Situation:
The sole associate of ABC SRL, a Romanian microenterprise, regularly orders food using platforms such as Glovo or Bolt. Payments are made from the company account, but the receipts and transport invoices are often issued in the name of the associate. This raises questions about the tax treatment of such expenses.
Tax Treatment:
Microenterprises in Romania pay tax on revenues, not profits, so deductibility of expenses is not the primary concern. However, protocol expenses should still be treated with caution. In the event of a tax audit, such expenses might be reclassified as:
- Employee benefits in kind;
- Income from other sources (taxed at 10% withholding);
- Dividends (taxed at 8% withholding).
Documentation Required:
To justify the protocol nature of these expenses:
- A receipt or invoice is required (mandatory for amounts over €100);
- An internal decision by the administrator should be issued to explain the business purpose of the expense.
VAT Implications:
According to the Romanian Fiscal Code (Art. 270 para. 8(c)) and its methodological norms, free gifts under 100 RON (excluding VAT) given as part of protocol actions are not considered taxable supplies.
If this threshold is exceeded:
- A self-invoice must be issued under Art. 319 para. 8;
- It must show the taxable base and collected VAT;
- It must be reported in the VAT return (Form 300) and in e-Invoice (e-Factura);
- Deadline: no later than the 15th day of the month following the transaction.
Accounting Example:
- Recording the invoice for protocol purchases:
6231 Protocol Expenses = 401 Suppliers
4426 Deductible VAT = 401 Suppliers
- Recording VAT collected (threshold exceeded) and issuing self-invoice:
6231 Non-deductible Protocol = 4427 Collected VAT