Conditions for the Registration for VAT Purposes

Order no. 3840/2015 has been issued in application of Article 316 of the Tax Code, according to which the criteria are laid down for conditioning the registration for VAT purposes for companies with the seat of economic activity in Romania, established under Law no. 31/1990, as republished, with the subsequent amendments and additions, which are subject to registration with the Trade Register. Based on these criteria, the tax authorities determine whether the taxable person justifies the intention and has the ability to carry out economic activity, to be registered for VAT purposes.

The criteria conditioning the registration for VAT purposes are as follows:

• The taxable person in a position of not carrying out economic activities on the premises intended as a registered office and/or secondary offices or outside them (for assessing this criterion, the taxable person shall submit an affidavit);
• None of the directors and/or shareholders of the taxable person or the taxable person itself has any of the offences and/or deeds stipulated by Article 4, paragraph (4) (a) and (b), of the Government Ordinance no. 39/2015, concerning the tax offence record, entered in its respective tax offence record (in the case of joint stock companies or partnerships limited by shares, the criterion refers only to directors);
• The assessment, based on the analysis conducted by the tax authorities, of the taxable person’s intention and ability to carry out economic activities (for assessing this criterion, the taxable person shall file an affidavit – Form 088).

The competent tax authorities shall not register for VAT purposes any taxable person who does not meet the aforementioned criteria.

The Order of the President of the National Agency for Fiscal Administration (N.A.F.A.) no. 3841/2016 approves the model and content of Form 088 – „Affidavit for assessing the intention and ability to carry out economic activities involving operations from the scope of VAT”.

Form 088 shall be submitted:

• By companies applying for registration for VAT purposes, pursuant to Article 316, paragraph (1) (a), of the Tax Code, on the same day as submitting the application for registration with the Trade Register to the Trade Register Office;
• By companies applying for registration for VAT purposes, pursuant to Article 316, paragraph (1) (b) or (c) or paragraph (12), of the Tax Code;
• By companies registered for VAT purposes in case of a change of registered office, a change of directors and/or shareholders.

The Form shall be filled out using the software which can be downloaded from the website of www.anaf.ro .

The 394 Declaration

The Order of the President of the National Agency for Fiscal Administration (N.A.F.A.) no. 3769/2015 has been issued on declaring the deliveries/supplies and acquisitions carried out in the national territory by persons registered for VAT purposes and approving the form and content of the Informative Declaration on the deliveries/supplies and acquisitions carried out in the national territory by persons registered for VAT purposes. The Form shall be filled out using the software which can be downloaded from the website of www.anaf.ro and shall be submitted by the 25th of the month following the end of the reporting period for the submission of Declaration 300, except December, when the deadline for the submission of Declaration 300 is the 21st of December.

Taxable persons registered for VAT purposes in Romania are required to declare all the deliveries of goods, supplies of services and acquisitions of goods and services, in Romania, to/from any taxable person. In the old format of Declaration 394, only the deliveries of goods, supplies of services and acquisitions of goods and services, in Romania, to/from any taxable person registered for VAT purposes were declared.

Using the new format, one shall declare:

• In the case of persons required to pay tax:
  1. All the invoices issued during the reporting period (i.e. advances, VAT on collection, „reverse charge&rdquo);
  2. Self-invoices;
  3. Simplified invoices;
  4. All the tax receipts including tax receipts meeting the conditions of a simplified invoice, regardless of whether or not they feature the VAT code of the recipient.
• In the case of taxable persons conducting acquisitions:
  1. All the invoices received during the reporting period (i.e. VAT on collection, „reverse charge”);
  2. Simplified invoices;
  3. Tax receipts meeting the conditions of a simplified invoice if they feature the VAT code of the recipient;
  4. The notes of acquisition of goods and the pages from the agricultural product marketing books, in the case of acquisitions from individuals.

The new model of the Declaration shall be submitted even for the reporting periods in which no operations were carried out.

The provisions of this Order shall apply starting with the operations conducted during the first quarter of 2016 and come into force on 1 April 2016.

The Procedure related to Inactive Persons

The Order of the President of the National Agency for Fiscal Administration (N.A.F.A.) no. 3846/2015 has been issued for the application of Article 92 of the Tax Procedure Code, according to which the taxpayer is declared inactive and is the subject of the effects of inactivity, if it is in one of the following situations:

• It does not fulfil, over the course of a calendar semester, any reporting obligation prescribed by law;
• It avoids the checks carried out by the central tax authority by declaring tax domicile identification data which do not allow the tax authority to identify it;
• The central tax authority finds that it does not operate at said tax domicile;
• The temporary inactivity registered with the Trade Register;
• The life of the Company has expired;
• The Company no longer has statutory bodies;
• The length of holding the premises intended a registered office has expired.

In view of declaring a taxpayer as inactive, the competent tax authority issues a decision, and, for reactivation purposes, the taxpayer shall cumulatively meet the following conditions:

• Fulfilling all the reporting obligations required by law;
• Having no outstanding tax obligations;
• The central tax authority finds that it operates at the stated tax domicile;
• No longer being in the position for which it was declared inactive, according to the entries in the registers in which it was enrolled.

