Tax inspections of individual taxpayers (1)

Association of X and Y has as its object of activity “Real estate transactions/trading of compensating points” CAEN code 6810. The period audited was:

  • 01.2018 – 31.08.2022 for VAT;
  • 01.2018 – 31.12.2019 for self-employment tax;
  • 01.2021 – 31.12.2021 for tax on income from other sources;
  • 01.2018 – 31.12.2021 for social contributions.

The main observations of the tax inspection authority were: in 2018-2021, individuals X and Y carried out real estate transactions consisting in the sale of building plots and obtained income from the sale of compensatory points. Individuals X and Y were analyzed by the tax inspection authorities as representing a form of association for commercial purposes without legal personality, in accordance with the provisions of Art. 269, para. 1, of Law no. 227/2015 on the Tax Code, as subsequently amended and supplemented, because they carried out economic For the income obtained from real estate transactions, the association exceeded the VAT exemption threshold of EUR 88,500, i.e. RON 300,000, provided for in Article 310, paragraph. (1) of Law no. 227/2015 on the Tax Code, as subsequently amended and supplemented, for which the tax inspection authorities calculated the additional VAT collected for the income obtained after the date of exceeding the limit .

Also, for the real estate transactions carried out, the association was obliged to authorize itself according to the provisions of OUG no. 44/2008 on the conduct of economic activities by authorized individuals, sole proprietorships and family businesses and to declare the income received after 01.06.2017, pursuant to art. 120, para. 1 of Law no. 227/2015 on the Tax Code, as subsequently amended and supplemented.

At the same time, from the analysis of the account statements, the tax inspection authorities   found that the holder X, part of the Association X and Y, in the period 01.01.2021 – 31.12.2021, received income from other sources in the amount of x lei, incurred expenses in the amount of x lei (purchase of compensatory points), without declaring and paying tax, thus resulting in additional taxable income from other sources in the amount of x lei and social contributions in the total amount of x lei.

Consequently, the tax inspection authorities   established additional tax liabilities totaling x lei, of which:

  • VAT x lei;
  • Tax on income from self-employment x lei;
  • Tax on income from other sources x lei;
  • Social contributions x lei.

Source: ANAF