In the Official Gazette (Part I) no.242 of 11 March 2022, ANAF Order no. 352/2022 was published for the approval of the procedure for the settlement of VAT negative amounts with the option of refund.
The National Tax Administration Agency has published Order 352/2022 for the approval of the new procedure for VAT refunds, taking into account the fact that an amendment to the Tax Procedure Code has entered into force, which will apply from 1 February 2022 (amendment of Article 169).
According to article VI paragraph (4) of the OG (Government Ordinance) 11/2021, the regulations apply from 1 February 2022. With this legislative amendment, the special rules for the settlement of VAT negative claims with the option of reimbursement, approved by Article XI of Government Emergency Ordinance No. 48/2020 on some financial-fiscal measures, have been made permanent.
According to these legal provisions, VAT is refunded with the subsequent tax inspection, except in certain situations regulated separately by category of taxpayer.
For large and medium-sized taxpayers, VAT refunds are granted after the advance tax inspection only in the following situations:
– the taxpayer/payer has facts on his/her tax record that are sanctioned as offences;
– the central tax authority, on the basis of the information it has, establishes that there is a risk of an undue refund;
– the taxpayer/payer concerned has been subject to voluntary liquidation proceedings or insolvency proceedings have been opened, except for those for whom a reorganisation plan has been confirmed, in accordance with the special law.
For taxpayers other than large and medium taxpayers, VAT refunds are granted after the advance tax inspection and in the following situations:
– the taxpayer/payer submits the first tax return with negative VAT amounts with the option of a refund, after registration for VAT purposes;
– the balance of the negative VAT amount claimed for refund comes from a number of periods greater than the number of reporting periods used in a 12-month period.
Thus, given that the amendment to Article 169 of the Tax Procedure Code applies from 1 February 2022, it was necessary to develop a new procedure for resolving claims with negative VAT amounts with the option of refund, adapted to these legislative changes.
Please note that by means of Order 352/2022:
• The procedure for the settlement of claims with negative amounts of value added tax with the option of refund, set out in Annex No. 1, is approved.
• The model and content of the following forms are approved:
a) Decision for refund of value added tax, as set out in Annex 2;
b) Notification concerning the extension of the deadline for the settlement of the VAT return with negative amounts with the option of refund, as set out in Annex 3;
c) Decision on the closure of the procedure for settling claims with negative VAT amounts with the option of refund for taxpayers declared inactive for tax purposes, as provided for in Annex no. 4.
Important! The claims with negative VAT amounts with the option of refund pending at the date of application of this Order shall be settled according to the legal rules in force at the time of their submission.
NEW PROCEDURE FOR SETTLING CLAIMS WITH NEGATIVE VALUE ADDED TAX AMOUNTS WITH AN OPTION TO REFUND
The procedure shall be applied by the department responsible for the settlement of claims with negative VAT amounts with the option of refund, hereinafter referred to as the specialist department, within the competent tax authority.
The competent tax authority is the tax authority in whose territorial radius the taxable person is domiciled for tax purposes or in whose records the taxable person is registered as a tax payer or the tax authority established according to Article 35 of the Tax Procedure Code, for taxable persons who are not established in Romania according to Article 266 paragraph (2) of Law no. 227/2015 on the Tax Code, as amended and supplemented (Tax Code), as appropriate.
In order to solve the claims with negative VAT amounts with the option of refund, for the verification of the conditions provided for in Article 169 of the Tax Procedure Code, the specialized department shall set up and update both the special database on the risk of undue VAT refund, according to the provisions of Section 2, and the special database on taxable persons registered for VAT purposes for whom voluntary liquidation proceedings have been initiated or insolvency proceedings have been opened, according to the provisions of Section 3.
Establishment and management of the special database on the risk of undue refund of VAT
The special database on the risk of undue refund of VAT is a list in which are registered taxable persons, about which the tax authorities have information that may present a tax risk of undue refund, according to the provisions of Article 169 paragraph (4) of the Code of Tax Procedure.
