teaha2020

LIC EXW – supporting documents for the application of the exemption regime (case)

Situation: A company from RO (A SRL) delivers goods to a company from Italy (B), based on the fiscal invoice and a valid VAT code of the buyer. In the case of transport, the delivery condition is generally EXW or FCA (transport insured / paid by the Customer, costs and risks are transferred to the buyer once the goods are delivered to the carrier hired by the customer). What are the necessary documents to justify the VAT exemption?

 

Solution: In the situation where the intra-community delivery is made under the condition of EXW delivery, upon invoicing, company A applies the exemption regime with the right of deduction, only if it proves that the following three cumulative conditions are met:

  • receives from B from Italy a valid VAT code in the VIES system, condition imposed by article 294 paragraph (2) letter a):

“(2) The following are also exempt from tax:

  • intra-Community supplies of goods to a taxable person or to a non-taxable legal person acting as such in a Member State other than that in which the dispatch or transport of goods begins, which communicates to the supplier a valid VAT registration code assigned by the tax authorities, from another Member State … “

justify the exemption with the documents regulated by Article 10 paragraph. (1) of the ORDER OF THE MINISTRY OF PUBLIC FINANCE (O.M.F.P.) no. 103/2016 amended by the ORDER OF THE MINISTRY OF PUBLIC FINANCE (O.M.F.P.) no. 2148/2020:

– invoice; – the transport document, for example, the CMR sent in copy by the buyer, if he contracts the transport of the goods with a specialized company, without carrying out the transport with his own means. Article 6 of Decree 451/1972 of November 20, 1972 on the accession of the Socialist Republic of Romania to the Convention on the Contract for the International CMR Consignment Note (CMR) in the CMR must contain at least the following information:

“1. The consignment note must contain the following information:

  1. the place and date of its elaboration;
  2. the name and address of the sender;
  3. the name and address of the carrier;
  4. the place and date of receipt of the goods and the place provided for their release;
  5. the name and address of the recipient;
  6. the current name of the nature of the goods and the type of packaging, and for dangerous goods, their generally recognized name;
  7. the number of packages, special markings and their numbers;
  8. the gross weight or the quantity thus expressed of the goods;
  9. transport expenses (transport price, ancillary expenses, customs duties and other expenses incurred from the conclusion of the contract until its release);
  10. the necessary instructions for customs and other formalities;
  11. the indication that the carriage is subject to the regime established by this Convention and

            to no other contrary clause.

    ………….”

  • written declaration by which company B confirms the receipt of the goods in Italy.By this declaration, buyer B confirms that the goods invoiced by A were shipped from the territory of Romania to the territory of Italy.The statement must include the following information: date of issue; name and address of buyer B; quantity and nature of goods delivered; date and place of arrival of the goods; if applicable, the identification of the person who accepts the goods on behalf of buyer B. Identification of the person who accepts the goods on behalf of the buyer is necessary only if the goods are accepted by a third party, for example, a customer of buyer B who may be a supermarket, a catering company, a processor, a distributor, etc.

The written declaration of the buyer is sent to supplier A until the 10th of the month following the month in which the intra-community delivery was made.

However, in this context, the provisions of paragraph (9), introduced in article 10 of the ORDER OF THE MINISTRY OF PUBLIC FINANCE (O.M.F.P.) no. 103/2016 “(9) If the buyer does not provide the seller with the written declaration provided for in Article 45a (1) (b) (i) of Regulation 282/2011, until the tenth day of the month following delivery, the supplier shall benefit from the presumption laid down in this Article if he receives this declaration later, within the period provided for in Article 1 (4). “

  • reports the value of the L.I.C. invoiced by the recapitulative statement code 390 VIES with the symbol L, in which case, implicitly, the provisions of paragraph 2 1 of article 294 also apply. compliance with the obligation under Article 325 (1) to submit a recapitulative statement or recapitulative statement submitted by him shall not contain the correct information relating to such delivery, as required under Article 325 (3), unless the supplier may duly justify the deficiency in a manner considered satisfactory by the competent tax authorities. ” The reporting obligation in the VIES system is also provided by the ORDER of the MINISTRY OF PUBLIC FINANCE (O.M.F.P.) no. 103/2016, in article 10 paragraph. (13) “The VAT exemption provided for in Article 294 paragraph (2) letter a) of the Fiscal Code shall not apply if the supplier has not complied with the obligation provided in Article 325 paragraph (1) of the Fiscal Code to submit a recapitulative statement or the recapitulative statement submitted by him does not contain the correct information regarding this delivery, unless the supplier can duly justify the deficiency in a manner considered satisfactory by the competent tax authorities. “

Therefore, the exemption is applied by A and in the condition of Ex-works delivery negotiated by contract, condition according to which the responsibility for the transport of goods is assumed by the intra-community buyer who:

– communicates to the Romanian supplier a valid VAT code issued by the fiscal authority from its member state or from any other member state, but not from Romania;

– confirms by declaration that the goods transported from Romania arrived on the territory of Italy.

