Study: Romania's split VAT payment system needs to remain optional

The split VAT payment system should remain optional, and its implementation would be difficult, according to a study the Coalition for Romania's Development (CDR) carried out in September. Introducing the split VAT payment system is not useful or necessary for the economy, according to 98% of the companies that responded to the survey launched among the CDR members. More than half of the respondents estimated that it would take more than three months to implement the new system and that it would cause major difficulties in the reporting structure within the group. Moreover, nine out of ten companies believe that the measure will have a small or insignificant impact in combating tax evasion. “From the CDR point of view, the split VAT payment should be optional and it should be applied only in relations between legal entities and companies in insolvency and bankruptcy,” according to CDR. On October 13, prime minister Mihai Tudose said that the VAT payment will only be mandatory for insolvent or bankrupt firms and the companies that have registered more than two delays in paying their VAT to the state. Senate president Calin Popescu Tariceanu confirmed yesterday that the Government emergency ordinance that made the split VAT system mandatory for all companies in Romania starting January 1, 2018 will be changed by the Senate. However, Opposition parties asked the Government to make the change by emergency ordinance. editor@romania-insider.com