In order to work within the law, one needs to define the VAT rates and categories for each statutory type covered by the Fiscal Code in one's country. For Romania, the following definitions are recommended:
Tax Categories - define a tax category for each major VAT rate:
24%VAT - contains all VAT rates applicable to all products of 24% VAT rate
9% VAT - contains all VAT rates applicable to all products of 9% VAT rate
5% VAT - contains all VAT rates applicable to all products of 5% VAT rate
Exempt VAT - contains the VAT rate applicable to all tax-free products
Exempt VAT (outside the Tax Declaration Report) - for all operations outside the Tax Declaration Report.
Tax Rates - define a VAT rate for each statutory type covered by the Fiscal Code, with a minimum of one for each column of the VAT Journal. For example, for the 24% VAT category, define the following rates:
24% - VAT rate used for acquisitions and sales on Romanian ground for all products with a 24% rate in the Fiscal Code.
24% Reverse Tax - VAT rate used for reverse tax acquisitions in the European Union for all products with a 24% rate in the Fiscal Code.
0% import/export - VAT rates used in the Romanian - Non European Union transactions of all products with a 24% rate in the Fiscal Code.
0% Reverse Tax - VAT rate used for sales in the European Union for all products with a 24% rate in the Fiscal Code.
24% Delayed VAT - VAT rate used for acquisitions and sales on Romanian ground for all transactions that are established by the Law to be taxable at cash collection.
In the following table we will indicate the major applicable VAT rates as according to the last version of the Fiscal Code, including the correspondence on the acquisitions and sales columns of the VAT journal:
Define a tax that can be applied to all situations where a product is acquired from a EU country or from outside the EU, without having to define a tax for each country, as such:
When defining the Location of the Business Partners, you will find the field ZIP and the checkbox In European Union within the Address field. Check the In European Union checkbox for all Business Partners located inside the EU, whereas the ZIP field should be filled in with either UE or nonUE, for each individual partner.
Each EU Business Partner will have their ZIP field filled with UE.
Each non-EU Business Partner will have their ZIP field filled with non-UE.
Romanian Business Partner will have their ZIP field filled with the correct value of their postal code, or left empty, accordingly.
When defining tax rates, there is a tab called Tax ZIP. This will be used to indicate the postal code where the respective tax will be applied. The values used will be UE and nonUE.
Each tax applicable to intra-communitarian acquisitions will have the ZIP field in the Tax ZIP tab filled with UE.
Each tax applicable to intra-communitarian shipments will have the ZIP to field in the Tax ZIP tab filled with UE.
Document level applicability gets derived from determining the country of the Business Partner and the postal code on the document.
In order to correspond to the current legislation regarding the "VAT at Cash Collection" we need to define the following settings:
A. For all organizations registered at the Delayed VAT Operators Registry (ANAF), the Tax Delayed checkbox in the Organization Info tab of the Organization window will be selected. This will be applied and manually maintained by the accountant. The checkbox can be manually de-selected in the second fiscal period, after passing the 2.250.000 RON threshold.
B. For all other organizations that only have acquisition transactions with the organizations inside the ANAF, the Tax Delayed checkbox will be selected at Business Partner level. This will be applied and manually maintained by the accountants, who check the ANAF registry's members monthly. For speed purposes, use the Update Business Partner Delayed Tax Status process, found in Performance Analysis -> Accounting Rules -> Taxes -> Update Business Partner Delayed Tax Status. In order to use this process, the operator needs to download a file found on the ANAF website: http://static.anaf.ro/static/10/Anaf/TVA_incasare/ultim_aaaallzz.zip , where "aaaallzz" is replaced by the current year, month and day, respectively, thus representing the date at which the check-up is done. The .zip file content needs to be extracted, since you only need the "istoric.txt" file for the process. The process accepts two running options : Simulation or Execution. With the Simulation option, the process returns a report with possible changes only. Should these changes be correct, the process can be run without the Simulation checkbox so as to update the values of the Delayed Tax checkboxes in the definition of each Business Partner found or not in the "istoric.txt" file after their CUI.
C. New VAT rates, with the Acquisition and Sale types separated, with the new checkbox Delayed Tax.
"24% Delayed Tax" → needs to be enclosed in the 24%VAT Category.
"9% Delayed Tax" → needs to be enclosed in the 9%VAT Category.
Note: all products have a Tax Category in their definition, so that it is very important to define new rates and link them to a category.
In the Accounting tab, the Tax Expense account will be filled in with the account 4428 from the Account Element. The account needs to be defined in the Account Element, if it hasn't been already. The rest of the accounts remain unchanged. The new account will also be defined in the default accounts on the Accounting Schema.
Limitation: starting with 01.01.2013 you will NOT have to set the accounting schema with Tax Expense (the one applicable to the Reception), since it is incompatible with the new system. The setup of the accounting schema will be modified so that it will become useful to the smaller clients (under 500k) that will use delayed tax.
D. At Document Type level, you will have to define a new type strictly for the Delayed Tax transactions, for the Supplier Invoice (AP Invoice) and Customer Invoice (AR Invoice), respectively, that is separate from the invoice. This document type will achieve the following:
it offers the possibility to easily filter the tax delayed invoices (relatively excisable, in this case);
it offers the invoice operator the possibility to punctually decide whether the respective transaction still meets the conditions of the delayed tax mechanism, by checking the delayed tax registry.
If the Business Partner (Vendor) has the Delayed Tax checkbox selected, all the products on the vendor's invoice will automatically have applied the rate with the same checkbox, from the products' respective VAT categories (9% or 24% delayed tax). The same rule applies if the organization operating the documents has the Delayed Tax checkbox selected.
Note: if there are products on the invoice that have in their definition a tax category with no rate with a Delayed Tax checkbox, then the category's default VAT rate will be applied. This represents the products that are VAT exempt (have a distinct VAT category) or the products that are defined as reverse tax (have a distinct VAT category).
In the Invoice Tax tab of the Invoice (Vendor) window, you will be able to view the records in the Due Tax Line tab for each particular record. You will also be able to create new records here by running a new specific process that computes the credit VAT on the Delayed Tax invoices.
For the VAT rates with the Delayed Tax checkbox only, you will use on Debit the account defined in the Tax Expense field from the rate definition (4428).
If the organization has the Delayed Tax checkbox, all the products on the customer's invoice will automatically have applied the rate with the same checkbox, from the products' respective VAT categories (9% or 24% delayed tax).
Note: if there are products on the invoice that have in their definition a tax category with no rate with a Delayed Tax checkbox, then the category's default VAT rate will be applied. This represents the products that are VAT exempt (have a distinct VAT category) or the products that are defined as reverse tax (have a distinct VAT category).
The rates are written in the Invoice Tax tab.
In the Invoice Tax tab of the Invoice (Customer) window, you will be able to view the records in the Due Tax Line tab for each particular record. You will also be able to create new records here by running a new specific process that computes the credit VAT on the Delayed Tax invoices.
For the VAT rates with the Delayed Tax checkbox only, you will use on Credit the account defined in the Tax Expense field from the rate definition (4428).
For a way to compute the due tax, see the "Delayed VAT Definition" section.