Impact of VAT on the Profitability and the Cash Flow of Romanian Small and Medium Enterprises

Maria Zenovia Grigore () and Mariana Gurau ()
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Maria Zenovia Grigore: Finance-Accountancy Department “Nicolae Titulescu” University 185 Calea Văcărești, 4th District, Bucharest, ROMANIA
Mariana Gurau: Finance-Accountancy Department “Nicolae Titulescu” University 185 Calea Văcărești, 4th District, Bucharest, ROMANIA

Global Economic Observer, 2014, vol. 2, issue 1, 170-180

Abstract: The options available to taxpayers make tax systems attractive and give them an opportunity to choose one system or another after a careful analysis of the fiscal advantages and disadvantages of each choice. A small or medium company has to explore the options available, whether that is VAT registration or de-registration or choosing the best VAT special scheme. VAT optimisation is particularly interesting because of the high cash flow involved and because of the cash flow benefits that can be obtained. This paper presents an analysis of VAT costs and their impact on profitability and cash flow of small and medium enterprises. We also analysed specific mechanisms to improve profitability and cash flow through VAT optimisation.

Keywords: VAT optimization; special VAT schemes; the compliance costs; profitability; cash-flow (search for similar items in EconPapers)
Date: 2014-05
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ntu:ntugeo:vol2-iss1-14-170

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