Finance News by Mazars Romania June 2023

Fri | 30.06.2023

Accounting/audit/tax

Mazars launched the Central and Eastern European tax guide 2023

Mazars published for the eleventh time its regional tax guide, which presents snapshots and comparative charts of the tax systems of 25 CEE countries for 2023.

This guide, which has grown from covering 15 countries in 2013 to 25 in 2023, delves into a broad spectrum of tax issues, focusing on corporate income taxation, transfer pricing, employment, and sales taxes.

The 2023 guide offers a detailed analysis of tax regimes across a range of countries including Central and South-Eastern Europe, Germany, Austria, Moldova, Ukraine, the Baltic States, and for the first time, Central Asian countries such as Kazakhstan, Kyrgyzstan, and Uzbekistan.

Mazars invites you to visit the interactive online platform of the Mazars CEE Tax Guide 2023.

Key findings:

The trend of declining public charges on employment seems to be coming to an end;
The global minimum tax must be incorporated into national legislation by the end of the year;
The United States has terminated its tax treaty with Hungary.

Read more info HERE.

The impact of VAT on cash flow, by Mazars

The increasing pressures generated by the globalisation process, together with the economic context of the last years, have had a negative impact on the cash flow of companies, by widening the time gap that ties up the availability of money in various forms of lending. In general, maintaining the cash flow is a key factor to the success of any company, so given the current complex environment, many organisations are looking for innovative solutions to improve their cash flow and manage their day-to-day operations smoothly.

Referring to the tax component of VAT, which generates the largest cash flow for some companies, there are certain legislative provisions that companies should take into account in order to manage their cash flow as efficiently as possible.

Where should we look when talking about the VAT position?

Each company should analyze its VAT position from both a VAT collected and a VAT deductible perspective.

Therefore, a company should analyse the situations in which customers are no longer able to pay their invoices (due to bankruptcy or the start of a reorganisation plan), thus being able, under certain conditions, to recover part of the VAT collected, as well as benefit from reduced VAT payments to the state budget. As of 1 January 2019, the recovery of VAT related to unpaid debts can be performed starting with the date of the client's entry into the bankruptcy proceedings or from the date of the implementation by the client of a reorganisation plan confirmed by a court decision.

The adjustment may be made within a maximum of five years from 1 January of the year following the year in which the decision to enter bankruptcy was taken or the court decision confirming the reorganisation plan was handed down.

If the bankruptcy procedures have started before 1 January 2019 and the final and irrevocable court decision to close the procedures provided by the insolvency law was not issued, the adjustment can be performed by 31 December 2023 at the latest.

Mazars’ tax experts prepared for you a material regarding the subject.

Read more info HERE.

Pillar Two Global Anti-Base Erosion Rules (GloBE Rules), by Mazars

1. Scope of OECD and EU tax reform

Action 1 of OECD’s BEPS Action Reports from 2015 outlined the difficulties generated by the digitalisation of the economy from a tax perspective.

The continued work of OECD led to the Two-Pillar approach or BEPS 2.0 which addresses new taxing principles in the current highly digitalised economy.

In October 2021, the international community, including more than 130 jurisdictions, reached a landmark agreement on the adoption of a Two-Pillar solution addressing the tax challenges arising from the digitalisation of the economy.

OECD’s post BEPS international tax reform aims to counter harmful tax competition and establish a global minimum level of taxation by means of Pillar 2.

Pillar 2 is designed to discourage base erosion and profit shifting by ensuring that multinational groups pay a minimum rate of corporate tax of 15% in every jurisdiction in which operations are performed.

Mazars can help you identify and assess the impact of this new and complex legislation.

Read more info HERE.

Latest tax alerts, by Mazars

Preventing and combating tax evasion

Law no. 125/2023 supplementing Law no. 241/2005 on preventing and combating tax evasion has been published in the Official Gazette no. 440 on 22 May 2023.

The law transposes certain provisions of Directive (EU) 2017/1371 on the fight against fraud to the Union's financial interests by means of criminal law further to the infringement procedure launched by the European Commission.

According to the new regulations, any action or inaction within cross-border VAT fraudulent schemes that results in the reduction of at least EUR 10 million of the resources of the European Union budget constitutes a criminal offence sanctioned with 7 to 15 years of imprisonment and the prohibition of certain rights.

New VAT-exempt transactions

On 12 April 2023, Law No. 88/2023 for amendment and supplementing Law No. 227/2015 on the Tax Code was published in the Official Gazette No. 40, Part I.

Main changes:

The delivery of prostheses and orthopedic products, which currently benefit from a reduced VAT rate of 9%, will be exempt from VAT from June 2023;
Certain supplies of goods (e.g. medical equipment) and services (e.g. construction, modernization services) made to public hospitals or NGOs for the benefit of public hospitals will be exempt from VAT from June 2023. The VAT exemption will be applied either directly or by return of the tax paid, in accordance with the methodological implementing rules that will be published.

Read more info HERE.

This article is provided by our Finance Partner, MAZARS Romania

Share this on: