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    ACCA F6 VAT 3 Romanian Taxation 2014

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    2 views25 pages

    ACCA F6 VAT 3 Romanian Taxation 2014

    Uploaded by

    georgetacaprarescu
    ACCA F6 VAT 3 Romanian Taxation 2014

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 25
    ii) ii) ‘some financial and banking services (art. 144 (2) a) 6) 2) administration of special investments fund other services/deliveries (art. 141 (2) c-g) 4) betting, lottery, gambling and other similar activities b) selling of postal stamps at their nominal value )seling of buildings/oarts of buildings and related land and not-bulldable land (Not to forget: the sale ‘of new buildings andlor buildable land is taxable transaction) 4) services of lending, renting, concession and leasing of real estates except: (1) for hotel accommodations, hosteling and camping (2) for parking ©) sale of assets used in an excepted operation for which, at acquisition, the tax was not deducted {integrally Observation: Despite the fact that the standard treatment is EXEMPT, any taxable person may opt to collect VAT for the leasingirental of real estates as well as forthe sale of real estates exempt 13.2 Tax exempt with deduction right ‘The following services are tax exempt BUT the deduction right arise only if their beneficiary is outside EU or if they are ancillary to exports. ) i) The following nancial and banking services (at. 141 (2) 2) 1-5) 2) the granting and negotiation of credit and the management of credit by the person granting it, b) the negotiation and management of credit guarantees or collateral guarantees for credit, ©) transactions inclusive negotiation, related to deposits accounts, current accounts, payment orders, receivables and other similar titles, except forthe factoring services 4) transactions, inclusive negotiation related to foreign currencies, money, except for collection items, gold or siver ) transactions, including the negotiation, except the management or safely keeping of shares, social parts in trading companies or associations, guaranteed bonds and other financial instruments, except the documents which provide right of onnership over the goods; Insurance andlor reinsurance operations, as well asthe supply of services in connection with insurance and/or reinsurance operations that are performed by taxable persons who intermediate such operations (art. 141 (2)). Note: Unless otherwise speifie, all references inthis course noles material are from the Fiscal Code as at 30 September 2012. 27 14, Exemptions for import and intra-Community acquisit (examples from art. 142) ‘The following transactions are also considered exempt: 2) Import and intra-Community acquisition of goods whose delivery in Romania is always exempt value-added tax; b)_ Intre-Community acquisition of goods whose import in Romania is always exempt from value tax, ©) the import of goods, excepted from custom duties, performed by diplomatic missions, 4) the import of goods by representative offices of intemational organisations accredited in Romani the armed forces of foreign slates that are members of NATO, eto; )_re-importation goods in Romania by the person who exported these goods outside the Communi ‘such goods have the same status they had at the moment of the export and the respective imi ‘exempt from custom duties; 4) re-importation goods in Romania, by the person who exported these goods outside the Community ‘order to be repaired, transformed, adjusted, assembled, only if this exemption is limited tothe val the goods at the moment oftheir exportation outside ofthe Community; 3) import of natural gas through the distribution system for natural gas and electricity. 