Situation:
A company receives the goods free of charge from an external supplier, paying VAT and registered in VIES. This type of merchandise is currently purchased for resale. The goods received are accompanied by an invoice with a value of 0.
The free goods are intended for the provision of samples for product testing or for demonstrations at points of sale.
What is the accounting and tax treatment of this operation?
Solution:
The free acquisition of goods does not represent a taxable operation in Romania because the cumulative conditions from article 268 paragraph (1) from letter a) to letter d) of the Fiscal Code are not fulfilled, respectively the condition from letter a), provisions that provide that, from the point of view of the tax, there are taxable operations in Romania that cumulatively meet the following conditions:
- a) operations which, within the meaning of Article 270-272, constitute or are assimilated to a supply of goods or a supply of services, within the scope of the tax, carried out with payment;
Therefore, the operation is not reported, neither by the recapitulative statement code 390, nor by the VAT return code 300 because the taxable base is zero.
According to point 75 paragraph (1) letter d) of the Accounting Regulations, the Romanian company must only register the goods in the accounting records based on the reception made at fair value which replaces the acquisition cost.
“75.
- At the date of entry into the entity, the assets are valued and recorded in the
accounting at the entry value, which is established as follows:
- a) at acquisition cost – for goods purchased for a fee;
- b) at production cost – for the goods produced in the entity;
- c) at the contribution value, established following the evaluation – for the goods representing
the contribution to the share capital;
- d) at fair value – for goods obtained free of charge or found in addition to the inventory. “
Taking into account the fact that the company purchases similar goods, these goods will be registered at the same price as the goods purchased with payment from the respective supplier, based on NIR:
371 „Goods” = 7588 „Other operating revenues”
From the fiscal point of view, the goods offered to the final customers within the sampling action do not constitute delivery of goods and VAT is not collected, as provided in Article 270 paragraph 8 letter b) of the Fiscal Code and the provisions of point 7 paragraph 10 letter a ) of the Methodological Norms given in application of article 270 paragraph 8 letter b of the Fiscal Code, provisions which provide that they include in the category of goods granted free of charge in order to stimulate sales goods that are produced by the taxable person for sale or are regularly by the taxable person, granted free of charge to the customer, only insofar as they are goods of the same kind as those that are, have been or will be delivered to the customer.
From the point of view of expenses, they are deductible expenses according to the provisions of Article 25 paragraph (1) of the Fiscal Code and point 13 paragraph (1) letter a) of the Methodological Norms given in application of Article 25 paragraph (1) of the Fiscal Code.
The products are delivered with an accompanying notice stating that they are not invoiced and registered
623 “Advertising and advertising expenses” = 371 “Goods”
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 Government Decision no. 1/2016).