Draft legislation in Romania - KPMG Global
Share with your friends

Romania: Draft legislation clarifies VAT split-payment mechanism

Draft legislation in Romania

Draft legislation has been issued in Romania to clarify certain aspects of the value added tax (VAT) split-payment mechanism. The clarifying draft legislation provides:


Related content

  • The VAT split payment would be optional beginning 1 October 2017 and mandatory beginning 1 January 2018.
  • There would have to be at least one VAT account for VAT collected and paid.
  • The deadline for suppliers paying VAT into their VAT account for payments received from customers via credit/debit cards or cash substitutes would be extended to seven working days from the date of the receipt of the payment for the goods/services supplied.
  • The tax administration would be required to approve the transfer of the amounts from the VAT account into the current account within three working days.
  • Time periods have been introduced, during which corrections could be made without penalties.
  • Taxpayers that use the VAT split-payment mechanism between 1 October 2017 and 31 December 2017 would benefit from a 5% reduction in corporate income tax, as well as the cancellation of any penalties for late VAT payment for amounts of VAT payable as of 30 September 2017.


Read an August 2017 report [PDF 358 KB] prepared by the KPMG member firm in Romania


As originally proposed, all taxable persons and public institutions registered for VAT purposes would be required to open separate VAT accounts for receiving and making VAT payments. VAT accounts would be opened, by default, with the various treasury units within the tax offices where taxpayers are registered. However, any taxpayer could elect to open an account with a commercial bank (although, currently, not all banks operating in Romania have the relevant infrastructure to open these types of bank accounts). The VAT split-payment mechanism would apply to all taxable supplies of goods/services, from a VAT perspective, with the exception of transactions subject to the special regimes. Read an August 2017 report prepared by the KPMG member firm in Romania. The draft legislation (described above) is intended to clarify these proposals.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


Request for proposal