Changes regarding the VAT collection system

Regulation of the framework for applying the VAT collection system under the new conditions provided by Law no. 296/2020, respectively by reporting to the new ceiling of 4,500,000 lei and with the possibility of exercising the option to apply the system at any time during the year, by correspondingly modifying the articles of Law no. 227/2015 on the Fiscal Code which refer to the old limit

The measure eliminated the ambiguities of the legal provisions for the application of the VAT collection system.

According to the new amendments, the taxable person who opts for the application of the VAT collection system is obliged to apply the respective system at least until the end of the calendar year in which he opted for the application of the system, unless the turnover exceeds the ceiling during the same year. 4,500,000 lei, in which case the system is applied until the end of the fiscal period following the one in which the ceiling was exceeded.

If in the first year of application of the VAT collection system the taxable person does not exceed the ceiling of 4,500,000 lei, he can apply the VAT collection system until the end of the fiscal period following the one in which the ceiling of 4,500,000 lei, calculated for each calendar year in part, was exceeded during a calendar year. Any taxable person who has opted for the application of the VAT collection system and who does not exceed the ceiling of 4,500,000 lei during a year may renounce the application of the respective system at any time during the year, by submitting a notification to the competent fiscal body between 1 and 20 of the month, except for the first year in which he opted for the application of the system. The deregistration of the respective person from the Register of persons applying the VAT collection system is carried out by the competent fiscal bodies starting with the first day of the fiscal period following the one in which the notification was submitted.

It is important to note that taxable persons who apply the VAT collection system and who exceeded during January 2021 the ceiling of 2,250,000 lei, but did not exceed the ceiling of 4,500,000 lei, will not be removed from the Register of taxable persons who apply the VAT collection system.

According to the normative act, the provisions enter into force on March 1, 2021.