The main amendment introduced by the Government through an Emergency Ordinance extends the application of the reduced VAT rate of 5% to sporting and recreational activities as well as to accommodation, restaurant and catering services.
The main amendment introduced by the Government through an Emergency Ordinance extends the application of the reduced VAT rate of 5% to sporting and recreational activities as well as to accommodation, restaurant and catering services. The reduced rate will be applied as from 1 November 2018. The Ordinance also specifies the payment deadlines for the amounts established by tax decisions for the period 2014 - 2017 to be issued by A.N.A.F., as well as the granting of bonuses for early payment.
Emergency Ordinance no. 89/2018 (hereinafter referred to as "the Ordinance") has been published in the Official Journal of Romania (no. 854; 9 October 2018), and makes changes to the Fiscal Code (Law no. 227/2015).
The changes reduce the VAT rate for certain activities, grant bonuses for early payment of amounts set by annual tax decisions for the 2014-2017 period, and clarify the tax implications of changing accounting policies as a result of the initial adoption of a new international financial reporting standard.
VAT rate reduced from 9 to 5 percent for certain activities and sectors
The VAT rate will be reduced for sports and leisure activities, as well as for accommodation, restaurant and catering services.
Specifically, starting from 1 November 2018, the 5% reduced rate will also be extended to:
Changing the VAT rate entails tax adjustments for specific situations covered by the Fiscal Code (e.g. advances received).
Bonuses for early payment of amounts set by annual taxation decisions for 2014-2017 and other changes:
Rules for taxpayers applying IFRS as a basis for accounting
The Ordinance amends the Fiscal Code on rules for taxpayers applying IFRS as a basis for accounting. This extends the principles currently applied to the implementation of IFRS as a basis for accounting and changes to accounting policies due to the initial adoption of a new international financial reporting standard. At the same time, it clarifies the application of art. 21 lit. b) section 3, on recognizing items of a similar nature at the time of initial adoption of IFRS as a basis for accounting or when implementing new standards, and for items similar to those referred to in art. 26 of the Fiscal Code - Provisions / adjustments for depreciation and reserves.
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