15. Exemptions for exports or other similar operations and for int Community deliveries and for international and intra-Communi transport (Art. 143) The folowing are exempt from tax, with deduction right: 2) The delivery of goods that are d’spatched or transported outside the Community by the supplier or ‘another person on his behalf b) The delivery of goods that are dispatched or transported outside the Community by the foreign client, ‘or by another person on behalf ofthe foreign client, except for fuel and other goods used on private means of transportation ©) Delivery of goods to be carried outside the community inthe personal luggage of travellers (residents ‘outside EU) except for those goods used in the scope of transpot ise, and onl if these goods are transported outside community in at least 3 month after the month of acquisition and their value is above 175 Euro; 4) Supplies of services of transport, services ancillary to transport and other services directly connected with the export of goods (in fac, if these services are to be done by the exported, are considered ancilary to export) €) Supplies of services of transport, services ancillary to transport and other services directly connected with the import of goods, if their value is included in the taxable amount of imported goods (inthis ‘case the value ofthe goods imported is inclding the value of tis services) Note: Unless otherwise specified, all references inthis course notes material are from the Fiscal Code as at 30 September 2012, 248 4} The supply of services within Romania consisting of work on movable goods and acquired or imported in order to be transformed, transported outside the Community by the performer of the Services or by the customer if not established within Romania, or by another person on behalf of either of them 9) The international transport of persons; 4) In case of ships and aircrafts used for supolyingintemational transport of persons andlor products (or for fishing, rescue, etc) ~ _ the delivery, moctication, repair, maintenance, leasing and rental of the shipaireraft and ofthe equipment incorporated or used on it, ~ deliveries of fuel and supplies that are intended for use on it} ~ supply of other services for direct needs of ships/aircrats or of the equipment installed on ') The delivery of goods and the supply of services forthe benefit of diplomatic missions and consular Offices, their personnel, as well as foreign citizens having diplomatic or consular status in Romania or in another Member State, under conditions of reciprocity. |) The delivery of goods and the supply of services for the benefit of EC, CEB, EBI, NATO and other international institutions recognised by the Romanian Authorities ')The intra-Community delivery of goods to @ person providing his supplier with a valid VAT registration number issued by another Member State then Romania, excluci + ICDs made by a small company (other than new means of transportation) ') The intra-Community delivery of a new means of transport or of excise goods to a person who is not Providing his supplier wth a VAT registration number. 16. Exemptions related to the international traffic of goods (Art. 144) ‘The following transactions are tax exempt with deduction fight: @) The delivery of goods that are intended to be placed under temporary admission arrangements with total exemption of customs duties, temporary storage, warehousing arrangements, external transit arrangements, VAT warehouse, into territorial waters, and other similar regimes, ») The delivery of goods carried out inthe places listed in a) above, as well as the goods subject to ‘one ofthe arrangements specified therein ©) The supplies of services related to goods placed under temporary admission arrangements 4) The impor or the delivery of goods that will to be placed under VAT warehouse, Observation fa supplier issued an invoice with VAT while he should not, that supplier has to cancel the invoices issued. ‘The client recelving an invoice with VAT for an exempt operation may not deduct that VAT and may not ask for the reimbursement ofthat VAT. Note: Uniess otherwise specified al references in this course notes material are from the Fiscal Code as at 30 September 2012, 249 Lecture example 7.11 ‘A young married couple bought an apartment of 395,000 Lei (VAT exclusive) with a surface of 100 m? ha allocated a piece of land of 150 mé. Required Whats the VAT rate payable in this case? Solution Note: Uniess otherwise specified, al references in tis course notes material ae ftom the Fiscal Code as at 30 September 2012. 