This Order also establishes the procedure to be followed by the tax authority for the process of declaring taxpayers as inactive and also approves the forms related to this process.

The Procedure related to the Tax Domicile

The Order of the President of the National Agency for Fiscal Administration (N.A.F.A.) no. 3845/2015 has been issued in application of Articles 31 and 91 of the Tax Procedure Code, according to which a tax domicile means, for the tax claims managed by the central tax authority, as follows:

• For individuals, the address of domicile, by law, or the address where they actually live, for when it differs from their domicile;
• For individuals carrying out economic activities independently or exercising liberal professions, the seat of their activity or the location where their main activity actually takes place;
• For legal entities, the registered office or the location where the administrative management and actual business management take place, if they are not performed at the declared registered office;
• For associations and entities without legal personality, their headquarters or the location where the main activity actually takes place.

This Order hereby approves:

• The procedure of registration/change of tax domicile for taxpayers subject to registration with the Trade Register;
• The procedure of registration/change of tax domicile for taxpayers subject to registration with the tax authorities;
• The procedure of change of the tax domicile for taxpayers – individuals holding a Personal Identification Number;
• The procedure of registration/change ex officio of the tax domicile.

The Procedure of VAT Exemption

The Order of the Minister of Public Finance no. 4145/2015 has been issued in application of Article 9 of Law no. 294/2015 on the implementation in Romania of projects funded by the NATO Security Investment Programme. According to the article, the supplies of goods and services and the execution of works intended to implement N.S.I.P. projects in Romania, regardless of the funding, are exempt from VAT.

This Order approves the exemption from the payment of the Value Added Tax.

The declarations shall be submitted electronically as PDF files, with attached XML files.

Under the same article, Order no. 4031/2015 of the Minister of Public Finance is also issued and approves the model of Form 401 – „Informative Declaration on the real estate held by the residents of other EU Member States in Romania”. The Form shall be filed annually, by the 10th of April, by each mayoralty, if there are citizens of other Member States who own property within their jurisdiction.

The Amendment of the Accounting Regulations

The Order of the Minister of Public Finance no. 4160/2015 amends and supplements the Accounting Regulations on the individual annual financial statements and the consolidated annual financial statements approved by the Order of the Minister of Public Finance no. 1802/2014.

The entities amending their accounting policy in terms of the shift from the revaluation method to the method of the tangible asset cost shall adjust the sums shown in account 105 „Revaluation reserve” depending on how they have transferred the sums to account 117 „Retained earnings representing the revaluation reserve surplus”.

The Order makes clarifications on:

• Entering in the books the trade discounts, the interest on the borrowed capital, the valuation of government securities recognized as financial assets;
• Establishing a new period of depreciation under certain conditions;
• The categories of tangible assets monitored separately;
• The treatment of an investment property if the entity decides to dispose of it;
• The cost of routine revisions and inspections;
• The shares received by the entity as a result of the incorporation of the reserve or share premiums;
• The accounting for green certificates;
• The accounting for operations carried out under trust deeds;
• The recognition of financial income.

The amendments enforced by this legal act include the following:

• The Chart of Accounts is amended by changing some old accounts and introducing new ones;
• A new chapter is inserted: „Structure of the balance sheet and profit and loss account”;
• The specifications on the function of a series of accounts are amended;
• For the financial year of 2015 the entities enforcing the Order of the Minister of Public Finance no. 1802/2014 shall prepare annual financial statements corresponding to the category within which they fall under section 9 of the relevant regulations; the fulfilment of the criteria under section 9 shall be based on the trial balance drawn up as at 31 December 2015;
• Medium and large entities, as well as public interest entities prepare financial statements subject to the structure specified in section 21 of the Order of the Minister of Public Finance no. 1802/2014; those financial statements shall be subject to statuary audits;
• Clarifications have been made on those opting for a financial year different from the calendar year.

The provisions of this Order shall apply starting from the financial statements of 2015.

The Amendment of the Ordinance on the Cancellation of Ancillary Obligations

Law no. 4/2016 approves the Government Emergency Ordinance no. 44/2015 awarding various tax incentives (the cancellation of penalties and a share of the interest), and also introducing various amendments and additions.

The Law provides for the cancellation of the penalties and a share of 54.2% of the interest related to the main obligations with payment deadlines up to 30 September 2015 and individualized in taxation decisions issued by the tax inspection and notified between 1 October 2015 and 21 October 2015.

The penalties and interest on payment obligations representing charges set, by law, by institutions against the employees shall also be cancelled if the main obligations are settled by 31 March 2016.

This legal act brings various additions concerning the taxpayers who benefit from payment rescheduling and/or the suspension of a tax administrative act and wish to benefit from the cancellation of the ancillary obligations.

The Approval of the Implementing Rules

The Government Decision no. 1/2016 approves the Implementing Rules enforcing Law no. 227/2015 on the Tax Code.