Split payment for VAT

A recent draft law that appeared for the Ministry of Finance website envisages, if approved, the obligation for economic operators to establish a specific bank account for the collection of value-added tax, which will in fact be split (spit in English, precisely) from the collection made by customers. The separate tax and taxable collection mechanism will be applied to all transactions involving the purchase and sale of goods and the provision of services subject to the tax in the territory of Romania.

The Split payment mechanism will provide (these are still rumors):

– That payments made by customers (public bodies and any VAT-registered entity) for each transaction subject to VAT be made separately in order to allocate the tax from the taxable amount in the specifically activated bank accounts;

– That any person registered for VAT in Romania must mandatorily “remit” within 3 working days the tax collected from the customer;

– The prohibition of using the amounts paid as value added tax in the dedicated bank account.

The draft Law if approved could take effect from Oct. 1, 2017.

Further clarification will follow