Situation: A company ABC SRL has the VAT code canceled by ANAF according to art. 316 paragraph (11), letter h) and exceeds the ceiling of 300,000 at the end of March 2021.
What are the fiscal effects in this situation?
Solution:
In this situation, it is not relevant that the company exceeded the ceiling of 300,000 lei at the end of March. The company has a VAT code, but it is canceled.
The first step is for ABC to take steps to recover the VAT code by remedying the causes that led to the cancellation of the VAT code.
Given that the tax authority has ordered the cancellation of the VAT code of the company, then there is the obligation to submit the last VAT return (regardless of the fiscal period of the company) until the 25th of the month following that in which this cancellation decision was communicated. and VAT.
According to the provisions of art.11 par. (8) and (9) of the Fiscal Code:
(8) Taxable persons established in Romania, whose registration for VAT purposes has been canceled according to the provisions of art. 316 paragraph (11) letters c) – e) and letter h), do not benefit, during the respective period, from the right to deduct value added tax related to the acquisitions made, but are subject to the obligation to pay the VAT collected, in accordance with the provisions of Title VII, related to the taxable operations carried out during the respective period. In case of registration for VAT purposes according to art. 316 para. (12), the taxable person exercises his right of deduction for the acquisitions of goods and / or services made during the period in which he had the registration code for VAT purposes canceled, by registering in the first tax return provided in art. 323 submitted after registration or, as the case may be, in a subsequent statement, even if the invoice does not include the registration code for VAT purposes of the taxable person.
After registration for tax purposes according to art. 316 para. (12), for the deliveries of goods / services made during the period in which they had the registration code for VAT purposes canceled, the taxable persons issue invoices in which they distinctly record the value added tax collected in the respective period, which is not registered in the tax return submitted according to art. 323.
(9) Beneficiaries who purchase goods and / or services from taxable persons established in Romania, whose registration for VAT purposes has been canceled according to the provisions of art. 316 para. (11) lit. c) – e) and letter h) and were registered in the Register of taxable persons whose registration for VAT purposes according to art. 316 was annulled, does not benefit from the right to deduct the value added tax related to the respective acquisitions, except for the acquisitions of goods made within the foreclosure procedure and / or the acquisitions of goods from taxable persons in bankruptcy procedure according to Law no. 85/2014, with subsequent amendments and completions. In case of registration for VAT purposes according to art. 316 para. (12) of the supplier / provider, the beneficiaries who purchased goods and / or services during the period when the supplier / provider had the registration code for VAT purposes canceled exercises the right to deduct VAT for those acquisitions, based on invoices issued by supplier / provider according to par. (8), by registering in the first tax return provided in art. 323 submitted after the registration of the supplier / provider or, as the case may be, in a subsequent statement.
Thus, having the VAT code canceled, the company does not have the right to deduct the expenses regarding the VAT for the realized acquisitions, and moreover, it will have the obligation to pay the VAT collected to the state budget. The collected VAT will have to be declared to the competent fiscal body through form 311 “Declaration regarding the value added tax due by the taxable persons whose registration code for VAT purposes has been canceled”.
It is important to mention that, when re-registering for VAT purposes, the company will have the right to deduct for purchases of goods or services made during the period in which it had the registration code for VAT purposes canceled, by entering the tax in the first VAT return. submitted after re-registration or in a subsequent statement (even if the invoice does not include the VAT code)
As previously specified, during the period when the VAT code is canceled ex officio, the company cannot exercise its right of deduction, neither for deductible, non-exigible VAT, on balance, nor for VAT related to purchases of goods and services made after cancellation VAT code.
During the period when the VAT code is canceled, for the deliveries of goods or services performed, the collected VAT that is not registered in the VAT return will have to be highlighted separately.
Thus, the company can no longer submit the VAT return code 300, through which to report the amount of deductible VAT, but also to make the settlement with the state budget by paying the difference between the collected VAT and the deductible VAT.
Moreover, the company can no longer use VAT accounts 4426, 4427, 4428, 4423, 4424, but only account 446 to record the amount of VAT collected for taxable operations, due to the state budget, reported through the form code 311.
For deliveries of goods and services, during the period when the company has the VAT code canceled, it must issue invoices to the beneficiaries, even if they do not benefit from the VAT deduction.
After the re-registration of the company for VAT purposes, the company will issue invoices with the minus sign and with the plus sign for the beneficiaries, following that they will exercise their right to deduct VAT, based on these invoices.
Reactivation of the VAT code:
According to art.92 paragraph (5) of the Code of Procedure, the taxpayer / payer declared inactive according to par. (1) let. a), d) – g) shall be reactivated if the following conditions are met, cumulatively:
- a) fulfills all the declaratory obligations provided by law;
- b) does not register outstanding fiscal obligations.
It is important to specify that the registration in the Register of inactive / reactivated taxpayers / payers is made by the issuing central fiscal body, after the communication of the decision to declare inactivity / reactivation, within maximum 5 days from the date of communication.
The decision to declare inactivity / reactivation takes effect against third parties from the day following the date of registration in the mentioned register.
Thus, the reactivation of the company and the acquisition of the VAT code consists in going through the steps consisting in remedying the causes that led to the cancellation of the VAT code.
Legal basis:
– Fiscal Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), with subsequent amendments and completions;
– Fiscal Procedure Code (approved by Law no. 207/2015, published in the Official Gazette no. 547 of 23.07.2015), with subsequent amendments and completions;
– Methodological Norms for the application of the Fiscal Code (approved by HG no. 1/2016);
– www.anaf.ro