Newsletter no. 3/2019

23/04/2019

SIMPLIFICATION OF VAT REGISTRATION FOR LEGAL ENTITIES WHO REGISTER OPTIONALLY

Decree No. 167/2019 of the President of the National Tax Administration Agency (ANAF) simplifies the procedure for legal entities to register as liable to VAT by option. These taxpayers will now be able to obtain the tax number on the day the application is submitted, without having to go through a consultation procedure, if they attach a declaration on their own responsibility to the application. The hearing procedure has so far made the examination process and the VAT registration of these companies considerably more difficult.

 

The most important aspects of the new procedure are as follows:

  • Taxpayers wishing to take advantage of the new procedure must submit to the competent tax authority, together with an application for registration as a VAT payer (form 110), proof that the declaration has been transferred under their own responsibility.
  • The information contained in the declaration must be provided by the managing directors and by shareholders whose share capital is greater than or equal to 25%. In the case of joint-stock companies, the declaration must only be completed by the managing directors.
  • The regulation defines the format and content of the form “Declaration on one’s own responsibility for registration for VAT purposes”. The form is exclusively transmitted online as a PDF file, signed with a qualified digital certificate. The declaration contains mainly tax information on the basis of which ANAF carries out the risk assessment. The format of the declaration can be found here.
  • If the declaration is submitted on your own responsibility without validation errors, i.e. the taxpayers do not represent an increased tax risk, the notice of registration for VAT purposes is issued on the day the application is submitted.
  • Within 15 days of submitting the application for registration as a VAT payer, ANAF’s valuation department will check the data entered in the declaration on its own responsibility. If it is determined that the data entered in the declaration do not correspond to the data available at ANAF, a note will be sent to the on-call service of the tax investigator with the deviations found, so that he can initiate appropriate examination measures.

 

  • If the declaration of personal responsibility indicates validation errors, the general procedure provided for in Annex 2 of Regulation No. 2.856/2017 regarding the determination of the criteria relating to the assessment of the tax risk found here will be applied.

 

Note: the Regulation applies only to companies applying for registration as VAT payers pursuant to Article 316(1)(c) of Act No. 227/2015 Tax Code, i.e. those opting for registration as VAT payers (the turnover is lower than the exemption amount, but they opt for the normal tax regime). The new procedure does not apply to taxpayers in insolvency proceedings pursuant to Act No. 85/2014.

 

OPERATION ICEBERG

ANAF (The National Agency for Tax Administration) has issued a press release stating that, at the beginning of the year, a wide-ranging tax audit measure for the largest Romanian companies in all sectors of the economy was launched. This measure is called “Operation Iceberg”. The full press release can be found here.

 

A few important details regarding this audit measure:

  • it will take place in the course of 2019;
  • it means an intensification of tax audits and the optimisation of audit procedures for large companies.
  • ANAF’s main audit focus is on combating the phenomenon of profit relocation, reviewing the way large companies manage their business relationships with other related companies and breaking transaction chains that serve to avoid tax liabilities;
  • In order to achieve these objectives, a working group of ANAF specialists has been set up to carry out tax audits on taxpayers in all sectors of the economy.

 

OBLIGATION TO CARRY  OUT AN INTERNAL AUDIT FOR COMPANIES SUBJECT TO MANDATORY AUDITS

An official announcement on the website of the Chamber of Romanian Certified Public Accountants (CAFR) points to the amendment of certain provisions concerning the organisation of the internal audit activity which the entry into force of Law 162/2017 has entailed with regard to statutory audits of annual accounts and consolidated annual accounts.

 

Thus, pursuant to Art. 65 (7) of Law No. 162/2017, companies are legally obliged to carry out an audit of the annual accounts, also obliged to organise and have carried out an internal audit.

Failure to carry out an internal audit by a company subject to an audit is considered illegal and is punishable by between 50,000 and 100,000 lei.

 

The law underlines the fact that the persons responsible for carrying out the internal audit must be active financial auditors in the Chamber of Romanian Auditors (CAFR). Therefore, if the internal audit is organised at group level (outside Romania) or carried out by an external auditor from outside Romania, the companies are obliged to ensure that the persons responsible for the organisation and coordination of the internal audit activity are active auditors registered in Romania in the CAFR.

 

THE DEADLINE FOR SUBMITTING THE TAX RETURN HAS BEEN POSTPONED TO  31.07.2019. (OUG No. 15/2019)

The deadline for submitting a tax return for private individuals with an estimate of income for 2019 and a final presentation of income for 2018, as well as the deadline for paying tax for income for the previous year, has been postponed to 31 July 2019. All those who have submitted their tax returns or submit them electronically by the end of July and who will pay the income tax and social security contributions due for 2018 will be exempted from 5% of the income tax and social security contributions of the previous year.

 

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