250 Solution 7.10 1) ABC tozvx Transaction Base VAT | In accordance with: Sale 14,000 3,360 | Art. 137, paragraph 4, letra Transport 850 204 | Art. 137, paragraph 2, letter b Discount 3% (446) (107) | Art. 138, letter ¢ TOTAL for the related invoice 14,404 3,457 The goods being replaced theres no adjustment o be done on the ABC invoice tots client 2) ABC to wzT For the invoice for advance the tax base = 1,000%4.2 = 4,200 Lei (and the invoice being paid, it is chargeable When issued) For the inal invoice, the tax base = 1,000°42 + 2.000%,1 = 12.400 Lel (fortis invoice, cash ‘accounting scheme. ‘may be applicable fr the outstanding amount, if ABC quelifes) Solution 7.11 ‘ecording tothe article 140, paragraph 21, ltr c, the sele ofan apartment qualifies for a VAT reduced rate of Bi ~ the surface of the apartment is bellow 120sm — OK ~ the allocated piece of land is below 250sm— OK ~_ {he apartments the frst property forthe couple 2s well as for bth spouses ~ may be considered OK ~ the value ofthe apartment should not be higher than 380,000 Lei - NOT OK The sole ofthe apartment cd not qualfy forthe reduced rte. The VAT rate should be 24% $8 Unless cthervse specie, a references inthis couse note materia ar rom te Fiscal Code asa 30 September 2012, 302 17. The decision of collecting VAT In order to know if VAT shouldbe collected you have to answer positively tothe following & question: Tvs 's the transaction within the VAT ie Where is deemed to be placed the transaction? In Romania + Apply the Romanian legislation (FC) collect VAT? | Collect VAT No |s the transaction done by a taxable person? eae VAT should not be collected. No ‘scope? | VAT should not be collected. Yes Isthere any exemption applicable? |__| J ‘Are you the person who should No {in another Member State Apply the legisation from that Member State VAT should not be collected, SS NS VAT should be collected by someone else Note: Uniess otherwise specie, all references inthis course notes materia are from the Fiscal Code as at 30 September 2012, 251 In order to know how to collect VAT you have to answer the following 3 questions When? ] L ‘What amount? | At what rate? | l J ie ot a: i: ‘See generating See VAT See VAT event end base rates. chargeabilty moment. 18. Regime of deductions (Chapter X) 18.1 General (Art. 145) By general rule, the right of deduction arises at the moment of the chargeabilty of tax. BUT starting with 1* January 2013, the deducibity of tax for an acquistion made from @ person applying the cash accounting scheme will be delayed until payment date The same, stating wi 1* January 2013, the deductbilty right ofa person applying the cash accounting scheme is delayed until payment. ‘Any taxable person is entiled to deduct the input tax on his acquisitions, i the goods or services acquired are intended to be used forthe following operations: @) Taxed operations ) Operations resuiting from economic activites for which the place of the delvery or the supply is deemed to be located abroad, if the tax would have been deductible had the operations been Carried out within Romania ©} Exempt operations provided under art. 143, 144 and 1441 (exempted operations, with deduction Tight: exports, ICDs, temporary imports, et). 4) For the following financial and benking services supplied to beneficiaries from outside EU (which are tax exempt) 1, the granting and negotiation of credit and the management of credit bythe person granting it 2. the negotiation and management of credit quarantees or collateral guarantees for credit; 3. transactions, inclusive negotiation, related to deposits accounts, current accounts, payment ‘orders, receivables and other similar tiles, excep for the factoring services 4. transactions, inclusive negotiation related to foreign currencies, money, except for collection ites, gold or siver Note: Uniess otherwise specified, all references inthis course notes material are from the Fiscal Code as at 30 September 2012, 22 5. transactions, including the negotiation, except the management or safely keeping of shares, Social parts in trading companies or associations, guaranteed bonds and other financial instruments, except the documents which provide right of ownership over the goods: ©) For the insurancelreinsurance services provided to beneficiaries outside EU For the following transactions, VAT is not deductible: 1. The tax paid or payable by a person inthe name and forthe acount of another person 2. The tax paid or payable on acquisitions of alcoholic beverages and tobacco products, unless these goods are acquired to be sold orto be use in the