VAT registration: new criteria

With the Decree Law No. 605 of January 31, 2017 came into force effective 1.2.2017the new related criteria followed by the ANAF, National Agency of Tax Administration, to assess the intention and ability to carry out the economic activity by the taxpayer applying for VAT registration. In fact, with the repeal of the previous Form 088, a gap has been created in the practice followed so far by Romanian Revenue Agency officials. The lack of guidelines in the assessment of the ability to do business in Romania has finally been overcome by the recent regulatory act that introduces some general criteria to be considered when submitting the application.

In particular, the criteria introduced take into consideration, among others: the space allocated to the exercise of economic activity, which must be adequate for the declared activity, and the figures of directors and partners. The first analysis of the documentation submitted to the Authority may result in the immediate rejection of the application, approval of the registration (differentiated according to the risk attributed to the taxpayer) or the subsequent request for a cross-examination pursuant to Article 9 of the Code of Fiscal Procedure during which the taxpayer’s representative may supplement the documentation submitted and highlight relevant information to demonstrate the real capacity to carry out the economic activity in Romania.

The repeal of the infamous Form 088 has effectively initiated a more complex procedure involving successive steps of supplementing relevant documentation to prove the company’s economic capacity and, above all, the almost“physiological” cross-examination in front of officials to complete the analysis of the genuineness of the business.

We remain available for any further clarification.