Instructions for applying VAT exemptions – Amendments

In the Official Gazette with number 628 of July 17, 2020, the MFP ORDER no. 2148 of July 14, 2020 regarding the modification and completion of the Instructions for applying the value added tax exemption for the operations provided in art. 294 par. (1) lett. a) -i), art. 294 para. (2) and art. 296 of Law no. 227/2015 on the Fiscal Code, approved by Order of the Minister of Public Finance no. 103/2016.

The presentation of the documents for the justification of the tax exemption will be made within a maximum of 150 calendar days from the date on which the tax generating fact for the operation in question occurred.

The tax exemption provided in art. 294 para. (1) lett. a) of the Fiscal Code is justified by the exporter with the following documents:

  • the invoice, which must contain the information provided at art. 319 para. (20) of

the Fiscal Code

  • one of the following documents:
  1. the certification of the conclusion of the export operation by the customs office of

       export or, as the case may be, the export notification certified by the customs office

       of export, in the case of the electronic customs declaration of export; or

  1. exemplary 3 of the single administrative document, used as an export declaration

       on paper, certified on the back by the customs office of exit; or

  1. in the case of excise goods moved under excise duty suspension using EMCS,

       the export report submitted to the consignor certifying that the excise goods have

       left EU territory. “

If the supplier is not established in the European Union and cannot be an exporter from a customs point of view, in order to justify the VAT exemption it is necessary for him to hold the export customs declaration, in which his identification data and series and / or or the invoice number issued by him for the delivery of the goods transported outside the European Union to be mentioned in checkbox 44.

If the exit of the goods from the territory of the European Union cannot be justified with the documents provided in paragraph (2) letter b), the exporter can prove the effective exit of the goods from the territory of the European Union by other means of proof, as the Court of Justice of the European Union has decided in Case C-275/18 «Milan Vins». “

The exemption from value added tax (VAT) provided at paragraph (1) is justified by the supplier who makes the delivery according to art. 2 para. (2) – (5).

There are exempt from the tax, according to the provisions of art. 294 para. (1) lett. c) of the Fiscal Code, the provision of services, including transport and ancillary transport services, other than those exempted according to art. 292 of the Fiscal Code, directly related to the export of goods. Directly related to the export of goods are services which contribute to the actual performance of an export operation and which are provided directly to the exporter or consignee of the exported goods, as ruled by the Court of Justice of the European Union in Case C-288/16 “L.C.” IK. “

There are exempted from the tax, according to the provisions of art. 294 para. (1) letter e) of the Fiscal Code, the provision of services performed in Romania on movable goods purchased or imported for processing in Romania and which are subsequently transported outside the European Union by the service provider or by the client, if he is not established in Romania, or by another person on behalf of any of them. The exemption from value added tax (VAT) provided at art. 294 para. (1) letter e) of the Fiscal Code applies to the provision of processing services and if the service provider performing these services based on a contract concluded with a client not established in Romania purchases or imports goods for incorporation into the processed product or for use in direct connection with processed products. The tax exemption provided at art. 294 para. (1) letter e) of the Fiscal Code applies to the provision of services for which the place of supply is considered in Romania, according to the provisions of art. 278 of the Fiscal Code, and is justified according to the provisions of par. (3). Any goods incorporated in the processed product, packaging or other goods used in direct connection with the processed product are accessories to the services performed and will not be treated as deliveries of goods, but as part of the service provided.

In the case of goods imported into Romania for processing, the quality of importer may have, according to Title VII of the Methodological Norms for the application of Law no. 227/2015 on the Fiscal Code, approved by Government Decision no. 1/2016, with the subsequent amendments and completions, either the owner of the goods or the taxable person registered according to art. 316 of the Fiscal Code, which imports goods in Romania for processing, provided that the goods resulting from these operations are transported outside the European Union or are purchased by the respective taxable person. If the goods resulting from the processing are not transported outside the European Union, the service provider that imported the goods in Romania for processing loses the right to deduct the value added tax (VAT) related to the import, unless it acquires the goods resulting in following the processing or re-invoicing the value of the imported goods for processing and the value added tax related to the owner of the goods, in which case the re-invoicing of the entire value of the goods is considered only for the purpose of value added tax, not implying a commercial transaction. In the situation where the place of performance is considered to be in Romania according to the provisions of art. 278 of the Fiscal Code, if the goods resulting from the processing are not transported outside the European Union, the provision of processing services is not exempt from value added tax. If the services are provided to a taxable person, established in another Member State, the place of supply is considered in the Member State where the beneficiary is established according to art. 278 para. (2) of the Fiscal Code and under the conditions established by the norms of application of this article, the services being non-taxable in Romania. However, the provider does not have the obligation to submit the recapitulative statement provided in art. 325 of the Fiscal Code, if the provision of services is exempt from VAT in the beneficiary’s state.