Romania: Infringement procedure regarding VAT refund

Recently, the European Commission has published its monthly decisions regarding the violation of community obligations (infringement procedure). Among these, the Commission requests Romania to change its practice regarding the VAT refund procedure.

Unjustified delays.
According to the Romanian legislation, the term for VAT refunds is 45 days. For the period exceeding this term, the taxpayers have the right to request interest for the delay in refunding. The European Commission draws attention to the fact that almost all refund requests are dealt with unjustified delays – sometimes exceeding even 180 days. This practice is not in line with European Union rules, which provide that the VAT needs to be reimbursed quickly so that it will not be a burden for the taxpayers.

Action required.
At this stage of the infringement procedure, Romania needs to respond to the European Commission within two months stating the reasons why these delays in reimbursing the VAT occur. If Romania cannot offer a conclusive response within this deadline, the Commission can address the European Court of Justice to remedy the situation.

Recommendation.
We recommend all companies which have experienced delays in refunding Romanian VAT to request interest. This step will also be eased by the procedure launched by the European Commission.

Pieter Wessel
pwessel@deloittece.com

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