Theoretical and Practical Considerations regarding the Accounting and Fiscal Treatment of the VAT at Chasing System in Romania in the Context of 2024
Abstract
The VAT at cashing system was introduced in Romania as an option for VAT paying taxpayers in 2013, according to Law no. 149/2013 for the amendment and completion of the Law on the Fiscal Code. This system is an alternative to the traditional pay-as-you-go VAT system and allows businesses to pay VAT to the state only after receiving money from customers.
By implementing the VAT at cashing system, a better management of companies' liquidity is aimed at, avoiding situations in which they are obliged to pay VAT to the state before receiving the value of invoices issued to customers.
It is important to note that the VAT at cashing system is optional in Romania, companies can opt for this system only under certain conditions and for certain categories of activities . The choice between the classic system and the accrual system is an important aspect in a company's fiscal strategy, being influenced by the nature of the activity, cash flows and other managerial considerations.
The general conditions for the application of the VAT at cashing system are: the taxable person must be registered for VAT purposes, the seat of the economic activity must be in Romania and the turnover from the previous year must not exceed 4.5 million lei.
This article also looks at comparisons with some states in the European Union regarding the application of the VAT at cashing system. Here are some of the EU countries that apply the VAT at cashing system:Austria: companies with an annual turnover of less than 1 million euros can opt for the VAT at casing system. Belgium: Companies with an annual turnover below 250,000 euros can opt for the VAT system on receipt. France: Companies with an annual turnover of less than 236,000 euros can opt for the VAT at casing system. Germany: Companies with an annual turnover below 600,000 euros can opt for the VAT at casing system. Italy: Companies with an annual turnover below 700,000 euros can opt for the VAT at casing system. Spain: Companies with an annual turnover below 600,000 euros can opt for the VAT at casing system.
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