Settlement of VAT negative claims with option to refund:
According to the Order 352/2022, only the claims with negative amounts of value added tax with the option of refund submitted within the legal deadline for submission are subject to the settlement procedure.
Taxable persons who submit their tax returns after the legal deadline for submission will have the negative amount included in the tax return for the following tax period.
By exception, the VAT return for the tax period prior to the date of opening of insolvency proceedings provided for by the relevant legislation is also subject to the settlement procedure, if the taxable person requests the correction of this return, according to Article 303 para. (7) sentence IV of the Tax Code, for the reimbursement of the negative tax balance.
The applications for refund submitted for the same legal term of submission are subject to the procedure of solution, in the chronological order of their registration at the tax office, within the term provided for in Article 77 of the Tax Procedure Code.
The claims with negative VAT amounts with the option of refund are being settled in the period between the date of submission of the claim and the date of actual compensation/refund of the amounts approved for refund or the date of communication of the Tax Decision on the main tax liabilities related to the differences in the tax bases established during the tax inspections of legal entities or individuals, rejecting the amounts claimed for refund, as the case may be.
The specialised department analyses the requests for reimbursement in order to solve them.
VAT statements are checked for completeness and correctness by checking whether the balance of the negative VAT amount claimed for refund matches the amount recorded in the tax records.
If differences are found between the negative VAT amount claimed for refund and the amount recorded in the tax authority’s records that can be corrected according to the procedure for correcting material errors, the specialist department notifies the taxpayer and applies the special procedure.
The correction of the material error is made by the tax authority ex officio, if possible, or on the basis of documentation submitted by the taxable person.
In this case, the legal deadline for the resolution of the refund request is extended by the period of time between the date of issuing the notification and the date of correcting the difference between the negative amount of value added tax requested for refund and the amount recorded in the tax records, according to Article 77 paragraph (2) of the Tax Procedure Code.
After the correction of the material error, the negative VAT return with the option to refund is subject to settlement.
The tax authorities shall settle the VAT returns with negative amounts of value added tax with the option of refund, submitted within the legal deadline for submission, with a subsequent tax inspection, except for VAT returns submitted by taxable persons who meet one of the conditions provided for in Article 169 paragraph (2) or (3), as the case may be, of the Tax Procedure Code, which shall be settled after the anticipated tax inspection.
The tax returns with negative amounts of value added tax with the option of refund are subject to analysis, in order to verify the fulfilment of the conditions that trigger the advance tax inspection.
This stage is completed within 5 working days from the date of submission of the VAT return or from the date of the decision to rectify material errors in the VAT return, as the case may be, if the taxable person is not included in the special database of taxable persons at risk of an undue refund. In the case of statements submitted by taxable persons included in the special database, this stage is completed within 15 working days from the date of submission of the VAT statement.
The statements with negative VAT amounts with the option of refund for which it is not necessary, according to the law, to carry out the advance tax inspection shall be resolved by issuing the VAT refund decision, the model of which is provided in Annex no. 2 to the Order. The specialised department shall issue the refund decision within one day after the verification of the conditions provided for in Article 169 paragraph (2) or (3), as the case may be, of the Tax Procedure Code.
The statements with negative amounts of value added tax with the option of refund for which it is necessary, according to the law, to carry out the advance tax inspection, are sent to the department with tax inspection duties.
On the date of transmission to the tax inspection department, but not later than 3 days after the verification of the conditions provided for in Article 169 paragraph (2) or (3), as the case may be, of the Tax Procedure Code, the tax inspection department shall notify the taxable person of the extension of the deadline for settlement of the tax return, in accordance with Article 77 paragraph (5) of the Tax Procedure Code. The model of the notification is provided in Annex no. 3 to the Order.
Following the advance tax inspection, the department with attributions in this field shall draw up the tax inspection report.
If the deductible or collected VAT changes compared to the amounts entered in the VAT statement, the Tax Decision on the main tax obligations related to the differences of the tax bases established during the tax inspections of legal entities or individuals, as the case may be, is drawn up, which also acts as a VAT refund decision.