The special database shall be set up by the specialised department and shall contain information on the taxable persons for whom reports have been drawn up.
The special database contains information on the name/name and surname of the taxable person registered for VAT purposes, the VAT registration code, the number and date of the report proposing the inclusion in the special database, the structure within the tax authority that made the proposal, the reasons for the entry in the database, the number and date of the report proposing the retention in the database, the reasons for the retention in the database, the number and date of the report proposing the removal from the database, the structure proposing the removal, the reasons for the removal, if applicable.
As soon as the tax inspection structures, tax administration structures, the General Legal Directorate or territorial legal structures, the General Anti-Fraud Directorate have information of the kind mentioned in Article 169 paragraph (4) of the Tax Procedure Code, they shall inform the specialised department of this fact. The proposal for the registration of the taxable person in the special database shall be made by a reasoned report, approved by the coordinator of the structure making the proposal.
Taxable persons for whom referrals are received will be entered by the specialist department in the special database.
We mention that the reasoned report contains the complete findings on all the circumstances in the case, justifying the existence of fiscal risk in terms of granting an undue refund of value added tax to the taxable person in question.
According to Order 352/2022, for the purposes of this procedure, taxable persons are considered to be at risk of undue refund of VAT if they fall into any of the following situations:
a) the tax authorities receive official documents from other institutions which relate to tax matters and are found to have a bearing on the granting of an undue VAT refund.
The reports shall be drawn up by the structures of the tax authority which have received the above-mentioned official documents for settlement, only if they contain at least one of the following elements:
– the operations/transactions were carried out with the purpose of evading the fulfilment of tax obligations from the point of view of value added tax;
– the estimated implications for the VAT tax base.
The reports will also include at least one category of information from which elements such as:
– information showing that the taxable person has determined, erroneously or in bad faith, taxes and duties with an impact on the reduction of the taxable amount of VAT and related value added tax;
– information showing the existence of indications of omission, in whole or in part, of the recording in the accounting records or in other legal documents of the commercial operations carried out or the income realised, with influence on the value added tax;
– information showing that the accounting records or other legal documents show expenses which are not based on real transactions or that other fictitious transactions are recorded or that double accounting records have been kept, using bookkeeping or other means of data storage, with an impact on value added tax.
If the information comes from criminal investigation authorities, the reports are drawn up only at the time of the initiation of criminal proceedings;
a) in the framework of tax control actions, facts have been found which may constitute elements of offences with tax implications. In this regard, the reports drawn up by the tax authorities that carried out the tax control shall detail the operations/transactions carried out with an influence on the value added tax base, operations that may constitute elements of a criminal offence, specifying the legal provisions violated for the situation identified. In this case, the report shall include at least the elements referred to in point a);
b) during the subsequent tax inspection, differences of more than 10% of the refunded amount, but not less than 50,000 lei for each VAT return that was subject to the subsequent tax inspection, were established.
The reports drawn up by the tax inspection authorities will contain information on: the additional differences found, their amount, the legal provisions violated, the accidental or continuous nature of the violation of the legal provisions, information on the voluntary compliance of the taxable person, other relevant information in the motivation of the proposal for inclusion in the special database;
c) significant inconsistencies have been found, verified and confirmed by the tax authority, between the information entered in the information returns on supplies and acquisitions made within the national territory (form 394) by persons registered for VAT purposes submitted by the taxable person and those submitted by the business partners and/or significant discrepancies between the information entered in the information returns on intra-Community supplies and acquisitions (form 390 VIES – recapitulative statements) submitted by the taxable person and those submitted by the business partners and transmitted to the tax authority via the VAT information exchange system between the Member States of the European Union
The report drawn up by the structure of the tax authority that made the finding shall contain information showing that the significant inconsistencies are generated by the taxable person in question, that they have not been subsequently corrected and that they have a relevant influence on the granting of an undue value added tax refund.
