Average VAT Return Period Increases By 3 Months

The average period for obtaining a value-added tax (VAT) return this year is approximately three months longer than it was in the past few years, according to the records of R&M Audit. VAT returns are an important source of liquidities, considering that the ongoing crisis has made financing into a problem for most companies, which are having increasing difficulties to secure the money necessary not only for investments, but also for day-to-day operations.

"The very significant delays that companies have to deal with in obtaining their VAT returns are notably contributing to the ongoing increase in the number of bankruptcies and therefore to aggravating the crisis we are currently facing," said R&M Audit Managing Partner Mirela Serban.

According to a press release to BURSA, taxpayers can only apply for a VAT return if the value of the VAT subject to return exceeds 5,000 RON. VAT returns are not operated by default, but only based on a written application by the entitled taxpayer. The Fiscal Procedure Code stipulates that the National Fiscal Administration Agency (ANAF) has 45 days to audit the applicant and determine whether the application for a VAT return is legitimate or not. The audit itself cannot exceed 30 days and, if the conclusion is positive, the applicant receives the VAT return within another 30 days from the date of the written note stating the conclusions of the audit.

"Unfortunately, this is not the way things happen. Besides the significant delays beyond the legal deadlines, the taxpayer has no way of knowing how long the delay is going to be and therefore cannot make any plans regarding the funds in question," Serban explained. According to her, the law only works one way: if the taxpayer is late with their VAT payments, the State imposed penalties without hesitation. However, the State never pays interest on the VAT returns that are delayed past the legal deadline, Serban noted.

According to information released by the ANAF, over 8,700 applications for VAT returns worth 4.28 billion RON were being processed as of 30 June 2009. Of the total number of applications, 4,747 applications (54.5 per cent) worth 1.06 billion RON were within the legal processing deadline, 858 applications (9.8 per cent) worth 685 million RON had been suspended, whereas 3,108 applications (35.7 per cent) worth 2.54 billion RON had exceeded the legal deadline for processing.