VAT system for collection in 2019. Eligibility conditions and provisions

In 2019, with regard to the VAT system at checkout, we have the following two important components:

– the VAT requirement is deferred until the date of collection of the full/partial consideration for the delivery of goods, the provision of services;

– the VAT deduction right is deferred until the date when the VAT related to the goods/ services were paid.

Persons who are eligible for the application of the VAT system for the collection in 2019:

– taxable persons registered for VAT purposes according to art. 316, which have the headquarters of the economic activity in Romania, which in the previous year did not apply the VAT system to the collection, whose turnover in the previous calendar year did not exceed the limit of 2,250,000 lei and opts for the application of the VAT system at the collection.

These persons:

– apply the VAT system to the collection starting with the first day of the second fiscal period of the year following the one in which it did not exceed the limit, until the end of the calendar year in which they opted to apply the system, provided that at the date of exercising the option (date of January 25 inclusive) not to have exceeded the limit for the current year

– must submit to the competent tax authorities the form 097 “Notification regarding the application of the VAT system at collection” from which it will result that it chooses to enter the system. Deadline: January 25 inclusive.

It should be mentioned: It is considered that the taxable person has tacitly opted for the continued application of the VAT system at the collection, not having the obligation to submit the notification, if in the previous year he applied the VAT system at the collection and his turnover did not exceed the limit of 2.250.000. Lei.

– taxable persons, who have their registered office in Romania, which are registered for VAT purposes according to art. 316 during the year and opts for applying the VAT system for the collection.

These persons apply the VAT system to the collection starting with the date of registration for VAT purposes and have to submit to the competent tax authorities the form 097 “Notification regarding the application of the VAT system at collection” from which it will result that they opt for the application of the VAT system at the moment of their VAT registration.

Legal basis – art. 282 paragraph (3) letter a), letter b) and paragraph (5), art. 324 paragraph (12)

The turnover for the calculation of the limit of 2.250.000 lei is annual and consists of the total value of the deliveries of goods and of the services of taxable and / or VAT exempt services, as well as of the operations resulting from economic activities for which the place of delivery/rendering is considered to be abroad, according to art. 275 and 278, realized during the calendar year – art. 282 para. (3) lit. a)

When determining the turnover of 2,250,000 lei, which serves as a reference for calculating the limit of 2,250,000 lei, provided in art. 282 para. (3) letter a) from the Fiscal Code, the tax base registered on the rows from the tax return corresponding to the operations are considered:

– tax-exempt from VAT with/without the right of deduction

– operations resulting from economic activities for which the place of delivery/performance is considered as being abroad.

– the related regularization rows.

There are not taken into account:

– the amounts entered in the rows of the discount related to some fields of informative data such as the invoices issued after the fiscal inspection, information regarding the non-taxable VAT or the non-deductible VAT;

– the deliveries of goods/services provided during the period when the taxable person did not have a registration code for VAT purposes according to art. 316 of the Fiscal Code in case:

* to taxable persons who have applied the exemption regime and who are registered for VAT purposes

* to taxable persons whose registration for VAT purposes is canceled ex officio by the competent fiscal bodies according to art. 316 paragraph (11) lit. a) – e) and h) of the Fiscal Code and subsequently are registered according to art. 316 paragraph (12) of the Fiscal Code – point 26 (4) of the norms

Cessation of VAT system application at collection:

  • the taxable persons who apply the VAT system to the collection and the turnover exceeds the limit of 2,250,000 lei;

These persons:

– apply the system until the end of the fiscal period following the one in which the limit was exceeded.
– must submit to the competent tax authorities the form 097 “Notification regarding the application of the VAT system at collection” from which it will be shown that the limit has been exceeded and the application of the VAT system at the collection ceases.