supply of services, ‘The deduction rights limited to 50% of the tax paid forthe folowing transactions (art 145 1 Acquistion of vehicles weighting below 3,500 ka and having less than 9 seats (including the driver seat) which are not exclusively used for interventions, repair, transport, sling acvty oF any other justified economic activity including travels to clients, banks, potential cients, transport of personnel tofrom their home (if there is no other possibilty) 2. Rental of leasing of the above services 3. Expenses connected to the above vehicles (repairs, maintenance, small parts, fuel, any ‘expense which can be directly connected tothe above vehicle) ‘The delayed decuctblty right (cue to applicabily of cash accountng scheme) isnot applicable jus for: 1. Intra-community acquisitions 2. Imports 3. For other transactions for which reverse charge should be applied Observation Any taxable person has the right to deduct the input/deductible VAT related to its taxable trans before normal registration for VAT since the moment when this person is doing an economic acthvty (but not more than 5 years before registration) with the exception of small companies for which special rules applies, This deduction is made through the first VAT return, VAT may be deducted even forthe acguistions from inactive tax payers or from a taxable person temporary Suspended if this transaction would be deductible in normal conditions Note: Unless otherwise specified, all references inthis course notes material are from the Fiscal Code as at 30 ‘September 2012, 253 18.2 Conditions to exercise the right of deduction (art 146) Im order to exercise the tax deduction right, the taxable person must: 4) Hold an invoice that satisfies the requirements provided by law forthe tax charged to him or ) Do NOT deduct! registered person for VAT in Romania?) Yes ¥ No 3. May VAT be deducted? (isthe eee transaction given the deduction right?) Do NOT deduct! Yes + No 4. Did any exemptions or limitation apply? | Do NOT deduct! {326 ‘small vehicles" or ‘ro-rate"! Yes a NO 5, The documentation requirements are | >} Pe NOT deduct futflled? Yes ¥ Deduct! ‘And as expected the nest questions are: ‘What amount? | ‘When? | Vv | See Ral deductibility an ‘moment restrictions Note: Unless othemise specified, all references inthis course notes material are ftom the Fiscal Code as at 30 September 2012. 258 185 Right of deduction exercised through the value-added tax return (art 147!) Every taxable person has the ght to subtract fromthe total amount ofthe output (or collected) VAT for a fiscal perio, the tlal amount ofthe input or deductible) VAT In respect of which, during ‘the same period, the right of deduction has arisen and can be exercised. if the conditions and formalities to exercise the right of daducion are not fulfil during the fiscal period for {ectaraton ori the documents fr justifying the tax have not been received, the taxable person is entitled to trorise his right of deduction inthe return related to the fiscal period during which these ‘conditions and fomalties are flfiled or ina subsequent return, but not lter than five (6) consecutive years commencing from ‘61 of January of the year following that during which the right of deduction has arisen. 486 Reimbursement of VAT to taxable porsons not registered for VAT in Romania and the a uesement of VAT by other Member Stato to taxable persons registered for VAT in Romania (art. 147) “The following taxable persons nat registered for VAT in Romania and with no obligation to register for VAT in Romania may ask for the reimbursement of VAT: 2) Taxable persons established in other Member States forthe goods and servioes aoa imported in Romania. b) Taxable persons established outside VAT EU teritory for imported or acquired goodsiservices in Romania, based on reciprocity agreements, ¢) Taxable persons forthe aquisition of new means of transport subject oa further exerot ICD (the vamburcoment cannot be above the tax payable f the ICD would be taxable). The deduction reht may be exercised justin the moment of ICD 4) Romanian estabished persons for nancial and banking services exempt with deduction fight ifthe taxable person asking for reimbursement has any overdue abilty towards the Romenian budget, the fiscal ‘authorities wil cancel any VAT