28 September 2017
The Romanian Government has now passed legislation on the value added tax (VAT) split-payment mechanism which will be introduced on a voluntary basis from 1 October 2017. This is with a view to making it compulsory for all VAT registered businesses from 1 January 2018.
The split payment procedure will require vendors 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.