Tax inspection findings at a company whose activity is “Wholesale of waste and scrap”

S.C. X S.R.L., has as object of activity “Wholesale of waste and scrap”, CAEN code 4677.

Period checked:

– 20.01.2021 – 31.05.2023 tax on income from other sources;

– 01.07.2021 – 31.05.2023 value added tax.

The main findings of the tax inspection authorities  were:

a) With regard to tax on income from other sources:

From the analysis of ANAF databases and documents provided by the legal representative of the audited company, the tax inspection authorities  found that the company purchased recyclable materials (waste catalysts) from various individuals who were not taxed for income from other sources in accordance with the legal provisions.

A large number of individuals were found to have brought in large quantities of waste, obtaining income from its recovery, i.e. a total amount of x lei, which was paid by the inspected company, and this income was considered by it as non-taxable.

In this situation, the payer of income, i.e. the company under audit, was obliged to withhold, declare and remit to the consolidated state budget the related income tax, according to Art. 115, para. 1 and (1″1) of Law no.227/2015 on the Tax Code, as amended.

Also, the tax inspection authorities  found that as of 31.05.2023 the audited company recorded a debit balance of the account 5311 – House in lei, in the amount of x lei, the amount of x lei being withdrawn and used for personal purposes by the company’s administrator, without accounting documents being submitted in this regard, for which the company owes tax on income from other sources in the amount of x lei.

b) Concerning value added tax:

The audited company fully exercised its right to deduct VAT on a purchased motor vehicle used for both business and personal use, without taking into account the provisions of Article 298 of Law No. 227/2015 on the Tax Code as amended and supplemented, regarding the limitation of the right to deduct VAT to 50%.


Source: ANAF