reimbursement uni the overdue labilt is paid ‘The VAT reimbursement demand should be filed in fora period of minimum 3 months and maximum 4 calendar year. ifthe request for reimbursement of axis done for periods of up ta 1 calendar year (but longa than 3 months), than the requested amount should be above the equivalent in Let of 400 Euro @ exchange rte of 1 January 2010. Ir the request for reimbursement of taxis dane for periods of 1 calendar year (or fora romaring period up to 1 calendar yea), then the requested amount shouldbe above the equivalent in Let ‘of 50 Euro @ exchange rate of 48 January 2010. Correspondingly, 2 taxable person established in Romania may ask forthe rembusement ‘of VAT paid for imports and accuisitons of goodslservies placed in another Member State (Ihe same procedure being applicable). “The complete offciel request for reimbursement shoud be sent fo the Member State of the solicitor by 30" of September next year. The Member State wil foward to Romanian authorities the request for reimbursement Note: Unessaherise spect ol references in this course nots materia are fromthe Fiscal Code 28220 ‘September 2012 259 18.7 Tax reimbursements for taxable persons registered for VAT purposes (Art. 147) Normally fora certain fiscal period: output tax ~ input tax = payable tax If fora certain fiscal period: input tax > output tax => output tax - input tax = negative tax ‘After determining the payable tax or the negative tax for the operations in the reporting fiscal period, taxal persons must make the folowing adjustments, through the VAT return, Current accumulated negative tax = = Current negative tax + prior accumulated negative tax + any negative tax established by tax audit Current accumulated payable tax = = Current payable tax + any overdue payable tax + any payable tax established by tax audit ‘Ateach VAT retum: '¥ Current accumulated negative tax < Current accumulated payable tax ‘Then: Current accumulated payable tax - Current accumulated negative tax = Balance of payable tax Otherwise: Current accumulated payable tax - Current accumulated negative tx = Balance of negative tax If the balance of negative tax exceeds 5,000 Lei, the taxable persons may claim the reimbursement oft, by ticking the corresponding box in the tax retum fom the reporting fiscal period, the return becoming also @ reimbursement application, or may carry forward the balance of negative tax in the return of the next fiscal Period. Ifthe taxable person claims the reimbursement of tax, this shall not be carried over into the next fiscal period Lecture example 7.12 Required For the following transactions state the VAT to be collectedideducted by each partner ofthe transaction as well as the chargeabilty/deductibilty moment: 4) lleana SRL (a bakery which has to apply the cash accounting scheme) sells cakes of 1,000 lei on 05.08 to Fat Frumos SA. Fat Frumos paid 100 Lei as advance payment on 01.06 and the remaining amount in 10.10. Fat Frumas SA is not qualifying for cash accounting scheme. 5) lleana SRL sells ice-creams to Casanzeana SA (Cosanzeana SA and lleana SRL have the same parent company Zana Padurii SA - which owns 51% from both). The ice ~creams are sent to Cosanzeana SA. inthe month of June and the invoiced is issued on 30* June. The value ofthe invoice is 5,000 Lei (net of VAT) and Cosanzeana paid it 1,000 Lei on 21# August and 4,000 on 15% October. Note: Unless cthenwise spected, al reerences in tis course notes material ae fom the Fiscal Code as at 30 September 2012, 260 Tiana acquired Tua or the fee-ceam van inthe month of sane Of 2,000 Lei from Zmeu SRL. Veana ea athe invoice on 12* July and pad it on 25® October. Zmeu SRLis ‘also a company qualifying for cash accounting scheme. 