This is to remind you of a particularly sensitive aspect of deductibility of costs for services. The Romanian Fiscal Code, Law 227 of 2015, provides for the obligation both on the subject of deductibility of value added tax, in Article 281, paragraph 7 precisely, and on the subject of deductibility of the cost, to acquire the documentation certifying the actuality of the service or the relationship of service rendered.
So in addition to the contract signed by the two parties, client and supplier, and the invoice for the service, the taxpayer must compulsorily request and keep the report of the services performed (with descriptive indication of what was done, time spent, date of service, agreed rate etc.).
On the subject of supporting documents and deductibility of costs, the same Court of Cassation and Justice ruled, in accordance with the provisions of Article 145, Paragraph 3, lett. (a) and Paragraph 8 of the Tax Code, that in order to admit the tax deductibility of the costs of services, management and consulting, it is necessary to document the actual realization of the service provided; the Court tempered the burden on the taxpayer by admitting any document from which evidence of the service’s actuality can be seen: feasibility study, process of receiving the service, correspondence related to the execution of the service etc.
In conclusion, it is not sufficient to acquire only the contract and invoice for the accounting record of the service rendered; in fact, the law requires the taxpayer to document with reports, reports signed by the supplier the actuality of the service performed under penalty of the deductibility of the cost itself.
