Q: What are the tax rules and the market practice as regards granting turnover bonuses to customers in Romania? Are there any specific requirements related to documenting of such bonuses?

A: Turnover bonus is a common practice in Romania. According to art. 286, para (4) of the Fiscal Code such bonuses are not included in the VAT calculation base if granted in the same time with the delivery (on the same invoice). If such bonuses are granted after the delivery, the basis to calculate the VAT for the delivery must be reduced accordingly.

The turnover bonus must be granted according to the delivery contract and to the commercial practices of the company.

According to the accounting regulations, the book value of goods does not include the value of the bonuses, therefore the book value of the goods will be the price (+transportation and other similar elements if any) minus the bonus. If the bonus is granted after the delivery, the bonus will be recorded as a decrease of expenses.