It is important to mention that in the absence of a contract, the order that can take the place of the contract is also accepted, if it is followed by its execution. This is regulated by OMFP no. 103/2016 in article 1 of the annex on the exemption instructions, paragraph. (3) point a) “(3) For the purposes of these instructions:

  1. the contract also means the order, followed by its execution; ” So the L.I.C. is performed according to the requirements of EEC Regulation no. 282/2011 for the application of the provisions of the EEC Directive no. 112/2006 on the common system of value added tax, amended by EEC Regulation no. 1912/2018. Thus, by this amendment, “Section 2A Exemptions for intra-Community operations” (concerning Articles 138-142 of Directive 2006/112 / EC) introduced Article 45a with three paragraphs, of which, in the case of transport by the buyer, the provisions of paragraph. (1) letter b) according to which the seller applies the exemption only if he holds the following documents:

– a written declaration from the buyer stating that the goods have been dispatched or transported by him or a third party on behalf of the buyer and mentioning the Member State of destination of the goods.

– at least two non-contradictory proofs referred to in paragraph 3 (a), issued by two different parties independent of each other, as well as by the seller and the buyer, or a single piece of evidence referred to in paragraph (3) point (a) together with a single non-contradictory piece of evidence, referred to in paragraph 3 (b) confirming the shipment or transport, issued by two different parties independent of each other and of the seller and of buyer. Article 45 (3) provides for the following documents accepted as proof of dispatch or transport in a Member State:

  • documents relating to the dispatch or transport of the goods (carried out by an independent carrier), such as, for example, a signed CMR document or a signed consignment note or an invoice for the transport of the goods

 However, in order for this proof to be taken into account by the Romanian supplier, but also by the fiscal inspection bodies, in the event of a fiscal inspection at the Romanian supplier, the carrier must be an independent person from supplier A or buyer B. It is understood that the parties registered in the CMR supporting document are independent, if they are not affiliated persons, according to the provisions of the new paragraph, paragraph 8, introduced by the ORDER of the MINISTRY OF PUBLIC FINANCE (OMFP) no. 2148/2020 by which the provisions of article 10 of the ORDER OF THE MINISTRY OF PUBLIC FINANCE (O.M.F.P.) no. 103/2016 “(8) Independent parties, within the meaning of Article 45a of Regulation 282/2011, means parties that are not considered affiliated according to the provisions of Article 7 point 26 of the Fiscal Code.”

  • written statement by which the buyer:

– to confirm that the respective goods have been shipped or transported by him or by a third party on behalf of the buyer;

– mention the Member State of destination of the goods (Italy).

In conclusion, supplier A from Romania falls within the requirements of paragraph (7) of article 10 of OMFP no.103 / 2016 amended by OMFP no.2148 / 2020 “(7) Article 45a of the Implementing Regulation (EU) no. Council Regulation (EC) No 282/2011 of 15 March 2011 laying down measures for the implementation of Directive 2006/112 / EC on the common system of value added tax, as amended by Implementing Regulation (EU) 2018 / Council Regulation (EC) No 1912 of 4 December 2018 amending Implementing Regulation (EU) No 282/2011 as regards certain exemptions for intra-Community operations, hereinafter referred to as Regulation 282/2011, provides that, in the event that under the conditions of paragraph 1 (a) and (b) of this Article, the goods shall be presumed to have been dispatched or transported from a Member State to a destination outside its territory but within the Community. documents that certifies that the goods were transported from Romania to another Member State are those provided in paragraph. (1) and (3) of Article 45a of Regulation 282/2011. “

In conclusion, in order to benefit from the exemption, supplier A from Romania must comply with the 3 cumulative conditions:

– the existence of a valid VAT code in the VIES system, communicated by the buyer; – justification of the operation with the documents imposed by the ORDER OF THE MINISTRY OF PUBLIC FINANCE (O.M.F.P.) no. 103/2016 Article 10;

– reporting the delivery through the recapitulative statement code 390 VIES with the symbol L.

Legal basis:

– Regulation 282/15-Mar-2011 laying down measures for the implementation of Directive 2006/112 / EC on the common system of value added tax (recast)

– Order MFP 103/2016 on the approval of the Instructions for the application of the value added tax exemption for the operations provided in article 294 paragraph. (1) point (a) -i), Article 294 (1). (2) and article 296 of Law no. 227/2015 regarding the Fiscal Code

– 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).