TAX AND ACCOUNTING RULES APPLICABLE TO VEHICLES WITH LIMITED TAXATION TREATMENT

Abstract

In the context of the deep changes imposed by our country's integration into the European Union, it is wellknown that tax law has undergone substantial changes, especially in terms of value added tax. However, with thecoming of the financial and economical crisis in Romania, the authorities have always been concerned with attractingadditional amounts to the general consolidated budget, justification that contributed to the issue of legislativedocuments in order to limit the deduction of certain expenses incurred by entities not directly related to businessperformance, and the value added tax in respect thereof. Based on this consideration, in this paper we intend toaddress the accounting and tax implications that legislative changes applicable from May 1, 2009 [2], regarding thelimitation of deduction right for vehicles, have on both the taxable income from a firm and on the cash assets, withoutomitting to analyze the changes affecting this sector since January 1, 2012 and thereafter on July 1, 2012. Therefore,the purpose of this paper concerns, on the one hand, the fiscal approach in terms of income tax and VAT for the purchase of vehicles (including leasing), fuel and operating , maintenance and repair costs thereof, and on the otherhand, the accounting rules required for motor vehicles, owned or in use, subject to expense deduction limitation.

Keywords

• vehicles/motor vehicles limited taxation treatment
• VAT
• non-deductible expenses
• tax treatment
• accounting rules