Foreign Investors Council (FIC) says the mandatory introduction of the split VAT system as of January 1, 2018 will have a serious negative impact on the Romanian business environment for both SMEs and big companies.
“The administrative and bureaucratic burden of honest taxpayers with measures as the split VAT payment is not a good strategy to combat tax evasion on long-term. This measure will cause major operational bottlenecks in the companies’ activity, which in the initial phase will have to carry out all the necessary steps to implement the new system,” FIC comments on Facebook.
At the same time, the state treasury units will be affected, which will be hit by a large number of requests for VAT accounts, as well as the National Agency for Fiscal Administration (ANAF), which will have to approve a significant number of transfer requests from the VAT account to the current account a soon as possible.
In FIC opinion, it would be necessary to consult the European Commission first, and to draw up an impact study to highlight the effect on tax evasion and business environment costs.
An alternative measure would be to implement this system only as a pilot project and only in certain sectors involving a high degree of tax evasion or non-compliance with the timely payment of VAT to the state budget, which can be extended if the system proves to be efficient, FIC members consider.
Also, in order to combat evasion, it should be developed and implemented urgently measures that have proved effective in other EU Member States such as the SAF-T (Standard Audit File for Tax Purposes), the obligation to use certified invoicing software, or maintaining a centralized VAT monitoring database.