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Online sales to PF customers in Austria (case)

Situation: A Romanian company (X) that has created an online store intends to sell products to individuals in Austria.

What is the VAT treatment for these remote deliveries?

 

Solution: We remind you that, according to the amendments to the Fiscal Code of Emergency Ordinance no. 59/2021, starting with July 1, 2021, sales of goods to taxable or non-taxable persons from EU member states who cannot provide a valid VAT code such as: persons natural persons, legal entities not registered for VAT purposes, associations and foundations that do not carry out economic activities, public institutions are defined as intra-community sales of distance goods.

 

The place of delivery of these goods is defined in article 275 paragraph (2) of the Fiscal Code as the place where the goods are at the moment when the shipment or transport of the goods ends.

 

Therefore, as a general rule, these intra-community deliveries of goods at a distance are taxable from the point of view of VAT in the Member State of consumption: the Member State where the shipment or transport of the goods to the customer ends and not in Romania.

 

We mention that depending on the total value without VAT of the intra-community sales of distance goods, there are 2 situations:

 

  • Sales value in the current year below the ceiling of 10,000 euros (equivalent to 46,337 lei) and company X is established only in Romania.

 

In this case, the above general rule does not apply, thus the sales of goods are taxable from the VAT point of view in Romania, as provided in article 2781 of the Fiscal Code:

 

“Article 278 1 – Threshold for taxable persons carrying out the operations referred to in Article 275 (2) and Article 278 (5) (h)

 

(1) The provisions of Article 275 (2) and Article 278 (5) (h) shall not apply if the following conditions are cumulatively met:

  1. a) the supplier or provider is established or, if not established, has his permanent residence or habitual residence in a single Member State;
  2. b) services are provided to non-taxable persons who are established, have their permanent residence or habitual residence in any Member State other than the Member State referred to in point (a), or goods are dispatched or transported to a Member State other than the Member State point a); and
  3. c) the total value, without VAT, of the operations provided in letter b) does not exceed, in the current calendar year, 10,000 euros or the equivalent of this amount in national currency, nor did it exceed this amount during the previous calendar year.
  4. Where, during a calendar year, the threshold provided for in paragraph 1 (c) is exceeded, the provisions of Article 275 (2) and Article 278 (5) (h) shall apply from the moment the threshold is exceeded.

(…)

 

  1. The equivalent amount in the national currency of the Member States of the amount referred to in paragraph 1 (c) shall be calculated by applying the exchange rate published by the European Central Bank. For Romania, the equivalent value in national currency is 46,337 lei.

Therefore, until reaching the ceiling of 10,000 euros, company X issues invoices to individuals in Austria applying the VAT rate in Romania and of course in compliance with the mandatory elements of an invoice mentioned in Article 319 paragraph (20) of the Fiscal Code.

One of the mandatory elements is the amount of VAT collected expressed in lei.

Also, article 319 paragraph (23) stipulates that invoices can be issued in any currency, but the amount of VAT collected must also be displayed in lei.

 

“(23) The amounts indicated on the invoice may be expressed in any currency provided that the value of VAT collected or to be regularized is expressed in lei. If the amount of tax collected is expressed in another currency, it will be converted into lei using the exchange rate provided for in Article 290. (Article 319 paragraph 23 of the Fiscal Code) “

 

According to point 35. (1) of the Norms, within the meaning of article 290 paragraph (2) of the Fiscal Code, the last exchange rate communicated by the National Bank of Romania means the exchange rate communicated by the respective bank on the previous day and which is valid for the operations that will take place the next day.

 

Thus, given that the company issues invoices in euros, the value of VAT must also be expressed in lei.

 

  • After exceeding the ceiling of 10,000 euros, company X has two options:

– to register for VAT purposes in Austria; In this case, prepare the invoices according to the Austrian tax rules, submit the VAT return and pay the VAT to the Austrian authorities.

– to apply the special EU regime provided in article 315 of the Fiscal Code, by electronic registration in the OSS system (directly on the page www.anaf.ro)

 

(2) Where, during a calendar year, the threshold provided for in paragraph 1 (c) is exceeded, the provisions of Article 275 (2) and Article 278 (5) (h) shall apply from the moment the threshold is exceeded. (Article 278 1 paragraph 2 of the Fiscal Code)

 

It is important to emphasize that the OSS One-Stop Shop is not a mandatory regime but is a simplification measure by which the declaration and payment of VAT due in other EU countries is made in Romania compared to registration, declaration and payment of VAT in each of the countries where deliveries of goods to non-taxable persons.

For registration in OSS, company X uses the VAT code assigned under Article 316 for normal registration for VAT purposes, therefore there will be a single tax code.

Following the registration in the OSS system, the company will invoice and declare from this VAT code all the deliveries of intra-community goods at a distance to non-taxable persons from the EU.

The invoices are drawn up applying VAT from Austria, with the display on the invoice and the value of VAT in lei and having the obligatory elements from the Romanian Fiscal Code, company X being registered in the OSS system in Romania.

 

“Article 319 Invoicing

  1. Without prejudice to the provisions of paragraphs 31 to 35, the following invoicing rules shall apply:
  2. a) For deliveries of goods and services for which the place of delivery or supply is not considered to be in Romania, according to the provisions of articles 275 and 278, invoicing is subject to the rules applicable in the Member States where the supply of goods / services takes place

………………………………………………………………..

  1. d) with the exception of the provisions of letter a), invoicing shall be subject to the rules applicable in the Member State in which the supplier / provider using one of the special arrangements provided for in Articles 314, 315 and 315 2 is registered. “

 

The special VAT Declaration D398 is submitted quarterly, drawn up in euro even if the deliveries of goods are paid in another currency. The declaration will detail the tax base and VAT due in each Member State of consumption.

The declaration is submitted regardless of whether or not deliveries of goods have been made. We mention that the intelligent PDF of D398 was published on the ANAF website, on 28.07.2021.

The VAT due in other member states is paid in Romania, in an account indicated by the fiscal authority, subsequently the amounts being transferred to the Member State of consumption.

 

 

Legal basis:

 – www.anaf.ro

– Fiscal Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), with subsequent amendments and completions;

– Methodological Norms for the application of the Fiscal Code (approved by Government Decision no. 1/2016);

– Emergency Ordinance 59/2021 for amending and supplementing Law no. 227/2015 regarding the Fiscal Code.