Reverse charge is an exceptional procedure simplifying the collection and deduction of value added tax (VAT), aspects raising various issues in day-to-day accounting practice, having significant implications at the cash-flow level of companies.
“Applying reverse charge for certain types of activities represents a necessity having 2-way benefits. On the one hand, it significantly contributes to preventing and fighting against tax evasion, and on the other hand, it gives a real chance for survival to business entities which may face severe liquidity-related issues”, said Ionuţ Bohâlţeanu, Partner with Muşat & Asociaţii – Fiscal Consultancy division, within the event “Tax, Law & Lobby”, organized together with the publication Business Review.
“Reverse charge applies to external operations (supply of services, delivery of goods and intra-community acquisitions) in relation to which the Fiscal Code provides that the obligation to pay VAT is incumbent upon the beneficiary, in order to avoid the foreign supplier of goods/provider of services having the obligation to register for VAT purposes in Romania for occasional operations. In addition, also benefitting from this exception are companies performing internal operations in the area of delivering, processing and manufacturing finite products from iron and non-iron waste, delivering residue and other recyclable materials, but also delivering wood mass and wood materials. Moreover, starting with June 1st, 2011, for a period of approximately two years, this category shall also include, benefitting from reverse charge, the operations regarding the delivery of cereal and technical plants (raw wheat, rye, barley, cane sugar). In these cases, the purchaser does not transfer VAT to the seller, and payment may be deferred until the actual sale of the goods in question to the end user”, added attorney Ionuţ Bohâlţeanu.
Ionuţ Bohâlţeanu, attorney at law and tax advisor, is one of the coordinators of the tax department of Muşat & Asociaţii, being a member of the firm since 2004. Throughout his career he has provided legal and tax advice to important national and international companies on taxation projects spanning transaction structuring in view of fiscal optimization, tax effects of state aid, corporate tax , VAT and customs duties for high-ranked clients such as Monsanto, SAB Miller, Enel SpA, Delhaize, etc.
The expertise of Musat & Asociatii in the tax area is constantly recommended by the renowned international legal guides Chambers & Partners and PLC Which Lawyer? which classify the company and recommend its attorneys as top specialists in Romania.