4) Zmeu SRL provide repairing service to the car of he ‘general manager of Cosanzeana SA inthe month of June, The valve ofthe service was 3,000 Lei and the invoice was ‘issued on 25" June, Cosanzeana paid the invcice on 16° July. Cosanzeana SA does nt quay for cash accounting scheme. The general esnage of Cosanzeara Use nis cat goto clint, tothe bank and 10 Cosanzeana’s offices from his house (although he might use the public transport, e) Zmeu SRL acquired spare parts for cats to be used in the repair services business from Shrek Ld (a Uk regtered company) fr 4000 Le. The tems ave in June bute invoice was issued by Shrek Ltd on 10 August. | f) leana SRL sold croissants to Veronica (a primary ‘school accredited by the Ministry of Education) for 500 Lei. The croissants together ‘with the invoice were sent on 40" June and Veronica paid them on Pa ‘September. | 4) In August, Zmeu SRL also provides fue! to \Vracul SA for the car of his commercial manager. The value of fuel was 2,000 Lei. The car is used exclusively to drive torfrom clients. Vraciul SA is a medical and ‘cosmetic clinic and his ‘estimated pro-rata for this year is 30%. The invoice was issued on 10" August and paid on 20" September ny In January net year Vecsul SA computed It nl prota 40% Notes: 4) Allamounts are net of VAT. 2}. Allabove companies (except Veronica) are registred for ‘VAT in their countries. Solution te Unless cherwisespoced, ll references in his course notes materi te ‘rom the Fiscal Code as at 30 September 2012. 261 Solution 7.12 What? | When? | How much? | why? (ei ‘output | 01.06 | 24%"100 = 24 CChargeabilty moment = payment date 3.09 | 24%6"900=216 | Chargeabilty moment = 90 days ater invoice date FatFrumos | input | 01.06 | 24%"100=24 Deductibilty moment = payment date 40.40 | 24%6"900 = 216 output | 30.06 | 2496%5,000 = ‘Cash aocounting scheme is not apolicable 4,200 TCosenzeana | input | 21.08 | 24%'1,000= 240 Deductbilty moment = payment date 46.10 | 24%"4,000 = 960 output | 10.10 | 24%'2,000 = 480 | Chargeabity moment = 90 days after invoice date input | 25.10 | 2496*2,000 = 480 Deductibilty moment = payment date output | 15.07 | 2496*3,000 = 720 CChargeabilty moment = payment date raeana | input | 15.07 | 50%24%"3.000 | Deduetiity moment © payment date and = 360 restricted deductibility right ‘output | 15.07 | 24%4*4,000=960 | Chargeabilty moment 418" of the month following generating event mn input | 45.07 | 24%*4,000 = 960 Deductibilty moment = chargeabiity moment na output | 08.09 | 24%"500= 120 Chargeabilty moment = 90 days after invoice date ica | Has no deduction right as it carries out only exempt witout deduction right activities ] 7 coupat | 20.09. | 24%%2,000=480 | Chargeebilty moment = payment date jul input | 20.09. | 30%724%'2,000 ) Deductity moment = payment date and use of = 144 estimated pro-rata jul input | Dec. | 10%"243"2,000 | Adjusting period = last lca period of he Year 248 adjustment from estimated tothe final pro-rata ay Jes terse spied, al references ins course notes mata ate fom th Fiscal Code 252130 19. Adjustments on VAT 19.1 Adjustment for non-capital goods (Art 148) If the rules regarding the sel-delivery or the self-supply do not apply, the inal deduction is adjusted following cases: a) The taxable person deducted a different amount than the one it should deduct; b) _Ifthere are adjustments of data taken into consideration forthe determination ofthe deductible ‘occurring after the submission ofthe ofthe dectaration of value-added tax; ©) The taxable person loses the right of tax deduction for movable goods and services unused ‘moment of the loss of the right of deduction, For missing goods (starting with 1* January 2013) a For inactive taxpayers (temporary or not), forall fixed assets except those assets considered “capital goods” those which are fully depreciated, the following adjustments have to be done: 1. When the inactivity is declared, those assets are considered transferred to an activity without dedi right, so the previously deducted VAT should be adjusted accordingly to the accounting non-depre % ofthe asset. The adjustment has to be done inthe last VAT return before inact 2, When the inactivity ceases (or when those assets are executed), the VAT may be deducted accordingly to the accounting non-depreciated % of the asset. The adjustment has to be done in the VAT retum after inactivity. There is no adjustment on deducted VAT for: - Goods destroyed or lost as a result of natural disasters - _ Stolen goods if there is a valid proof for the theft by a final court decision ‘Small goods (Inventory) that are qualitatively damaged as well as for discarded fixed assets (q ‘accordance with the law) which are not qualifying as capital goods + Perishables and normal losses within the law/technical limits If the VAT to be adjusted was not deducted in ful (in the case of delayed deductibility due to