The new statement 394

The new 394 declaration, approved by ANAF Measure 3769/2015, will become the main tool used by Romanian authorities to determine the tax risk of individual taxpayers and select in advance which ones to audit. The new 394 declaration is very detailed and consists of nine pages compared to the current one.

The complexity of the data required, may generate several risks arising from:

– Volume of information required;

– The failure to cross-reference in error the data reported by a supplier against the mirror data reported by the respective customer;

– transactions with non-VAT entities (e.g., purchases from PFAs) that could only be verified through analysis of the filed 394 return as they cannot be cross-referenced ;

– supplier master records, which should exactly match the existing tax position (watch out for inactive taxpayers, cash VAT system etc.).

Subjects required to file the new 394:

Basically, they are the economic operators registered for VAT purposes in the territory of the Romanian state.

What additional data is stated?

The new 394 return will have to report all purchases and sales made not only to VAT subjects but also to non-VAT subjects (economic operators not registered for VAT) not only residing in Romania but also abroad (identified by tax code).

For transactions made with parties not registered for VAT, the nature of the transaction (buying and selling grain, land, construction, services etc.) should be stated in addition to the invoice number.

Effective date

Measure 3769/2015 coming into effect with an April 1, 2016 effective date implies that the first 394 declaration with the new form will refer to the month of March 2016 with a due date of April 25, 2016.

Given the gravitas of the new model we will return with an in-depth discussion on the topic.