The Romanian tax office is planning to change its controversial obligatory VAT cash accounting rule to a purely voluntary scheme.
The present obligatory scheme was initiated at the early of 2013. This system, progressively common in other EU countries given some cash flow relief to small entrepreneurs, and expedite their reporting requirements. Furthermore, current scheme facilitates the small trader whose turnover below Euro 500k per annum to pay VAT only when they had collected the output on their sales. This system has a number of drawbacks:
- The VAT payment on sales within 90 days creates cash problem to the traders or entrepreneurs.
- Traders who buy their purchase through credit but regarded as regular Romanian Credit (surplus) position since they paid on time.
- Customers of the businesses within the scheme must follow and consent to the cash-basis. This made difficulties for large enterprises not within the scheme.