cash accounting scheme), the adjustment should be done on the deducted VAT and then, the remaining VAT will be deducted justin the proportion of usage of goods in taxable business, In the case of fixed assets (which are not capital goods for VAT purposes), the delayed VAT will to be deducted \when paid inthe proportion corresponding tothe net tax value of the asset at the time ofthe adjusting event. Note: Unless otherwise specified, all references in this course notes material are from the Fiscal Code as at 30 September 2012, 262 Mlustration 12 ‘Company A which has to apply the cash accounting scheme acquired in January 2013 a fixed asset which is not ‘capital good (or, as well, a company which acquire an asset from another company applying cash accounting sme) for 10,000 Lei + VAT of 2,400 Le. -acavistion date, company A pay 30% ofthe total value of the invoice, ie. paid 3,720 Lei (out of which 720 Lei sT) and the asset is used fuly in taxable business. © So at acguisition, Company A deduct the paid VAT of 720 Lei and consider the remaining VAT ‘as non-deductible => non-deductible VAT (at acquisition) = 2,400 ~ 720 = 1,680 Lei 2014, the asset (with a NTV of 7,000 Lei = 70% of cost) is transferred to an activity without deduction => Company A has to adjust the deducted VAT in proportion to the NTV of the asset. © Adjustment on input VAT = 720'70% = 504 Lei fo be deducted from input VAT in the VAT return of the month March 2014 2014, Company A paid to the supplier of the asset another 40% of is value (ie. 4,960 Lei). Normally, in ent Company A is entitled to deduct the VAT paid (.e. 960 Lei). But because the asset was used in business just for 30% of is life that means that Company A will be allowed to deduct just 30% of the tax © VAT to be deducted in the VAT return of June 2014 = 30%'960 = 288 Lei and the non- deductible VAT willbe 1,680 960 = 720 Lei (which means that the amount of 960 taken out | (@s paid) from non-deductible VAT account will be transferred to deductible VAT (288 Lei) and toa non-deductble expense account (672 Lei)) sider further that in September 2014 the asset is returned in the taxable business and at that time, its value is 6,000 Let i.e. 60% of ts cost ‘second adjusting event the VAT paid in respect of the good is 720+960 = 1,680 Lei © The VAT deductible in this moment is 60%"1,680 = 1,008 Lei to be added to the input VAT in the VAT retum of September 2014. ‘oer 2014, Company A paid the remaining debt in respect ofthis asset of 3,720 Lei and normally, in tis | ‘Company A is entitled to deduct the VAT paid of 720 Lei BUT: <> VAT to be deducted should be adjusted aocording o the NTV of the asset at each generating event (70% non-deductible ~ 60% deductible) ie. 720°70% - 720°60% = 72 = VAT which relate to the period in which the asset was not in taxable business = non-deductible VAT © The VAT paid which may be deducted = 720 - 72 = 648 Lei. summarize! entered 100 % in taxable business, get out after 30% usage and come back to be used the remaining from its entire life the good was in taxable business 20%. VAT in respect ofthis good was: = 720=in January 2013, at acquisition 35 otherwise speciied, all references in this course notes material are from the Fiscal Code as at 30 2012. 263 = (604) in March 2014 adjusted when 70% is taken out from taxable business ~ 288 in June 2014 when the second instalment was paid ~ 1,008 - in September 2014, when 60% is returned in the taxable business 648 — in December 2014, when the last instalment was paid = Total deducted VAT = 2,160 = 90%4*2,400 Lei (the whole VAT related to the acauisttion) 19.2 Adjustment for capital goods (Art. 149) The capital goods are: * all the fixed tangible assets, as defined by the fiscal code, having a normal period of use of at (6) years; * the operations of construction, transformation or modemisation of buildings except the 1 ‘maintenance works on such assets, even if such operations are performed by the beneficiary of 2 leasing or any other similar contract * Packing materials are excluded ‘The deductible tax related to the capital assets isthe tax paid or due related to any transaction in conn the acquisition, production, construction, transformation or modernisation of these assets, except the tax

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