Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series, Special Issue, volume II/2017 „ACADEMICA BRÂNCUŞI” PUBLISHER, ISSN 2344 – 3685/ISSN-L 1844 - 7007 THE VAT SPLIT-PAYMENT MECHANISM, MEASURE FOR COMBATING TAX EVASION IN ROMANIA IONUT - GHEORGHE CARAUS, Phd. Student, “LUCIAN BLAGA” UNIVERSITY OF SIBIU email:ionutzca78@gmail.com MADALINA CARAUS, Phd. Student, “LUCIAN BLAGA” UNIVERSITY OF SIBIU email:mada.caraus@gmail.com IOANA TATIANA STANESE, Phd. Student, “LUCIAN BLAGA” UNIVERSITY OF SIBIU email:Tatiana@stanese.ro GABRIELA DOBROTA, Phd. professor, UNIVERSITY “CONSTANTIN BRANCUSI” TARGU JIU email:gabi.dobrota70@gmail.com Abstract The need to improve the methods of collecting and detecting value-added tax amounts is an increasingly difficult process for tax authorities. In this respect, a rigorous analysis of the ways in which the state manages to prevent or combat VAT evasion, in the context in which VAT fraud accounts for about 60% of Romania's total tax evasion, is required. Therefore, the new provisions concerning the VAT split payments, applicable from January 1, 2018 for all categories of taxpayers, can contribute significantly to the efficiency of collection, of the amounts derived from the VAT, as well as to reduce tax evasion in the field of value added tax and providing a fair competitive environment, by eliminating benefits for economic operators with incorrect tax behavior who do not pay VAT to the State budget. Also, through these measures taken by the state, the main motivation for the introduction of the value added tax split- payments mechanism, contributes to the increase of the voluntary compliance degree by providing the financial resources for the payment of VAT due to the State budget. Keywords: VAT, VAT split-payments, VAT gap, tax evasion, State budget Classification JEL: H20, H26, H61 1. INTRODUCTION The need to collect revenues to the State budget represents a challenge for the governors of any state. However, taxpayers often try to evade tax obligations, especially if the tax burden becomes unbearable. Tax evasion is a great way to avoid payment of liabilities arising from work carried out. The spirit of tax evasion is born out of the simple game of interest, whatever the tax burden is, and which is but a form of selfishness and human amorousness (Saguna, 2000). The phenomenon of tax evasion is highly debated and reviewed in the literature, both conceptually and structurally as well as in terms of causes and effects generated or measures to combat: (Alm and Martinez-Vazquez, 2007), (Văcărel, 2008), (Rădulescu, 2007), (Aniței, 2014), (Florescu et all 2013), (Hoanță, 2010), (Golban, 2015), (Balaban, 2006), (Pădurean, 2010) and so on. The option to earn a higher income seems to be the fundamental motivation for any individual who gets involved in tax evasion or shadow economy activities (Pickhardt and Prinz, 2012). 47