At what price should the sale be made?

The Romanian Tax Code specifies that all transactions must be carried out at market value. This rule applies regardless of whether the vehicle is fully depreciated or not.

Of course, if the company is registered for VAT purposes, VAT must be added to the selling price.

If it is fully depreciated, can it be sold for a “symbolic price”?

The answer is no. As mentioned earlier, the selling price must reflect the market value of the vehicle. The tax authorities may recalculate and tax accordingly any transaction that is considered not to have been carried out at market value.

If the vehicle is damaged or defective, can it be sold at a lower value?

The answer is yes, but the circumstances that justify a sale below market value must be reasonable and properly documented. The best suggestion would be to request a valuation report prepared by an authorised evaluator.

Under what conditions can it be sold without VAT?

If the vehicle was purchased by a company registered for VAT and was used in its regular business activity, it cannot be sold without VAT.

A legal entity that is not registered for VAT purposes may sell a vehicle without charging VAT, as it is exempt from this tax.

What is the second-hand regime?

This is a system provided by the Tax Code under which a vehicle can be purchased and sold under the special VAT regime, namely the margin scheme. It can be applied only by car dealers, and only for vehicles held as inventory (goods for resale).

If the car dealer is registered for VAT purposes, it owes VAT on the commission charged on the sale of a vehicle under the second-hand regime.

Change of status from VAT payer to non-VAT payer

A legal entity registered for VAT purposes that has purchased a vehicle for which it deducted VAT, must adjust the initially deducted tax when it becomes a non-VAT payer, if the change of VAT status from payer to non-payer takes place less than 5 years from the date the vehicle was purchased.

Is the remaining un-depreciated value deductible if the vehicle is sold at a lower price than that value?

The answer is yes. If the market value at which the vehicle is sold is lower than the un-depreciated value, for any reason, the difference is fully deductible for corporate tax purposes.

Is the deductible remaining un-depreciated value calculated in the same way as monthly depreciation?

There are no specific limitations on the deductibility of the remaining un-depreciated value, and interpretations that limit its deductibility to the number of remaining months × 1500 lei are not supported by the legal provisions in force. The remaining un-depreciated value no longer represents a depreciation expense as such, but an expense related to the disposal of fixed assets, which is not subject to the same rules of deduction and calculation.

Is tax paid on the sale value of the vehicle?

Yes, depending on the tax model of each company, when selling a vehicle from the estate, profit tax or micro-enterprise income tax is paid.
For a selling company paying profit tax, it will be calculated as follows: (Sales value – Remaining undepreciated value)*16%. The values ​​in this calculation are those excluding VAT.
For a selling company paying micro-enterprise income tax, the tax rate of 1% or 3% is applied to the entire sale value, excluding VAT.

Note: This text is valid as of the date of its publication, is for guidance only and represents an interpretation by the specialists of Cont Consulting, and is not intended to replace the legal provisions in force. We are not liable for any damages arising from the use of this material for legal purposes or as evidence in any potential litigation. The amounts and figures used in the article above were those in force at the time of writing and may be subject to change.