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ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

THE VALUE ADDED TAX (VAT)

The Romanian VAT system is modeled on the EU VAT Directive and aims at full harmonization.

TYPES OF VAT:

deductible VAT (4426) applied to acquisitions

collectable VAT (4427) applied to sales

VAT to be recovered (4424) the positive difference between deductible VAT and collectable VAT (fiscal claim)

payable VAT (4423) the positive difference between collectable VAT and deductible VAT (fiscal debt)

unexpired VAT (4428)

The VAT settlement:

at the end of every month

the closure of the VAT accounts 4426 and 4427 in order to determine the amount to be paid/recovered

to/from the state.

Transactions:

I st case: 4426 > 4427

%

4427

4424

II nd case: 4426 < 4427

4427

=

=

4426

%

4426

4423

The payment is done until the 25 th of the next month of each month / quarter. The reimbursement is done only if the taxpayer asks it by marking the corresponding square from the VAT statement.

TAXABLE PERSONS

Any person who independently carries out in any place any economic activity, whatever the purpose or results of that activity. Economic activities - all independently carried out activities of producers, traders and suppliers of services.

Registration of taxable persons for VAT purposes (art. 316 153)

a) prior to performance of economic activities if:

1. they declare that they are to post turnover equal to or more than the exemption ceiling (65.000 eur) for the special exemption scheme for small enterprises;

2. they declare that they are to post turnover less than the exemption ceiling, but opt for the normal tax scheme;

b) if during a calendar year turnover reaches or exceeds the exemption ceiling, within 10 days as of the end of

the month when this ceiling is reached or exceeded;

c) if the turnover obtained during a calendar year is less than the exemption ceiling, but they opt for the

normal tax scheme;

d) if they carry out VAT-exempt transactions and opt for the taxation thereof (renting, concession, letting and

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

leasing of immovable property; the supply of constructions / parts thereof, and of the land on which they stand, as well as of any other land).

The registration may be performed before carrying out any taxable or/and exempt with right of deduction operations.

Registration for value added tax purposes of other persons that perform intra-Community acquisitions or acquisitions for services (Art. 317 153 1 ) When a intra Community acquisition of goods or services is done.

Discussions:

Case of public institutions?

Case of an individual selling real estate property

Cancelation of VAT code

Competent tax authorities shall cancel the registration for VAT purposes of a person, according to this article as follows:

a) if they are declared inactive;

b) if they are under temporary inactivity, registered with the Trade Register;

c) if the tax records of the taxable person’s partners /directors or of the taxable person itself include economic offences and/or the violations;

d) if the person failed to submit in the course of a calendar half year any tax return;

e) if in the tax returns filed for 6 consecutive months in the course of a calendar half year;

f) if, under this title, the taxable person was neither required nor entitled to apply for VAT registration

g) in the case of taxable persons requesting to be removed from the records of persons registered for VAT purposes with a view to applying the special exemption scheme;

h) if the taxable person fails to substantiate its intention and capacity to carry out economic activities in line with relevant criteria and within the deadlines established by ANAF order .

VAT REPRESENTATIVE

Taxable persons established in the Community (but outside Romania) and liable to pay Romanian VAT have to register directly or may appoint a fiscal representative for VAT purposes in Romania. Taxable persons not established in the Community, but liable to pay tax, is required to appoint a tax representative as the person liable to pay tax. If the foreign taxable person does not register for VAT purposes, the VAT liability shifts, in principle, to the Romanian beneficiary of the supply (under the reverse charge mechanism).

TAXABLE OPERATIONS

Transactions subject to VAT refer to:

supply of goods and services

import of goods and

Intra-Community acquisitions of goods

Conditions:

- constitute or are assimilated with a delivery of goods or services;

- place of supply of goods or services is deemed to be in Romania;

- the supply of goods or performance of services is made by a taxable person;

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

- the supply of goods or services from an economic activity.

