Romanian Govt. ponders flat rate scheme on VAT for small firms

Newsroom 28/09/2012 | 14:17

The Romanian Government is considering a flat rate scheme on VAT in a move to help small business by taking some of the work out of recording VAT sales and purchases, stated today Nadia Oanea, coordinator of the fiscal consultancy department at Baker Tilly, during the Tax&Law event organized by Business Review.

The initiative follows the UK model, where eligible companies have a turnover below GBP 168,000 or EUR 150,000.

“The government is currently looking at the UK model in which a lower flat tax on VAT is applied against the standard one and this would apply to the turnover or total collection, depending on the tax basis for the selected VAT,” said Oanea. “We wouldn’t be interested in this case in deductions, so there would be no difference between deductible and collected VAT.”

Oanea explained that the flat tax rate depends on the sector of activity. She added the main benefit for companies in they save time.

Acquisitions of capital goods and that of intra -community goods, along with the acquisition of services that have reversed taxing would be excluded from this scheme.