Split VAT payment to become mandatory in Romania from next year

The split VAT payment will become mandatory in Romania from January 1, 2018, said yesterday the finance minister Ionut Misa. Optionally, companies may apply it from October 1 and receive facilities for doing so. They would benefit from a 5% corporate tax reduction. In addition, companies that don’t have their tax obligations up to date would be exempt from penalties if they apply the split VAT payment. This new mechanism would bring an additional RON 6 billion (EUR 1.3 billion) to the state budget between 2018 and 2020, according to Finance Ministry estimates. The VAT split payment means that the VAT is no longer paid by the buyer to the seller, but directly to the state budget in a separate account. The companies will have a free VAT account in Romanian currency lei at the treasury from January 1, 2018, based on the new "Split VAT" measure. editor@romania-insider.com