🤔 deductible expense or not?

First: bank statements

• • I need to present them to my accountant for each of my business accounts

  • and in chronological order

Depending on the level of IT integration with my accountant, I can send the bank statements to her printed, or by email, or, there are cases where the accounting software can be linked to my business bank accounts in real time, making it much easier for processing

Second: the invoices I issue

• • Again, this depends on the level of technological integration between the software which I use for invoicing - and the accounting software used by my accountant. Either I print them - or email them, or, ideally, the two pieces of software are communicating to each other via an API

  • If they’re not yet integrated, then I must present the actual invoices to my accountant, either in hardcopy or softcopy, in chronological order

  • including the credit notes (i.e. the cancelled invoices)

  • my accountant declares all invoices in Tax Statement 394

  • the invoices I issue having as object services need to be accompanied by service reception notes

  • for unrecorded revenue, i.e. the services I rendered but not yet invoiced, I need to offer my accountant supporting documents, such as service reception notes

  • the service reception note is a document related to the collecting of the VAT - and it is very important for the companies which are VAT payers

Third: invoices received by my business in Romania

• • must be accompanied by the service reception notes for the reception of services and by the contract

  • A special case are protocol expenses: I must provide supporting documents to justify these expenses. Not only the receipt, which must include my company’s tax ID, but also documentation before and after the meeting, justifying its connection to my business. To be deductible, all protocol expenses must be directly related to the company’s core business. All restaurant costs which need to be deducted must be accompanied by an internal note beforehand, and by a report afterwards: participants & scope of the meeting

Fourth: cash receipts issued/received by my Business in Romania

• • no more than RON 5 000 can be paid/received in cash for an invoice

• • the maximum daily total value of cash payments is RON 10 000. Within this ceiling fall also travel expense accounts

  • if I do not present travel documents, only 50% of the VAT for the fuel receipts is deductible

Fifth: Support documents for work-related travel costs

If I intend to deduct travel costs with fuel, then I need to have travel documents (=ro. “foi de parcurs”). If I can’t present travel documents, then I’m only entitled to deduct half of the VAT. If my firm is a profit-tax payer, then the expense with fuel itself will only be deductible 50%. The travel documents need to display following information:

• • • category of vehicle

    • reason

    • destination

    • number of kilometers

    • the company standard fuel consumption per kilometer

• • fuel receipts:

    • must include the tax code - with the prefix RO, if my business is VAT-payer

    • must include the car licence plate number

  • the total volume of fuel purchased in a month must correspond to the total volume of fuel listed in the travel documents. The quantity of fuel used is calculated in the following way:

    • nr. of kilometers * the company standard fuel consumption per kilometer must equal the quantity from the fuel receipts handed over to my accountant