There are also taxable operations:

- import of goods made in Romania, if the place of the import is Romania;

- intra-community acquisitions, with exceptions;

- any intra-community acquisition of new means of transport;

- any intra-community acquisition of excisable products.

The following intra-community acquisitions are not considered taxable operations in Romania:

- are carried out by a taxable person that performs only supplies of goods or services for which the tax is not input, or by a non-taxable legal person;

- the value of the intra-community acquisitions does not exceed the amount of EUR 10,000.

Even if the above-mentioned conditions are fulfilled, a person has the right to embrace the general taxation regime. The registration must produce its effects at least during the next 2 years. If the limit of 10.000 EUR is over passed, the buyer must register as VAT payer. The registration will produce its effects at least in the current year, as well as in the next one.

Supply of goods

Supply of goods refers to the actual transfer of the right to dispose as owner of the goods from one person to another against payment, directly or through an intermediary. As a rule, a supply of goods has the place of supply where the goods are located at the moment when the delivery takes place, with certain exceptions for goods to be transported, installed, goods to be delivered on board of ships, aircraft, trains and for distance sales, provided certain conditions are met and others. - Internal supply of goods - Intra-Community supply of goods (A Romanian company sells merchandise to a Greek company registered as a VAT payer)

Supply of services

The term ‘services’ applies to all transactions not treated as supply of goods.

The supply of services is taxable in Romania if the place of supply is deemed to be in Romania. The general rule: The place of supply is considered to be:

Business to business (B2B)

Business to customer (B2C)

The place where the beneficiary is established

The place where the supplier is established.

Business - a taxable person or a non-taxable legal person registered for VAT purposes Customer - a non-taxable person

Exceptions from B2B and B2C:

 

Business to business (B2B)

Business to customer (B2C)

Services related to immovable property

The place where immovable property is located

The place where immovable property is located.

Transport of passengers

The

place

of

transport,

The

place

of

transport,

depending

on

the

distances

depending

on

the

distances

covered

covered

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

Restaurant

and

catering

The place of actual supply

 

The place of actual supply

 

services

   

Restaurant and

catering

The

place

of

departure

for

The

place

of

departure

for

services physically carried out

passenger transportation

passenger transportation

on board ships, aircraft or trains during the leg of a passenger transport operation carried out within the Community

   

Short-term rental of means of transport

The place where the means of transport is actually made available to the customer

The place where the means of transport is actually made available to the customer

 

Business to business (B2B)

Business to customer (B2C)

 

Services rendered by an intermediary acting in the name and on behalf of another person

Beneficiary

The place where the underlying transaction is carried out

goods transport services other than intra-Community transport of goods

Beneficiary

the

place

of

transport,

depending

on

the

distances

covered

 

intra-Community

transport

of

Beneficiary

the place of departure

 

goods

 

Intangible services (1)

 

Beneficiary

the

place

where

the

 

beneficiary’s their business or

their permanent

address

is

located or where they usually reside

Telecommunication services;

 

Beneficiary

the place where the beneficiary is established

Radio and television services;

Services

provided

 

electronically (2)

(1) Services such as:

rental of movable tangible property, with the exception of transport means;

leasing transactions of movable tangible property, with the exception of all transport means;

transfers and/or assignments of copyrights, patents, licences, trademarks and similar rights;

advertising services;

services of consultants, engineers, legal advisors and lawyers, accountants and chartered accountants, consultancy bureaus and other similar services, as well as data processing and the supplying of information;

banking, financial and insurance transactions including reinsurance, with the exception of the rental of safe deposit boxes;

the supply of staff;

the provision of access to a gas system within the Community or a network connected to such system, to power networks or heating or cooling networks, transport and distribution through such systems or networks,

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

and the provision of other directly linked services

(2) Special scheme (art. 314 and 315 152 4 and 152 5 ):

scheme (art. 314 and 315 152 4 and 152 5 ):  for non-established in UE

for non-established in UE taxable persons supplying electronic services to non-taxable persons - for all

electronic, telecommunications, broadcasting services supplied to non-taxable persons who are established, have the domicile or regular residence in the European Union.

