Fiscal Aspects Regarding Vat on Collection in the Context of 2023

Abstract

AT or value added tax is an indirect fiscal obligation, or indirect tax. Indirect taxes are those borne by all of us as final consumers, which we do not pay directly to the state budget, but through those who sell the products or provide the services we purchase. In the case of VAT, this is a tax added to prices, we pay it when we buy products or services, and the respective economic units collect it and later transfer it to the state budget. Implemented, in Romania, for the first time, in 2013, the VAT on collection system was aimed at unblocking the treasury flow for: small commercial companies that, based on the declarations submitted to ANAF, had to pay the collected VAT to the state even though these amounts were not collected from customers; state, which had to pay the refunded VAT even though it had not collected the respective amounts. VAT on receipt is a system that consists in deferring both payment and deduction of VAT until the date of collection from customers and payment of suppliers. According to the Fiscal Code, taxable legal entities, with the seat of economic activity in Romania, in one of the following situations are considered eligible for the application of VAT on receipts: they are registered for VAT purposes, the previous year they did not apply the VAT system on receipts, the turnover from the previous calendar year is less than 2,250,000 lei and opts for the application of the VAT system on receipt and is registered for VAT purposes according to art. 316 of the Fiscal Code during the year and also then opts for the application of the VAT system upon collection. Our study aims to highlight the advantages of this system for Romanian companies.