Challenges of the Knowledge Society (Jun 2022)
VALUE ADDED TAX ON ARBITRATION FEES
Abstract
Private alternative jurisdiction (as defined in art. 541 of the Romanian Code of Civil Procedure) arbitration is not free of charge. Those who judge a dispute, being chosen and empowered to do so by the parties by their arbitration agreement, provide a service. In principle, this service can also be free of charge, but as a rule it is a service provided by professionals (in the sense of recognized specialists in law and possibly in the field in which the dispute in question arose) who, although they do it occasionally, do not do it for free, as they are remunerated for their work through a so-called "fee". To this must be added the costs of litigation which relate to administrative matters, administration of evidence, experts' and lawyers' fees, etc. In the case of institutional arbitration, a significant part of the costs is represented by the so-called "administrative fees" which cover the costs of premises, logistics, archives and the payment of staff responsible for the administration of cases. As a supply of services within the meaning of the tax law, it falls within the scope of VAT (art. 268 of the Tax Code). In the case of institutional arbitration, several questions arise in relation to the tax debtor and the tax debt consisting of VAT collected to the budget.