for electronic, telecommunications, broadcasting services supplied by taxable persons not established in the European Union, but established in other Member State than the Member State of consumption

the taxpayer receives a special VAT registration number

must submit, by electronic means, to the competent tax authorities a special value added tax return within 20 days the total tax due collected from each Member State of consumption where the tax is chargeable;

The special value added tax return shall be prepared in EUR;

shall pay the total amount of the tax due in the European Union in a special bank account denominated in EUR;

may not exercise the right to deduction via the special return.

Import of goods

Goods brought from outside the Community and introduced into EU territory in Romania are considered to be imports and to fall within the scope of VAT with certain exceptions (i.e., entry of goods under a qualifying

customs duty suspension procedure).

Export of goods Goods sold outside the Community (A Romanian company sells merchandise to a Turkish client)

Intra-Community acquisition of goods

Intra-Community acquisition of goods means acquisition of the right to dispose as owner of movable tangible property dispatched or transported to the destination indicated by or on behalf of the purchaser or the

supplier to Romania from another EU member state from which the goods are dispatched or transported.

‘Reverse-charge’ VAT

In case of taxable intra-Community acquisitions, certain acquisitions of goods/services and imports (if the postponement certificate is obtained by the taxable persons registered for VAT purposes performing such operations), for which the ‘place of supply’ is deemed to be in Romania The beneficiaries have to recognize the related collectible VAT in their return of the respective month. The deductible VAT can, as a general rule, be recovered in the same VAT return to the extent of the beneficiary’s right to deduct VAT.

SIMPLIFIED RECORDING OF VAT

- for certain supplies (e.g., cereal and technical plants, waste and scrap materials, wooden material, transfer of greenhouse gas emissions certificates, supply of electric energy to a taxable trader etc.), a simplified VAT mechanism is applicable

- both the seller and the purchaser are registered as VAT payers

- the purchaser has to simultaneously recognize the related VAT both as a collectible and deductible VAT in the return of the respective month, without any cash flow implications (provided the purchaser has a full right to deduct VAT).

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

TAXABLE BASE

VAT is assessed on the total amount received or to be received by the supplier, as consideration for the supply of goods or services, including taxes, commissions, packaging, transport and insurance expenses. The tax base tax shall not include the following:

- rebates, refunds, discounts, reversals and other price reductions that are granted by suppliers directly to customers on tax chargeability;

- amounts accounting for damages, established by final and irrevocable court rulings, penalties and any other amounts requested for the total or partial non-fulfillment of contractual obligations, if the amounts are levied over the negotiated prices and/or tariffstax base;

- interest applied after supply date for late payments;

- the value of packaging that circulates between suppliers and customers, by exchange, without invoicing etc.

The tax base shall be reduced in case of:

- full or partial rescindment of the contract for the supply of goods or services, prior to the supply, but for which advance invoices were issued;

- total or partial refusals as regards the quantity, quality or prices of goods or services supplied, as well as in case of the partial or full cancellation of the contract for the supply;

- rebates, refunds, discounts, reversals and other price reductions granted after the supply of goods or services;

- returned packaging in which the goods are dispatched, for packaging that circulates based on invoicing etc.

TAX RATES

20% standard rate, which is applicable to supplies of goods and services not subject to VAT exemptions or to the reduced rate (A company transports the books produced in its printing house);

9% reduced rate, which is applicable to the supplies of certain goods/services specifically enumerated in the Fiscal Code, such as sale of medicines, hotel accommodation;

5% reduced rate shall be levied to the tax base for supply of social houses, including of the land below, books, tickets for museums, cinemas and others. (A company sells the books produced in its printing house).