At the same time, it will mention in its content the way of confirming the inconsistencies, such as: notifying the taxpayer and confirming the inconsistencies, requesting information from third parties (including requesting information through SCAC – Standing Committee for Administrative Cooperation), on-the-spot verification.
Upon receipt of the report on the taxable person for whom the tax authorities have established that there is a risk of undue VAT refund, after entering it in the special database, the specialised department checks whether there are any negative VAT statements with the option of refund pending for the taxable person in question.
Following the registration in the special database, the specialised department shall draw up a note establishing the taxable person’s classification in the category of taxable persons presenting a risk of undue refund of VAT, shall ascertain the fulfilment of the condition provided for in Article 169 paragraph (2) letter b) or paragraph (3) letter b) of the Tax Procedure Code, as the case may be, and shall propose the cancellation of the procedural acts drawn up as a result of the initial classification of the outstanding claims in the category of those for which no advance tax inspection is carried out. The note drawn up by the specialist department shall be submitted to the head of the tax unit for approval.
In order to resolve the claims with negative VAT amounts submitted by taxable persons registered in the special database, the specialised department shall request the structure of the tax authority that proposed the registration of the taxable person in the database to carry out an analysis in order to determine whether the taxable person still presents a risk of undue refund.
The structure of the tax authority that proposed the inclusion or retention of the taxable person in the special database shall send a report to the specialist department, within a maximum of 10 days from the date of receipt of the request, with the proposal to retain or delete, as appropriate, the taxable person concerned in/from the special database.
In order to analyse and approve or reject the proposals for maintaining or deleting them in/from the special database, a committee is set up at the level of each county public finance administration, at the level of the General Directorate for the Administration of Large Taxpayers, at the level of the Tax Administration for Medium Taxpayers in Bucharest, at the level of the administrations of sectors 1-6 of the public finance in the municipality of Bucharest, as well as at the level of the Tax Administration for non-resident taxpayers.
The removal of the taxable person from the special database is done both at the motivated proposal of the structure of the tax authorities that proposed the registration and at the proposal of other tax authorities involved in the refund procedure, by the 5th of each month, with the approval of the coordinator of the structure in question.
It is important to mention that every year, by 31 January, the specialised department checks and removes from the special database taxable persons who, during the previous year, were removed from the tax records.
Submission, registration and processing of VAT returns
VAT returns shall be submitted by taxable persons registered for value added tax purposes in accordance with Article 316 of the Tax Code, by electronic means or by electronic remote transmission systems, within the deadlines provided for by the Tax Code.
VAT returns shall be processed and analysed in the chronological order of their registration with the tax authority.
VAT returns submitted by deadlines other than those entered in the tax vector shall not be processed and returned to taxable persons.
Correct VAT returns are entered into the database.
In the event that the processing of VAT returns results in errors and the return is not validated, the tax authorities notify the taxable person for correction.
After receipt and processing of VAT statements, they are grouped into the following categories:
a) positive VAT statements (with VAT payable);
b) statements with negative amounts, as follows:
b.1) statements with negative amounts with the option to refund;
b.2) negative amounts without option to repay (amounts to be carried forward to the next period’s statement).
Every day, all processed VAT statements are sent to the “Payer Register” department, on the basis of the Register of obligations declared to the state budget and the delivery-receipt note provided for by the regulations on the organisation of payer registers.
The statements with positive amounts, as well as those with negative amounts without the option of reimbursement are filed in the tax file of the taxable person.
According to the Procedure, the negative amounts of the statements with negative VAT amounts with option of refund are transferred from the payer’s records to a separate record and are transmitted daily, on the basis of the delivery-receipt note, to the department in charge of solving the statements with negative VAT amounts with option of refund, in order to verify the fulfilment of the conditions for refund, with the subsequent tax inspection.
Legal basis:
-Government Ordinance (OG) no.11/2021 amending and supplementing Law no. 207/2015 on the Tax Procedure Code and regulating certain tax measures;
-ANAF Order no.352/2022 for the approval of the procedure for the settlement of VAT negative amounts with the option of reimbursement.