Tax Flash No. 2/2020 – The amendment and completion of the Fiscal Code

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Ordinance 6/2020 for amending and supplementing Law 227/2015 regarding the Fiscal Code, as well as for the regulation of certain fiscal-budgetary measures, was published in the Official Gazette 72/2020


Corporate Income Tax

The Ordinance transposes into the Romanian legislation Directive (EU) 2016/1164 as amended by the Directive (EU) 2017/952 regarding the non-uniform treatment of hybrid elements.

  • The purpose of the new regulation is to combat the uneven treatment of hybrid financial instruments or entities, elements that exploit the differences between the tax systems to obtain tax advantages (double deductions which arise from different interpretations regarding the qualification of financial instruments, of payments, of entities or from payment allocation).
  • Accordingly, new categories of legal persons/entities which must pay corporate income tax are defined regarding the situations that imply the existence of uneven treatments of the fiscal residence.


  • Starting with 3 February 2020, the Quick Fixes Directive is transposed into the national law.
  • The Quick Fixes package consist of four measures and aim tackling VAT fraud in intraEU supplies of goods as well as a harmonization even a simplification for call-off stock structures and chain transactions.
  • The four Quick Fixes are:

QF 1: Chain transactions (art. 275 from the Fiscal Code)

Until now, a few ECJ decisions have dealt with this topic, bringing however more controversy than practical solutions. The Quick Fixes bring a specific rule to identify the transaction to which the intra-EU transport is allocated, being thus the VAT exempt sale. This rule will apply when the transport is under the responsibility of an intermediary in the chain – being excluded the cases where the transport it’s done by the initial supplier or end customer, these transactions being qualified as standard intra-EU sales.

A chain transaction (A-B-C) is when two or more consecutive supplies of goods are subject to one single transport between two EU Member States (not applicable when bringing the goods from outside the EU).

For the chain transaction:

  1. a VAT exemption can only be attributed to one of the supplies in the chain (A-B or B-C), being the intra-EU supply;
  2. the other supply(s) are local supplies subject to cash VAT.

What’s new?

  • The VAT exemption is applicable for A-B transaction when the intermediary (B) is responsible for the transport of goods. This is also valid in longer supply chains.
  • If the intermediary communicates to A its VAT ID number from the EU Member State wherefrom the goods are dispatched, the VAT exemption will be applied to the sale made by the intermediary to its customer (B-C).
  • Intermediary operator – a supplier in chain in charge with the transportation of the goods.


  • Less flexibility on allocating the transport and determining the VAT exempt intra-EU supply;
  • Applicability on complex chain transactions;
  • Review current chain transactions and delivery conditions agreed;
  • Logistic process review – group logistics arrangements, Incoterms and re-charge of transport costs;
  • Attention to the communication of VAT ID number.

QF 2 and 3: VAT exemption on intra-EU Supplies (art. 294 from the Fiscal Code)

With the purpose to align the conditions for applying the VAT exemption for intra-EU transactions, these two measures aim to address the most common uncertainties, relating to VAT ID of the client and proof of transport of the goods. Also, a new approach is included which in principle should guarantee the VAT exemption – presumption.

What’s new?

1. VAT ID number – mandatory substance condition for applying the VAT exemption for intra-EU supplies transactions. This rule exists in the Romanian VAT law since EU Accession.

2. Proof of transport – minimum two proofs are need in order to justify the transportation of the goods – issued by two different and independent parties.

Two new concepts are implemented:

(i) Independent party (from the supplier or the customer) issuing the transport document for applying the VAT exemption.
(ii) Client declaration – when the transport is organised by the client, to prove that goods were received – short time to make it available.

3. Correct reporting in the Recapitulative Statement – become a condition for applying the VAT exemption for intracommunity supplies.


  • Check the validity of the Client’s VAT ID number – when the VAT ID number should be made available?
  • Recapitulative Statement reporting – erroneous reporting leads to application of VAT (denial of VAT exemption).
  • Review the current process in collecting the documents for justifying the transport in case of intracommunity supplies – met new requirements?
  • Review ERP system;
  • Focus on the national requirements, in addition to the EU rules.

QF 4: Call-off Stock simplification measures (art. 270^1 , art. 326, art. 324 from the Fiscal Code)

The call-off stock – the supplier transfer their goods into a stock in another EU Member State in advance to ensure fast delivery to clients depending on real time demands, either for production or for sale. For example: a business (A) moves their goods from one EU Member State to a stock in Romania for an intended customer (B) whose identity and VAT ID number are known at the moment of the transport of the goods.

For these structures, simplification measures are available – optional at the level of the EU until 31.12.2019.

Without a simplification measures regime, company A needs to register in both EU Member States, and the following transactions take place:

a) a deemed VAT exempt intra-EU supply of own goods from Member State of departure (A) and an intra-EU acquisition of goods in Member State of arrival (B), which is subject to local VAT.
b) a supply of goods to the client (C) which is subject to local VAT rules. This resulted in an additional VAT registrations and administrative obligations in the Member State where the stock is held.

Through the application of the simplification measures, the intra-EU transfer of own goods to the Member State where the stock is held (point a) above) is disregarded for VAT purposes and therefore no longer a taxable transaction. Instead, the intra-EU supply takes place at a later stage when the customer takes the goods out of the stock (b).

Romania applied similar measures for call-off and consignment stock as from EU Accession but only for transactions with EU Member States applying the same rules.

What’s new?

  • The simplification measures become mandatory for all EU Member States;
  • The transport to be reported in the Recapitulative Statement when the goods are delivered into the stock;
  • The goods should be sold to the client in maxim 12 months;
  • Applicable also for specific cases (missing inventory – goods lost, destroyed or stolen, to a certain limit).


  • Impact on in-place structure.

What’s next?

Order 103/2016 regulating the conditions to apply the VAT exemption for intra-EU supplies, as well as Order 4120/2015 on the approval of the Instructions for the application of simplification measures regarding intra-Community transfers and assimilated intra-Community acquisitions will be amended to complete the Fiscal Code and implement the Regulation and VAT Committee Guidelines And Explanatory Notes.

Useful legislation and links


  • The 1 million lei celling for the restructuring of the outstanding main budgetary obligations at 31 December 2018 is removed.
  • The restructuring of tax obligations also applies for debts covered by guarantees.
  • The deadline for submitting the notification regarding the restructuring intention is extended until March 31, 2020.
  • The deadline for submitting the restructuring request is extended until July 31, 2020.

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