CONTROVERSIES ON THE APPLICATION OF THE VAT SPLIT PAYMENT MECHANISM

Taking into account the urgent need to attract additional amounts to the state budget to cover the increased budget expenditures involved in the implementation of the government program, by the end of August 2017, the Government of Romania adopted an ordinance obliging the entities to apply, starting on January 1st 2018, the VAT split payment mechanism, system which no longer allows them to use the value added tax cashed affently to the delivery of goods and provision of services, which is why these amounts are to be cashed in separate accounts opened by entities in the state treasury or credit institutions. Only that, later, through the draft of Law on the approval of that ordinance, the Senate made changes to the legislative act, so that the VAT split payment would only apply to companies in insolvency or that register delays in payment of the tax. Although this measure aims at combating the tax evasion and fraud by increasing the voluntary compliance and tax collection degree, the measure can prove to be unfounded, which violates the legislative technique and, in particular, the Community provisions by being inappropriate. In this context, the main objective of this scientific approach is to identify the special situations that arise at the level of entities as a result of the application of the breakdown mechanism of value added tax and to determine the possible advantages and disadvantages