VAT and indirect taxes need careful planning as they make up an ever-larger part of the tax take. Governments worldwide have shifted taxation to VAT and other indirect taxes over recent years to stabilise their tax base.
Not at least, due to the increasing attention paid by the tax authorities at national and international level, VAT and indirect taxes have gained in importance for internationally operating companies in particular. Increasing complexity, caused mainly by a constant change in jurisdiction and legislation, as well as a partial lack of harmonisation across EU member states, not only make it more difficult to assess correctly any special issues for the purposes of indirect taxes, but also to fulfill the worldwide VAT and indirect tax obligations in the day-to-day business. Moreover, it has already become obvious that the COVID-19 crisis will have an impact on the sourcing of businesses – with a number of VAT and indirect tax issues.
With companies facing high penalties (including personal fines for the management of companies) for non-compliance, VAT and indirect taxes have risen up on the corporate agenda.
We offer the support you need to meet your VAT and indirect tax obligations.
Typical areas of risk for businesses:
- VAT groups, especially monitoring the respective requirements (e.g. internal guidelines, changes of managing directors).
- Implications of EU Action Plan (e.g. ‘Quick fixes’ 2020, E-commerce package 2021, final VAT system 2022).
- Warehouse concepts and its VAT/customs issues.
- Chain transactions (e.g., allocation of ‘moveable supply’, application of triangulation rule).
- Importation of goods (e.g., tariff codes, deduction of import VAT).
VAT is increasingly complex and can impact directly on your bottom line, incurring hefty penalties if you get it wrong. An error in the planning phase may trigger adverse effects on the entire supply chain.
VAT is by far the most sensitive indirect tax. Even if the VAT regulations in the European Union countries are harmonized, there still are country specific requirements that any business must meet. Owing to flexible interpretations of the national or EU regulations, the liabilities arising out of the performance of your business need to be carefully assessed.
VAT and indirect taxes are transaction driven, complex, and can have a major impact on your bottom line. At Mazars Romania, we can help with VAT and indirect taxation across the whole business lifecycle, from when your company is formed through to detailed structuring of transactions and assistance in terms of litigation.
The initiation of a tax audit is determined by the risk analysis performed by fiscal authorities. Among others, the risk analysis is also performed based on the information declared in the statements:
- 390 – regarding intra-community operations (VIES), amounts mentioned in the VAT returns on the amendments rows, transactions performed with inactive taxpayers or with taxpayers with cancelled VAT number;
- 394 – regarding local transactions performed by persons registered for VAT purposes
To prevent the undesired effects of the information reported in the tax return forms in relation to the company’s customers and suppliers, we propose an analysis of such inconsistencies derived from the 390 and 394 declarations as well as a transaction analysis with inactive companies or companies with cancelled VAT number.
Another major benefit for the company resulting from solving the respective differences is the shortening of the tax audit duration as the clarification of the differences in the declarations would no longer be necessary.
- VAT review;
- VAT registration in Romania (e.g., direct VAT registration of non-resident companies, registration of Romanian companies);
- VAT compliance services (e.g., preparation of sale/purchase ledgers, preparation of VAT returns and/or statements, review of the compliance procedures, etc.);
- Assistance during VAT audits, including representing / assisting the representatives of the company in discussions with the tax authorities;
- Staff trainings on specific VAT issues;
- Refund of VAT to both resident and non-resident taxable persons, refund of the VAT paid abroad by Romanian entities;
- Assistance in obtaining opinions of the Ministry of Finance as well as binding rulings;
- Advice on the completion of excise duties formalities;
- Advice on the completion of customs formalities.
Our tools & solutions
Mazars developed VAT Hunter, which enables the automatic and real-time verification of the VAT IDs of companies. The application, which works with any internet browser, is mobile-friendly and can be used for:
- Simple or multiple verifications of VAT IDs;
- Providing information regarding the activity / periods of inactivity of a company;
- Verifying an unlimited number of VAT IDs;
- Performing, upon request, checks based on the purchase ledgers obtained from various applications (e.g., Ciel, Winmentor, SAP etc.)
As their importance rises, VAT and indirect taxes are becoming increasingly complex.
Mazars Romania is well prepared to assist you: quickly, competently and practically oriented. Our VAT and indirect tax team takes a proactive, integrated, and solutions-based approach with decision guidance.
We have in-depth expertise for industries facing complex, cross-border VAT, and indirect tax issues such as real estate, energy, healthcare, and automotive.
Our VAT and indirect tax experts are regular contributors to specialist publications and active as lecturers – locally and abroad, internally and externally. In addition, we prepare our own specialised publications.