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Romania 2018 split payment criticism  

  • EU VAT
  • 29 August 2017 | Richard Asquith

Romania 2018 split payment criticism  

Plans in Romania to introduce anti-VAT fraud split payments from 1 January 2017 have drawn criticism.

The Romanian Foreign Investor Council has suggested that other reforms, including Standard Audit File for Tax (SAF-T) and government controlled e-invoices are more effective at preventing VAT fraud.  Split payments will require tax payers to create separate VAT bank accounts for receipt of the VAT element of their sales invoices. These accounts can be supervised by the tax authorities, including transfers to companies’ regular bank accounts. This will limit cash-flow options for companies.

Whilst the Council has called for a reference to the European Union, this is unlikely to be successful in blocking the measure as a similar system is already in place, and approved in Italy.

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.