Deadline: up to 25 inclusive of the month following the fiscal period in which the limit was exceeded.

in the case in which the taxable person who exceeds the limit does not submit the notification, it will be cleared ex officio by the competent fiscal bodies, starting with the date entered in the cancellation decision, from the Register of taxable persons applying the VAT system at the collection – art. 282 paragraph (5), point 26 (5) art. 324 para. (14)

– the taxable persons who apply the VAT system to the collection and the turnover does not exceed during the year the limit of 2,250,000 lei can renounce the application of the respective system anytime during the year.

These persons:

– must submit to the competent tax authorities the form 097 “Notification regarding the application of the VAT system at collection”, stating that the limit has not been exceeded and ceases the application of the VAT system at collection.

Term: between 1 and 25 of the month, except for the first year in which he opted for the application of the system.

The deletion of the respective person from the Register of persons applying the VAT system to the collection is performed by the competent fiscal bodies starting with the first day of the fiscal period following the one in which the notification was filed – art. 282 paragraph (5)

Provisions applicable in the following situations:

The taxable persons who applied the VAT system to the collection and whose registration code for VAT purposes was canceled according to the provisions of art. 316 paragraph (11) letter a) – e) and h) of the Fiscal Code:

* for deliveries of goods / services performed before the cancellation for VAT purposes registration of taxable persons who applied the VAT system at collection, but whose tax dependability occurs during the period when the taxable person does not have a valid VAT code must to submit form 311 “Declaration regarding the value-added tax collected due by the taxable persons whose registration code for value-added tax purposes has been canceled according to art. 316 paragraph (11) letter a) – e), letter .g) or letter h) of Law No. 227/2015 on the Fiscal Code “by which it declares the collected VAT to be paid – art. 324 para. (10)

* for purchases made by taxable persons during the period when they applied the VAT system to the collection or who made purchases from taxable persons who applied the VAT system to the collection, for which the VAT deduction is exercised at the time of payment of the invoices to the suppliers, and which are removed from the records of the persons registered for VAT purposes, the unpaid VAT related to the respective purchases made before the removal of the records of the persons registered for VAT purposes is deducted in the first VAT return or, in a subsequent statement, if the payment was made during the period in which did not have a valid VAT code – point 67 (13) of the norms

The taxable persons who applied the VAT system to the collection and whose registration code for VAT purposes was canceled according to the provisions of art. 316 paragraph (11) lit. g) of the Fiscal Code:

* for deliveries of goods / services performed before the cancellation of registration for VAT purposes of taxable persons who applied the VAT system to the collection, but whose tax dependability occurs during the period when the taxable person does not have a valid VAT code must submit form 311 “Declaration regarding the value-added tax collected due by taxable persons whose registration code for value-added tax purposes has been canceled according to art. 316 paragraph (11) letter a) – e), letter. g) or letter h) of Law no. 227/2015 regarding the Fiscal Code “by which it declares the collected VAT to be paid – art. 324 para. (11)

* for purchases made by taxable persons during the period when they applied the VAT system at the collection or who made purchases from taxable persons who applied the VAT system at collection, for which the tax deduction is exercised at the time of payment of the invoices to the suppliers, and which are removed from the records of the persons registered for VAT purposes, the unpaid VAT related to the respective purchases made before the registration of the persons registered for VAT purposes is deducted, at the date of payment, in the situation in which the purchased goods were not in stock at the date of registration in VAT purposes.

The deduction is made by entering the amounts deducted in form 307 “Declaration regarding the amounts resulting from the correction of the adjustments/regularization of the value-added tax”. The respective amounts are refunded from the state budget – point 67 (12) of the norms

Persons who are not eligible to apply the VAT system at collection:

– taxable persons who are part of a single tax group;
– taxable persons who are not established in Romania;
– taxable persons who exceeded the ceiling of 2,250,000 lei in the previous year;
– taxable persons who register for VAT purposes according to art. 316 during the year and which exceeded the ceiling of 2,250,000 lei in the previous year or in the current calendar year, calculated according to the operations performed during the period in which the respective person had a valid VAT code – art. 282 para. (4)