Tax Flash no.13/2020 – Instructions for the application of the VAT exemption

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Order no. 2148/2020 regarding the amendment and completion of the Instructions for the application of the VAT exemption for the operations provided in art. 294 paragraph (1) let. A) -i), art. 294 para. (2) and art. 296 of Law no. 227/2015 on the Fiscal Code, approved by Order no. 103/2016 was published in Official Gazette 628/2020

Amendments in exports

  • The definition of the exporter from the VAT perspective is aligned with the provisions of customs legislation. Thus, in the case of exporters of legal entities established outside the EU, in order to apply the VAT exemption for the export operation carried out in Romania, the supplier must hold a DVE with its data entered in box 44.
  • The exporter can prove the actual exit of the goods from the territory of the European Union by other means of proof than those specifically provided by the Order, according to the provisions of case C-275/18 «Milan Vins».

“Quick fixes”

  • Following the implementation of the “Quick Fixes” Directive through Ordinance no. 6/2020, the Order aligns the Romanian legislation on VAT with the provisions of EC Regulation no. 1912/2018, as well as with the Jurisprudence of the Court of Justice of the European Union in certain recent cases.

Among the main changes we mention the following:

The deadline for submission of documents

  • The deadline for submitting the supporting documents for the application of the VAT exemption for intra-community supplies of goods was extended from 90 days to 150 days from the date of the chargeable event.

Amendments regarding the justification for intra – Community transport of intra – Community supplies of goods

  • Clarifications are provided on the application of “Quick fixes” in connection with the VAT exemption in intra-Community transactions in goods.
  • The amendments take into account the alignment of national legislation with the provisions of Regulation (EU) 2018/1912 on the documents necessary to justify the intra-Community transport of goods in the case of intra-Community supplies.
  • The application of the Presumption is detailed, in the sense that the VAT exemption for intra-community supplies applies if the supplier holds two or more documents, issued by two parties independent of each other and by the seller or buyer, as presented in para. (1) and (3) art. 45 a of Regulation 282/2011.
  • In the category of independent parties, within the meaning of art. 45a of Regulation 282/2011, are included the persons that are not affiliated, as defined in art. 7, point 26 of the Fiscal Code.
  • The necessary documents necessary to justify the intra-community transport in the case of intra-community supplies that do not fall on the presumption provided in art. 45a of Regulation 282/2011 are provided.
  • If the invoice issued for intra-Community supplies has the incorrect beneficiary’s VAT code, the correction may be performed during the tax audit.
  • The buyer’s declaration (necessary to justify the VAT exemption in the case of intra-Community supplies for which the transport is provided by the buyer) must be submitted by the 10th day of the month following the intra-Community supply or at the latest within 150 days of the intra-Community supply.
  • The VAT exemption for intra-Community supplies does not apply if the supplier has not reported the transaction in the recapitulative statement. Incorrect reporting (reporting in another tax period, incorrect information on the value of the transaction, type of transaction, customer identification data) can be remedied by the end of the tax audit.

Other amendments

  • Clarifications are provided regarding the treatment of services performed in Romania on movable goods purchased or imported for processing in Romania and which are subsequently transported outside the European Union.
  • Clarifications are provided on the application of the VAT exemption in the case of supplies of goods and services for the benefit of ships which are attributed to navigation at sea, as well as for the use of aircraft used by an airline engaged mainly in international passenger transport, and / or paid goods.

The Romanian version of this newsletter is available here.

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