THE CHARGEABLE EVENT AND THE CHARGEABILITY

The chargeable event - at the date of the delivery of goods or providing the services. The chargeability appears when the chargeable event takes place. Exceptions:

- on invoice issue, prior to the occurrence of the chargeable event;

- upon collection of the upfront payment, for advance payments made prior to the occurrence of the chargeable event

- VAT cash system

The chargeability for the intra-community supplies VAT exempt and for intra-community acquisitions appears when the invoice is issued for the whole value of the goods, but not more than the 15 th day of the next month to the one when the chargeable event appeared. The chargeability for the import of goods appears when the custom taxes are computed, or, if they are exempt, at the date when they should be taxed. In the case of special customs regimes, the chargeability appears when they stop being places in such regimes.

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

Member state

Romania

Intra-community supply -VAT exempt Delivery date: 29/06/2016 Invoice date: 20/07/2016 Chargeable event : 29/06/2016 Chargeability date: 15/07/16 The supply is included in the recapitulative statement for the 3rd quarter of 2016.

Intra-community acquisition - taxable Acquisition date IC: 29/06/2016

Chargeable event : 29/06/2016 Chargeability date: 15/07/16 The acquisition is included in the recapitulative statement for the 3rd quarter of 2016.

Member state

Romania

Intra-community supply -VAT exempt Delivery date: 29/06/2016 Invoice date: 29/06/2016 Chargeable event : 29/06/2016 Chargeability date: 29/06/2016 The supply is included in the recapitulative statement for the 2nd quarter of 2016.

Intra-community acquisition - taxable Acquisition date: 29/06/2016

Chargeable event: 29/06/2016 Chargeability date: 29/06/2016 The acquisition is included in the recapitulative statement for the 2nd quarter of 2016.

THE VAT CASH-IN SYSTEM (OPTIONAL)

In the case of:

taxable persons

established for VAT purposes in Romania (according to art. 316 153)

having the seat of business in Romania

turnover in the previous calendar year does not exceed Lei 2,250,000

Rule:

The VAT cash-in system is applied as of the first day of the second tax period of the year following that for which the option was made. Exception:

-the taxable person is automatically registered with the Register of taxable persons applying the VAT cash-in system and who applies the system as of the date recorded in the decision for registration

The right to deduct VAT

Supplier

Beneficiary (Client)

Chargeability

applies the system

applies the system

at invoice payment

doesn’t apply the system

applies the system

at invoice payment

applies the system

doesn’t apply the system

at invoice payment

doesn’t apply the system

doesn’t apply the system

at invoice date

VAT collection

Supplier

Beneficiary (Client)

Chargeability

applies the system

applies the system

at invoice encashment

doesn’t apply the system

applies the system

at invoice date

applies the system

doesn’t apply the system

at invoice encashment

doesn’t apply the system

doesn’t apply the system

at invoice date

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

Beneficiary (Client)

Supplier

Acquisition

Sale

301

= 401

4111

= 701

4428

4428

Payment of supplier

Encashment date

401=5121

5121

= 4111

4426 = 4428

4428

=4427

EXEMPT OPERATIONS

Supplies within the scope of VAT are classified as taxable operations and exempt operations. Exempt operations are divided as follows:

exempt supplies with credit for VAT deductible: intra-Community supplies of goods under certain conditions, exports and other similar supplies, international transportation, as well as specific exemptions related to international traffic of goods;

exempt supplies without credit for VAT deductible: healthcare services, educational services, financial and banking services, supply of immovable property, except for new building, lease and renting of immovable property with certain exceptions;

exemption for import and intra-Community acquisitions of goods whose local supplies are exempted.

The following transactions are VAT exempt with credit for VAT deductible:

- supply of goods placed under a bonded warehouse customs procedure;

- goods introduced in free trade zones;

- goods under an inward processing procedure etc.

CREDIT FOR VAT DEDUCTIBLE (INPUT VAT)

General rule Carrying out taxable supplies allows offsetting VAT collectable (output VAT) against VAT deductible (input VAT). Exempt supplies do not allow the recovery of VAT deductible, except in the case of VAT exempt supplies with credit, for which VAT deductible can be recovered. Companies performing a combination of taxable and exempt supplies generally have the right to recover the VAT deductible on a pro rata basis.

