VAT on Collection: Enhancing SME Cash Flow by Paying VAT Only Upon Invoice Collection

• The VAT on collection system allows SMEs to pay VAT only when invoices are actually paid by clients, improving cash flow and reducing credit risk.
• The system is optional and was introduced by Government Ordinance No. 15/2012, with further updates making it optional from 1 January 2014.
• Invoices under this regime must include the mention “VAT on collection” as per the Fiscal Code.
• The collection date for VAT purposes depends on the payment method (offsetting, bank transfer, payment instruments, or card payments), with specific rules for each.
• The system reduces fiscal pressure and financial strain on SMEs by aligning VAT payments with actual cash receipts.

Source: teaha.ro

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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