Romania's Govt. postpones split VAT mechanism

The mandatory split VAT payment system will be postponed for three months and will enter into force on January 1, 2018 instead of October 1, 2017, as previously decided. The Government made this decision after talks with representatives of the business environment, according to an announcement of the Finance Ministry, reports local Profit.ro. The companies that want to start using this mechanism earlier will be able to do it starting October 1, 2017. They will get a series of fiscal benefits for doing this, such as lower taxes and longer payment terms. The split VAT mechanism provides that all VAT-paying companies will have to set up a separate account for the VAT where they will transfer the VAT they cash in from selling their goods and services to clients. The money from this account will only be used for paying VAT when buying goods and services to suppliers or for paying the VAT surplus to the state budget. editor@romania-insider.com