VAT pro rata = (Taxable supplies + Exempt supplies with credit for deductible tax) * 100 / Total supplies

The VAT deductible not recovered would generally represent a cost.

Pro rata temporarily applicable for a year is either the final pro rata determined for the previous year or the pro rata estimated based on the transactions forecasted to be carried out during the current calendar year in case of taxable persons whose ratio of transactions entitling to VAT deduction of all transactions changes in the current year compared to the previous one. The final pro rata shall be determined on an annual basis. The final pro rata shall be determined as a percentage and shall be rounded off to the units immediately thereafter. A document showing the computation method of the final pro rata shall be attached to the VAT return.

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

REFUND OF VAT

If the deductible VAT exceeds the collectible VAT, the recoverable balance VAT (defined as ‘negative VAT balance’) can be:

carried forward to the next period; or

refunded by the tax authorities, based on the option expressed by the taxpayer in the VAT return.

The option can be exercised only for a negative VAT balance exceeding 5,000 lei.

A taxable person established in the Community that is not registered or liable to register for VAT purposes in

Romania may request a refund of VAT paid.

A

taxable person not established in the Community that is not registered or liable to register for VAT purposes

in

Romania may request the refund of the VAT paid if, under the laws of its country of establishment, a taxable

person established in Romania has the same right in that country.

ADJUSTMENT OF INPUT VALUE ADDED TAX

in case of acquisitions of services and goods, other than capital goods

tax in case of capital goods

tax in case of capital goods

Capital goods:

- all fixed tangible assets, as well as the construction, transformation or modernization of immovable goods

- assets subject to rental, leasing, concession Where self-supply rules do not apply, the tax deducted for capital goods shall be adjusted:

Cases

Period

capital goods

5-year

acquisition, construction, transformation or modernization of an immovable property, if the transformation or modernization amounts to at least 20% of the aggregate amount of the construction thus transformed or modernized

20 years

tax in case of capital goods

Capital goods:

- all fixed tangible assets, as well as the construction, transformation or modernization of immovable goods

- assets subject to rental, leasing, concession Where self-supply rules do not apply, the tax deducted for capital goods shall be adjusted:

Cases

Period

capital goods

5-year

acquisition, construction, transformation or modernization of an immovable property, if the transformation or modernization amounts to at least 20% of the aggregate amount of the construction thus transformed or modernized

20 years

INVOICING

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

The Romanian authorities will accept documents or messages, both electronic and hard copy versions, if these meet the requirements provided by Romanian Fiscal Code in respect of form and content of invoices. Moreover, any document that specifically and without any ambiguities modifies or refers to an initial invoice will be considered as invoice. Taxable persons supplying goods or services with certain exceptions should issue invoices by the 15th of the month following the one in which the chargeable event occurs unless the invoice has already been issued.

 

Intra-Community supply Supplier (RO)

 

Intra-Community acquisition Client (FR)

1.

The supplier is a VAT payer: exempt operation

1.

The client is a VAT payer: reverse charge

Company A from Romania sells to company B from France merchandise of 5.000 EUR.

 

Client (B) communicates the VAT code to A.

Sale 4111B = 707 5.000 EUR

Acquisition

 

371

=

401A 5.000

4426

= 4427 5.000 * VAT quota from the buyer’s

state 19,5 %

 

2.

The supplier is a VAT payer:

2.

The client is not a VAT payer, taxable person, and

It issues the invoice with VAT from Romania (20%).

its total acquisitions are less than 10.000 EUR:

Pays VAT from the state of the supplier.

4111B = 707 5.000 EUR

 

4427

5.000 * 20%

371

= 401A 5.000 +5.000 * 20%

3.

The supplier is a VAT payer: exempt operation

3.

