Tax inspection findings of a company whose activity is “Manufacture of household and sanitary products of paper and paperboard”

“S.C. X S.R.L.’s business activity is “Manufacture of household and sanitary goods, of paper and paperboard”, CAEN code 1722.

Period checked:

– 01.01.2017-30.06.2023 Profit tax.

– 01.07.2018-30.06.2023 Value added tax

The main findings of the tax inspection authorities  were:

On the basis of the checks carried out by the tax inspection authorities , the following deficiencies were established:

– S.C. X S.R.L. did not justify the reversal of work in progress. In September 2022, the taxpayer cancelled the value of work in progress by reversing it, an accounting operation which had the effect of reducing work in progress and increasing the value of the stock of raw materials.

In order to determine the fiscal situation regarding the costs of raw and auxiliary materials related to the production flow, including its completion, and the periodic production reports made, with the receipt of finished products (recorded in the turnover of accounts 345 “Finished products” and 346 “Residual products” respectively), at the same time as the discharge of the raw and auxiliary materials used, the tax inspection authorities  checked the account sheets 301 “Raw materials”,

345 “Finished products”, 371 “Goods” and 381 “Packaging”, in correlation with the receipt/receipt notes, consumption receipts, warehouse sheets, daily work reports and production reports for the year 2022.

Stocks of raw materials in the amount of x lei, remained at the same value for a long period of time, not being distributed in the production process, as the company regularly purchased raw materials (specific to the object of activity), and in the management of finished products and goods, a constant amount of x lei did not materialize in the realization of income.

Thus, the taxpayer proceeded to record in the accounting records in the debit of account 117.1 “Retained earnings”, the differences in stocks in the total amount of x lei, generated by their physical absence (according to the inventory lists), with the mention of the tax inspection authorities that were detected in the working premises ways of deficient reception of finished products and raw materials given for consumption for production, which resulted in the closure of a production line.

The value of the goods found to be missing in the management, in the total amount of x lei, was established by the tax inspection authorities  as a non-deductible expense in the calculation of the corporate income tax and, therefore, additional corporate income tax was calculated in the amount of X lei, and additional value added tax in the amount of x lei.


Source: ANAF