Considerations regarding the Accounting of Value Added Tax – National Particularities within the European Context

The value added tax (VAT) is an indirect tax on consumption, of a general nature, applied to value of economic goods, regardless their final destination, i.e., consumer goods or production means, as well as to the execution of works and providing of services. According to its name, the calculation basis of VAT, paid by the consumer and due by the seller, is the added value related to the last link in the supply chain; this feature ensures the transparency of the tax. VAT is a consumption tax applied to almost all goods and services purchased and sold for use or consumption in the European Union (EU). At Community level, there are standard VAT rules, but their application may differ among countries. In most cases, VAT must be paid for all goods and services at all stages of the supply chain, including sale to the final consumer. Until 1989, Romania applied a single sales tax, followed by the tax on the movement of goods between 1989 and 1992. The latter was replaced by VAT, starting with July 1, 1992, as part of the initial efforts of transition towards the convergence with the applicable tax system within the European context. The introduction of value added tax has determined, in the early stage following the implementation of this measure, the increase of the consumer price index, but later it had a stimulating effect on investments and exports.