The client is not a VAT payer, taxable person, and

 

its total acquisitions are more than 10.000 EUR:

4111B = 707 5.000 EUR

It registers as VAT payer according to art. 317 153 1 and pays through the special statement.

371

=

401A 5.000 EUR

371

= 4423

5.000 * 19,5%

4.

The supplier is a VAT payer and has distance sales

4.a. The client is not a taxable person, it doesn’t transmit its VAT code and its total acquisitions are less than 10.000 EUR:

less than 35.000 EUR*:

It invoices with VAT from its state.

It receives the invoice with Romanian VAT

4111B = 707 5.000 4427 20% The intra-community supply is not exempt of VAT. It will invoice with VAT from the state where the transport of goods starts.

371

= 401A 5.000 +5.000 * 20%

*The limit for the distance sales differs between the member states. It ranges between 35.000- 100.000 EUR. It is computed for each member state, depending of the value

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

of all sales to that state.

 
 

4.b. The client is not a taxable person, but Its total acquisitions are more than 10.000 EUR (the limit set by France) or it chose to be registered as VAT payer in France for intra-community acquisitions according to art. 317 153 1 . It transmits its VAT code to the supplier:

The supplier has an exempt intra-community supply, because the customer transmits its VAT code from France.

It realizes a taxable intra-community acquisition in

France

and

pays

the

VAT through the special

statement

 
 

371

=

401A 5.000 EUR

 

4111B = 707 5.000 EUR

371

= 4423

5.000 * 19,5%

5.

The supplier is a VAT payer and has distance sales

5.a. The client is not a VAT payer, taxable person, and its total acquisitions are less than 10.000 EUR:

more than 35.000 EUR*:

It registers in the destination member state and ha a local supply in France.

Transfer Local supply Place of transfer: France (place where the transport is ended)

It has no deduction right.

 

371

= 401A 5.000 + 5.000 * 19,5%

(Pays VAT to the supplier)

 

4111B = 707 40.000 4427 40.000 * 19,5%

 

The supplier doesn’t have to register as a VAT payer in France

5.b. The client is not a taxable person, but its total acquisitions are more than 10.000 EUR (the limit set by France) or it chose to be registered as VAT payer in France for intra-community acquisitions according to art. 317 153 1 :

It declares the intra-community acquisition in France and pays the VAT through the special statement.

371

= 401A 5.000

 

4111B = 707 5.000 EUR

371

= 4423

5.000 * 19,5%

THE IMPORT

1. Import of common goods:

- payment of VAT in the customs: 4426 = 5121

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

Example of import followed by a local delivery

A

Romanian company B buys goods worth EUR 15,000 from a Canadian company A. B is normally

registered for VAT purposes puts the goods in free circulation and acts as the importer in terms of VAT. The goods will be resold to a Romanian company C at the price of EUR 20,000. A transports the goods from Canada directly to C.

I. Import The taxable person is B, the importer. The transaction is taxable - import of goods The place of import - Romania, where the goods are when they are introduced in the Community There is no exempt. The person obliged to pay VAT is the importer B.

371 = 401A 15.000 EUR

 

4426 = 5121

3.000 EUR (20%)

II. The local delivery The taxable person is B. The transaction is taxable supply of goods The place of supply is Romania, the member state where the import takes place.

There is no exempt. The person obliged to pay VAT is the B, who has a local delivery with Romanian VAT.

4111C = 707 20.000 4427 4.000 (20% * 20.000)

2.

Import of goods in customs suspension *

During the suspension preservation: exempt At the exit from customs suspension: taxable

3.

Import followed by an intra-community supply

- exempt

Example:

A

Romanian company B buys goods worth EUR 15,000 from a Canadian company A. B is normally

registered for VAT purposes puts the goods in free circulation and acts as the importer in terms of VAT. The goods will be resold to a Greek company C that communicates its VAT code, at the price of EUR 20,000. Company A transports the goods from Canada directly to C.

