A new procedure for canceling VAT code and a new form of the form 088 are proposed by ANAF in two draft orders.
It is important to notice that the companies already registered in the VAT system (with valid VAT code) might be required to submit the form 088 in case ANAF considers that they present fiscal risk. So far, the obligation was just for those who changed their headquarters (sediu social), associates and / or administrators.
The long awaited order – meant to simplify the VAT registration procedure – will further complicate the life of the companies that will be identified with fiscal risk by ANAF. If the risk analysis will conclude that the company presents a high fiscal risk, the form 088 will be mandatory.
As we are already accustomed the criteria used by ANAF to determine the fiscal risk will not be made public.
According to the note underlying the draft order, the risk analysis would apply, automatically, a set of indicators / risk criteria, such as:
Warning!!! These enumerations are only illustrative, there might be, also, other criteria. Therefore, you should not lose out of sight that in case ANAF identifies you with high fiscal risk, you must be prepared to submit the declaration 088.
The risk is quite high considering that, after filing the form 088, your VAT code may be canceled. This means that you have to adjust VAT on capital goods(ie buildings, land, fixed assets), you will collect VAT for all sales made in the period when you do not have a valid VAT number and you cannot deduct VAT related to acquisitions made during the same period.
What has been changed to 088?
Instead of 20 questions, the form contains 17, two of the questions have been eliminated and another two were merged.
Questions removed are those relating to:
The question about the place of the economic activity (if it only takes place outside the head office / professional and secondary offices or at the registered office and / or secondary offices etc) was merged with the previous question.
Another amendment aims the gross income of associates and administrators individuals. They do not have to be reported accurately, but in certain intervals, eg no income; up to 1,500 lei; between 1501-4500 lei; between 4501-9000 lei (…). Also, the attached documents must certify the nature and amount of gross income least for the minimum threshold of the selected range.
The change is especially favorable for directors / shareholders who are not obligated to declare their income in Romania and want to maintain the confidentiality.
The diplomas of foreign shareholders / directors and the documents regarding their income must have only the certified translation, legalization and apostille are necessary only if ANAF request it later.
Thresholds were introduced as regards the owning over the past five years of companies with budgetary debts: up to 9,999 lei and 99,999 lei 10,000- or 100,000 lei. However, the question remains difficult, especially for the minor shareholders who are not aware, in most cases, of the budgetary debts of the companies.
Otherwise, the form contains a series of reformulations and renumbering without major impact.
Therefore, for start-ups which require registration for VAT purposes and the companies that exceed the threshold of 220,000 lei and are obliged by law to apply for registration the situation will not change significantly.
We anticipate that start-ups will continue to face difficulties when they submit form 088 to enter the VAT system and that the number of companies that will be obliged to reconfirm their intention to undertake economic activities (submitting form 088) because they are identified with fiscal risk will increase.
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