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New VAT regulations as of 1st January 2012

Government Decision No. 1135 of 9 November 2011 for the amendment of the Government Decision  No. 759/2007 on  the rules of eligibility of the incurred expenses within the operations financed by operational programs (published in the Official Gazette no. 849 on the 30of November 2011) (“GD no. 1135/2011“), and the Council Regulation (EU) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax (published in the Official Journal under no. 268L of 12 October 2010) (the “Council Regulation no. 904/2010”) will come into force on 1 of January 2012.

According to  GD no. 1135/2011 the expense regarding the non-deductible value added tax (the “VAT”) becomes eligible for all the operational programs financed from structural funds. In order for such expense to be eligible, it must be made in connection with some eligible expenses incurred in relation to the projects financed from structural funds.

GD no. 1135/2011 stipulates that the VAT expenses will be reimbursed provided that the beneficiaries will submit an affidavit regarding the non-deductibility of the VAT relating to the expenses mentioned in the reimbursement request. The affidavit must be attached to the reimbursement request and must be certified by the competent fiscal authority. The competent fiscal authority has to certify the affidavit within 3 working days from the date when the beneficiary has submitted a request in this respect together with the supporting documents.

Council Regulation no. 904/2010 lays down the conditions under which the competent authorities from the Member States (responsible with the application of the laws on VAT matter) are bound to cooperate with each other and with the Commission in order to ensure the compliance with VAT laws.

Also, the Council Regulation no. 904/2010 sets the norms and procedures enabling the competent authorities of the Member States: i) to cooperate and to exchange among them any information that may be of use to properly determine the level of VAT; ii) to monitor the correct application of VAT, particularly on intra-Community transactions and to fight against VAT fraud.

The collection and exchange of such information by means of electronic devices by the Member States will comply with certain norms and procedures provided by the same enactment.