If no differences from the amount claimed for refund are established during the advance tax inspection, the Decision on the non-modification of the tax base as a result of the tax inspection is drawn up and the VAT refund Decision is issued by the specialised department.
The refund decision issued by the tax department is a decision subject to subsequent verification in accordance with Article 94 of the Tax Procedure Code, with the exception of the amounts for which the refund decision was issued on the basis of the Decision on the non-modification of the tax base following the tax inspection.
For taxable persons who within 6 months have waived at least twice the refund option exercised by means of statements that would have been settled after the advance tax inspection, according to article 169 paragraph (2) or (3) of the Tax Procedure Code, as the case may be, if the waiver of the refund option occurred before the submission of the statements with negative VAT amounts with refund option to the tax inspection activity, the specialised department will inform the Tax Inspection Selection, Programming and Analysis Service/Bureau/Department with a view to the possible selection for tax inspection of these persons, depending on the level of risk identified.
In the case of a taxpayer who waives the refund option, after the submission of negative VAT statements with refund option to the tax inspection activity, but before the start of the advance tax inspection, the tax inspection department will return the VAT statement to the administration authority
In the case of a taxpayer who waives the refund option, after the start of the advance tax inspection, it will be continued and completed as a partial VAT inspection.
Please note that in the Procedure approved by Order 352/2022, the following flows are detailed:
- The flow of analysis of statements with negative VAT amounts with the option of refund submitted by large and medium taxpayers
- Flow for the analysis of statements with negative VAT amounts with refund option submitted by taxpayers other than large and medium taxpayers
- Workflow in the case of negative VAT returns with refund option resolved with advance tax inspection
Settlement of VAT refund claims:
Negative VAT amounts contained in statements with negative VAT amounts submitted by taxable persons who request cancellation of their VAT registration code or for whom the tax authorities automatically cancel the VAT registration code shall be refunded in accordance with the general refund procedure approved by the Order of the Minister of Public Finance no. 1.899/2004 for the approval of the procedure for the refund and reimbursement of amounts from the budget, as well as for the granting of interest due to taxpayers for amounts refunded or reimbursed after the legal deadline, only after the tax inspection has been carried out.
Special provisions on the settlement of VAT returns with negative VAT amounts with an option to refund submitted by taxable persons for whom the competent tax authority has cancelled, ex officio, the registration for VAT purposes, according to Article 316 paragraph (11) of the Tax Code or who have been removed from the records of the tax authorities during the settlement procedure:
If, during the settlement of the tax return with negative VAT amounts with the option of refund, the competent tax authority cancels, ex officio, the registration of the taxable person for VAT purposes, according to Article 316 paragraph (11) of the Tax Code, the procedure is terminated and the negative amounts contained in the tax return can be included in the first VAT return to be submitted after the registration of the taxpayer, at his request, according to Article 316 paragraph (12) of the Tax Code.
The department in charge of settling the claim at the time of the cancellation of the VAT registration draws up a report proposing the closure of the procedure. The report is approved by the head of the tax unit and forwarded to the relevant department.
The specialized department issues a decision, according to the model provided in Annex no. 4 to the Order, informing the taxable person of the termination of the settlement procedure for the tax return in the process of settlement at the date of the cancellation of the VAT registration. The decision shall be communicated by the competent tax authority, in accordance with the provisions of Article 47 of the Tax Procedure Code.
After communicating the decision, the tax authority shall transfer the negative amounts, related to the VAT negative tax return with the option of refund, whose settlement procedure has been closed, from the separate account to the payer’s account.
Legal basis:
– Government Ordinance (GO) no. 11/2021 for the amendment and completion of Law no. 207/2015 on the Fiscal Procedure Code and the regulation of some fiscal measures;
– ANAF Order no. 352/2022 for the approval of the Procedure for settling the returns with negative amounts of value added tax with reimbursement option.