S.C. X S.A., has as its object of activity “Telecommunications activities via cable networks (excluding satellite)”, CAEN code 6120.
Period audited: 01.01.2017 – 31.12.2021.
The main findings of the tax inspection authorities were:
From the verification of the contracts terminated due to the fault or on the initiative of the service beneficiaries, before the expiration of the minimum contractual term, the tax inspection authorities found that the company was obliged to record in its books the taxable income representing “fees for early termination of telecommunications service contracts”.
During the audited period, for contracts terminated due to the fault of the beneficiaries of telecommunications services before the expiry of the minimum contractual term, i.e. non-payment of these services, the company established “compensation for failure to comply with the contractual conditions” to be paid to its customers, totaling x lei.
Thus, the tax inspection authorities reduced the taxable income recorded by the company, representing compensation for the premature termination of service contracts invoiced to customers in the total amount of x lei, by the amount of x lei, representing VAT collected.
The tax inspection authorities also found that the amount of x lei represented non-deductible expenses for the calculation of taxable profit and increased the taxable base, due to the lack of supporting documents showing the provision of “outsourced IT and technology infrastructure services, HR services”.
Regarding VAT:
- The tax inspection authorities found that the amounts representing “fees for early termination of service contracts” are supplies of services for payment, according to Art. 271, para. (3), letter c) of Law no. 227/2015 on the Tax Code, as subsequently amended and supplemented, and have thus set the additional VAT in the amount of x lei;
- the right to deduct VAT in the amount of x lei was not granted, as the documents submitted did not justify the necessity of the purchase of services for the taxable operations of the audited company.
In conclusion, as a result of the tax inspection, additional tax liabilities in the total amount of x lei were established, of which:
- x lei corporate income tax;
- x lei VAT.
Source: ANAF