21 December 2017
On the 14 December 2017, the Romanian government approved a new law that significantly alters which businesses are affected by the new VAT split payment legislation, which is to be introduced on 1 January 2018.
Originally this was going to apply to all VAT registered businesses in the country, however the new law states that it will now only apply to companies with an overdue VAT debt as at 31 December 2017 and companies who are over 60 days late in paying their VAT obligations during 2018.
As stated previously the split payment procedure will require the Romanian VAT registered business to open a special, secure bank account specifically used for receiving and making VAT payments. The vendor’s customers will then pay the VAT amounts charged by the vendor directly into this special secure bank account. At the same time, they will have to make a separate payment of the net amount to the vendor’s regular bank account. The Romanian tax authorities will then be able to monitor the special VAT bank account and reconcile this with the vendors' VAT reporting.