Situation: An ABC SRL company performs international freight transport for various countries it transits (for example, Austria), pays tolls. These taxes are paid to an intermediary, company Y in Romania, based on a payment notice. The invoice related to the payment notification is from the Austrian company, with a valid VAT code. The invoice includes Austrian VAT. What is the tax treatment and the declarative regime of this invoice?
Solution:
For the beginning we mention that the toll is a service related to real estate (the road is a real estate).
Therefore, the place of supply from the point of view of VAT is the place where the real estate is located and the services are taxable in Bulgaria.
Thus, the use of an infrastructure for which taxes are levied constitutes, from the VAT point of view, a service related to a real estate (the respective road) for which the place of supply is considered to be the place where the real estate is located – infrastructure, according to article 278 paragraph (4) letter a) of the Fiscal Code and the methodological norms of application.
In view of the above, these services do not represent intra-community services and are not declared in Form 390.
As a taxable person registered for VAT purposes, the Romanian company cannot exercise the right to deduct the amount of VAT entered in the invoice of the Austrian supplier.
Tolls paid in other states are not taxable in Romania in terms of VAT.
These taxes are declared in the VAT Return at Line 30, “Acquisitions of goods and services exempt from tax or non-taxable” and are not declared in Form 390, with the symbol S, aspect regulated in point 16 paragraph (1) of the application norms of Article 278 (4):
- (1) By way of exception to the general rules provided for in Article 278 (2) and (3) of the Fiscal Code, regardless of the status of the beneficiary, respectively the taxable person or the non-taxable person, the place of supply of services referred to in Article 278 (4) of the Fiscal Code is established according to the rules provided in paragraph (4) of article 278 of the Fiscal Code.
These services are not declared in the recapitulative statement mentioned in article 325 of the Fiscal Code, regardless of the status of the beneficiary, nor do the provisions regarding the registration for tax purposes, which are specific to intra-community services and acquisitions of services, apply. “
Therefore, the seller correctly issued the VAT invoice from Austria, applying the 20% quota because the use of a road is a service directly related to the road infrastructure treated as real estate, in Romania being applicable the exception to the general taxation rule from the article 278 paragraph (4) letter a) of the Fiscal Code.
These provisions are completed with those from point paragraph (2) letter. a) and paragraph (3) letter j) of the rules for the application of this article:
“(2) The services related to real estate provided for in Article 278 paragraph (4) letter a) of the Fiscal Code include only those services that have a sufficiently direct connection with the real estate in question.
The services are considered to have a sufficiently direct connection with the real estate in the following cases:
- a) are derived from a real estate, and the respective real estate is a constitutive element of the service and is central and essential for the services provided; ….
(3) The provisions of paragraph (2) shall apply in particular for the following: ..j) the assignment or transfer of rights, other than those referred to in letter. h) and i), related to the use of an entire immovable property or parts thereof, including the authorization to use part of a property, such as .. the use of an infrastructure for which taxes are levied, such as a bridge or a tunnel; “
Legal basis:
– Fiscal Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), with subsequent amendments and completions;
– Fiscal Procedure Code (approved by Law no. 207/2015, published in the Official Gazette no. 547 of 23.07.2015), with subsequent amendments and completions;
– Methodological Norms for the application of the Fiscal Code (approved by HG no. 1/2016).