the reverse charge mechanism to  the following:

 

          –   supply of buildings, parts of buildings and land (which are subject to VAT, as per the law or by option);

          –   supply of investment gold;

          –   supply of mobile phones;

          –   supply of devices with integrated circuits, like microprocessors and central processing units, before being integrated into products destined for the final user;

          –   game consoles, PC tablets and laptops;

  • cancellation of the joint liability provision with regard to the payment of VAT. As per the current law, in certain situations (ex. Incorrect invoice issued by the supplier) the buyer is jointly liable with the supplier for the payment of output VAT);
  • introduction of an option to renounce a VAT refund claim, based on a notification sent to the tax authorities;
  • clarification brought as to the application of the anti-abuse rules, specifically regarding artificial transactions.

 

Emilia Dragu and Marina Alexandru
DCTax