VAT number in Romania: changes to D088

A draft law recently appeared on the Romanian Finance website to simplify the procedure required in order to obtain the activation of a VAT number in Romania.

The bill specifically plans to amend:

– the income documentation of partners/directors: it will no longer be necessary to attach tax returns, but it will be sufficient to indicate the income earned and the reporting period;

– documentation of past due tax obligations of members/directors as minimum thresholds for tax liabilities and time intervals will be included;

– the obligation to apostille foreign documents: the amendment should give the Authority the power to ask for an apostille only if necessary ( and no longer the automatism of getting documents already apostilled).

In addition, Form D088 should be required in the case of companies that are already VAT-active not just because of a change of partners/directors or registered office, but only if there is a serious risk of evasion.

Unfortunately, the draft does not provide for more transparency in the mechanism of assigning the degree of risk and thus in the case of rejection of the request, and still it would be appropriate in the case of “gray” situations to establish an adversarial process between the Agency and the taxpayer to verify whether the business proposed when activating the VAT number is consistent with the company structure and financial means.

We also highlight that absurdly, a company that has exceeded the plafond provided for entry into the VAT system (65,000 euros annually) must also file the declaration and prove that it has the (formal) requirements to obtain the activation of the VAT number. If the application is rejected, the company is obliged to bear the costs of non-deductibility of tax despite having exceeded the legal plafond for entry into the VAT system.

We remain available for further information.