VAT related to electronic services

The National Tax Authorities (ANAF) Order no. 3039/2020 (regarding the amendment and completion of the annex to the Order of the President of the National Agency for Fiscal Administration no. 3737/2016 for approving the Procedure for registration of taxable persons, in order to use one of the special regimes for electronic, telecommunications, broadcasting or television, as well as for the declaration of value-added tax (VAT), according to the provisions of articles 314 and articles 315 of the Fiscal Code, in the situation where Romania is a member state of registration) è was published in the Official Gazette (Part I) no. 684 of July 31, 2020.

The analyzed statutory provision is addressed to the economic operators that perform electronically communicated services, broadcasting, television, and telecommunications services.

When a taxable person performs these types of services to non-taxable persons domiciled in the European Community, additional tax liabilities arise.

Therefore, if the service provider is from outside the European Community, he must register for VAT purposes in a Member State, whatever it may be. This operator will receive an EU VAT code.

When a taxable person provides services of the above category to non-taxable persons from the various Member States, that person must invoice with the VAT rate of the State where the recipient of the service is domiciled.

Thus, he either registers for VAT purposes in all these member states or uses the one-stop-shop Mini One Stop Shop counter where he will submit a special VAT declaration.

We mention that there is an exception, namely if the amount of services does not exceed in the respective calendar year the amount of 10.000 euros, it can be invoiced with the VAT rate from the state of residence of the provider.

In the case of our country, this option can be achieved if the turnover from the current year does not exceed the amount of 46.337 lei, and there is submitted the form 085 – Option regarding the application/termination of the application of the provisions of art. 278 paragraph (5) letter h) of the Fiscal Code.

The recently published document brings some technical changes that will be followed by the taxable person from outside the Community if he registers for VAT purposes in Romania and / or brings technical changes for the Romanian taxable persons who provide such services.

The main changes:

  • The declaration of the taxable person not established in the European Union who opts for the use of the non-EU regime must confirm the fact that the person has not established the headquarters of the economic activity on the territory of the European Union and does not have a fixed headquarters on its territory

 

Before the appearance of this provision, the declaration attests that the person is not registered for VAT purposes in the European Union

For taxable persons registered for VAT purposes in Romania according to the provisions of art. 316 of the Fiscal Code and for which the use of the EU regime was accepted, the information regarding the quality of taxable person using the EU regime is mentioned in the taxpayers’ register.

Old provision: For taxable persons registered for VAT purposes in Romania according to the provisions of art. 316 of the Fiscal Code and for which the use of the EU regime was accepted, is included in the fiscal vector, under the heading “Value added tax”, the quality of taxable person using the EU regime […].

The quality of a taxable person using the EU regime does not cancel the obligations to declare and pay the tax resulting from the quality of taxable person registered for VAT purposes according to art. 316 of the Fiscal Code.

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