Features of VAT Accounting and Fiscality – History, Practices and Prospects

The value-added tax (VAT) is an indirect tax, supported by the final consumer of the good/service that it is applied. During the productive and commercial cycle, the companies pay VAT according to the value added on the good/service. Quite recently appeared in the fiscal system of different states, VAT has a big spreading area. The taxation rates are different from a country to another, according to the economic conditions and the fiscal law (in EU, from 15% for Cyprus and Luxembourg to 27% for Hungary, and outside EU, from 3% for Iran, to 25% for Norway). In Romania, the rates are: the standard rate of 24% and the reduced rates of 9% and 5%, the payment term being monthly or quarterly, according to the company turnover. In the accounting and fiscality area, VAT presents special features, conditioned by the type of activity and the company size. In order to support the small companies, starting with 01.01.2013 the " VAT Encashment System " was introduced, that relates the VAT payability to the encashment moment of the invoice. The VAT impact on the profitability is an aspect that must be considered when we discuss about: costs, cash-flow, results, liquidity, solvency or efficiency rates. 1. Introduction VAT represents a general taxation on the consumption, that is applied once on the goods and services. In its area, the sales and buying of goods and services are included (inclusive the imports). (O.G. no.3/1992). There are not taxed: the exports, the liberal professions, the social, cultural and sportive manifestations, the activities in hospitals, schools etc. The payment duty is solidary for all the companies that participate at the production and sale of the same product/service, proportionally with the contribution of each of them in the product/service value. VAT is calculated by applying the rate on the sale price in a certain level, and the payers have the duty to keep a detailed evidence of the sale and buying operations and of the due and paid tax. The specific elements of VAT stipulated by the Fiscal