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

I. Import The taxable person is B, the importer The transaction is taxable - import of goods The place of import - Romania, where the goods are when they are introduced in the Community It is an exempt transaction, because it follows an intra-community supply VAT exempted. At the import date, the importer must prove that there will be an ulterior intra-community supply (for example the proof of transport and the VAT code of the final recipient). The person obliged to pay VAT it is not the case (the Greek company will pay)

371 = 401A 15.000 EUR

II. The ulterior delivery The taxable person is B.

The transaction is taxable intra-community supply

The place of supply is Romania, the member state where the import takes place, instead of the place where the transport starts. There is exemption if the 2 conditions are fulfilled: the transport prove and the VAT code of the buyer.

B

is not obliged to pay the VAT. The transaction must be included in the statement for the exempt intra-

community supplies.

4111C = 707 20.000

The VAT is applied to the acquisition cost (from the external value), the supplementary costs (commissions, packing, transport, insurance), taxes, commissions and duties owed outside Romania, as well as those related

to

the import.

The payment of VAT is the importer’s obligation. The VAT is paid in customs, based on DVI.

TRANSFER / NON TRANSFER

A

România

A

Italy

Transfer: the movement of goods from A from RO to A in IT for immediate delivery.

Non-transfer: the movement of goods from A from RO to A in IT for their storage for an undetermined period

in order to be sold.

Example: A Romanian company sends construction materials and equipment for building a construction in Italy.

The movement of the materials is a transfer, because they are going to be consumed and invoiced (are included

in the cost of the work) locally in the other state.

The transfer is self-invoiced.

The movement of the equipment is a non-transfer, because it will return in Romania. If it would be sold in Italy,

at the sale date the non-transfer would turn to transfer followed by a local delivery.

ADVANCED ACCOUNTING AND BUSINESS TAXATION PhD Associate Professor ADRIANA FLORINA POPA

Non-transfer: the movement of goods in order to be repaired.

PAYMENT AND FILING REQUIREMENTS

Taxpayers must complete a VAT return (300) with the tax authorities and pay VAT on a monthly basis, specifying the taxable amount and the tax due.

In case of taxpayers whose annual turnover is less than EUR 100,000, the VAT return (300) should be filed with the tax authorities on a quarterly basis. The tax return must be filed and the respective VAT paid by the 25 th of the following month.

Taxpayers registered for value added tax purposes according to art. 317 153 1 - VAT return (301).

A VAT recapitulative return (390) should be filed with the tax authorities on a quarterly basis. Such returns should comprise the following information: total amount of intra-Community supplies exempt from VAT, total amount of intra-Community acquisitions for which the beneficiary is obliged to pay VAT, and operations within the triangulation scheme.

Taxable persons registered for VAT purposes in Romania should submit a VAT return (394) including all supplies/acquisitions of goods/services taking place in Romania - all invoices (including invoices for advance payments) issued during the reporting period for taxable supplies subject to standard or reduced VAT rate and should be submitted on the same basis as VAT return 300;

Companies registered for VAT purposes in Romania, having deliveries of goods to/arrivals of goods from other EU member states which exceed an annual amount of RON 900,000/RON 500,000 are obliged to submit INTRASTAT declarations on a monthly basis.

Register of intra-Community trade operators - all taxable persons and non-taxable legal persons that carry out intra-Community transactions, namely:

- intra-Community supplies of goods having the place in Romania

- subsequent supplies of goods carried out under a triangular transaction

- intra-Community supplies of services

- intra-Community acquisitions of taxable goods having the place in Romania

- intra-Community acquisitions of services

Persons registered for VAT purposes according to art. 316 and 317 153 and 153 1 shall apply for entry in the Register of intra-Community trade operators if they intend to perform one or more intra-Community transactions, before the starting them.

more intra-Community transactions, before the starting them. Useful links  www.anaf.ro  VAT Information

Useful links

www.anaf.ro

VAT Information Exchange System - V.I.E.S.

Sistemul M1SS