Situation:
A company ABC SRL buys consumable products for some of its own production equipment. The products come from a Chinese company, but the delivery of the products is done from Sweden, through a courier company. What is the tax treatment of this acquisition in China?
Solution:
Romanian buyer an intra-community acquisition of goods because the goods delivered by the Chinese supplier are put into free circulation on the community territory in Sweden and shipped / transported directly to Romania. Thus, in the situation described, the place of import is in Sweden, without being in Romania. The place of import would have been in Romania only if the goods had been released for free circulation in Romania, thus respecting the rule of article 277 paragraph (1) according to which “The place of import of goods is considered on the territory of the Member State where the goods are located. when it enters European territory. “
In such cases, import simplification measures shall be applied in accordance with procedure 42 or 4200. The operation code 4200 or 42 shall be “the simultaneous release for free circulation of goods which are the subject of a duty-free delivery to another Member State”.
Customs procedure 42 is used by the importer through his customs declarant in order to obtain an exemption from VAT when the imported goods are to be transported to another Member State, the VAT being due in the Member State of destination.
In the case of goods imported from China, which are put into free circulation on the Community territory, the Romanian buyer is obliged to pay VAT.
For this type of import, the customs declaration is made in the Member State where the goods are released for free circulation, for example, in Sweden, but VAT is not paid to customs in Sweden because the import of goods transported from a third country is exempt from VAT. the release for free circulation of goods in a Member State other than the Member State of the buyer only if the intra-Community delivery of the same goods, in the same condition in which they were imported, takes place immediately to the buyer from another Member State, for example from Romania .
Practically, by applying the regime of release for free circulation, the goods shipped from China acquire Community status, in which case the operation no longer represents for the Romanian buyer an import of goods for which VAT is due to customs, but an intra-community acquisition of goods. Customs procedure 42 is a simplified customs procedure applicable only to VAT (does not apply to customs duties, customs duties, etc.) in order not to oblige the importer to register in the Member State where the goods are released for free circulation.
The simplification measures regarding the payment of VAT take into account the fact that:
– the importer from Romania does not owe customs VAT in the Member State in which the import of goods takes place (Sweden), in the sense that the goods are released for free circulation on the territory of the Community, for example, in Sweden under the exemption regime;
– VAT in Romania is due to the general consolidated budget, re-framing the operation from import of goods with place in another member state (exempt in Sweden), in intra-community acquisition of goods taxable in Romania because it has place in Romania.
According to the provisions of Article 276 “Place of intra-Community acquisition of goods”
In other words, VAT is payable in the second Member State (Romania) which represents the Member State of destination of the goods.
The amount of VAT related to goods shipped from China, released for free circulation in the Community, in Sweden, is due by the Romanian buyer who makes an intra-community acquisition of goods taxable in Romania by applying the reverse charge regime by accounting formula 4426 = 4427.
The amount of VAT is due upon receipt of the goods in Romania, accompanied by documents.
Unlike an import of goods in which the amount of VAT is due to customs, in case of an intra-community acquisition, the amount of VAT is due to the Romanian state budget and is paid until the 25th of the month following the month in which the acquisition was made (date at which the goods were received from the courier company, accompanied by the delivery and transport documents).
The value of goods purchased from China and the amount of VAT due to the state budget for the intra-community acquisition made in Romania by applying the reverse charge regime by the accounting formula 4426 “deductible VAT” = 4427 “VAT collected” are reported:
- from a fiscal point of view: through the VAT return code 300 in line 5 and 20 “Intra-community acquisitions of goods for which the buyer is obliged to pay VAT (reverse charge)”, but without report in line 5.1 and line 20.1 “Intra-community acquisitions for that the buyer is obliged to pay VAT (reverse charge) and the supplier is registered for VAT purposes in the Member State from which the intra-Community supply took place “;
- from an information point of view: by recapitulative statement code 390 VIES, with the symbol A, FI country code, under the name “Intra-Community operator” the name of the supplier in China is entered, and under the heading “Intra-community operator code” the code of the Member State (SE ) of the shipping company which declared the intra-Community supply “
The reporting is carried out according to the following procedure from Order no. 705 / 11.03.2020 for the approval of the model and content of the form (390 VIES) “Recapitulative statement regarding intra-community deliveries / acquisitions / services” which can be found in the “NOTES” section point 3:
“3. For intra-Community acquisitions of goods which come from a supplier not established in the European Union and which has designated a tax representative in the Member State in which the transport of goods begins or which come from a supplier established in the European Union the Member State from which the intra-Community supply of goods takes place, the name of the supplier (not the tax representative) shall be entered under the heading “Name of the intra-Community operator” and the registration code for VAT purposes assigned to the foreigner shall be entered under the heading through the tax representative.
The same is true if the supplier not established in the European Union has not appointed a tax representative in the Member State where the shipment starts, but by applying by some Member States measures to simplify the declaration of imports, respectively a global representation of to a company which may be, for example, a forwarding / transport company, the non-EU operator is considered to be fiscally represented by that company.
Example: A company “A” from a non-EU state (X) sells goods to a company from Romania “B”. The goods are imported into a Member State of the European Union (Y) by the shipping company “C” and then the same company “C” declares on behalf of the supplier “A” from the non-EU state (X) (but under its own VAT code) intra-community delivery of goods from Member State (Y) to Romania.
In such situations, the shipping company “C” will be considered as fiscal representative. In the recapitulative statement on intra-Community acquisitions, the name of the supplier or company “A” from the non-EU state (X) shall be entered under the heading “Name of the intra-Community operator” and the code from the Member State (Y) of the company “C” consignment declaring intra – Community delivery “.
- from a statistical point of view: through the Intrastat statistical declaration, if the Romanian taxable person is a provider of statistical data.
In conclusion, VAT is due in Romania, but is not actually paid because the buyer in Romania is a taxable person normally registered according to the provisions of Article 316 of the Fiscal Code, in which case the reverse charge regime regulated by Article 326 paragraph (2) applies. ” (2) By way of exception to the provisions of paragraph 1, the taxable person registered in accordance with Article 316 shall record in the return provided for in Article 323 both the tax collected and the tax deductible, within the limits and under the conditions laid down in Article 297-301. , the tax relating to intra-Community acquisitions, goods and services purchased for his benefit, for which the person is liable to pay the tax, under the conditions laid down in Article 307 (2) to (6). “
Legal basis:
– ANAF Order 705/2020 for the approval of the model and content of the form (390 VIES) “Recapitulative statement regarding intra-community deliveries / acquisitions / services”
– 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 Government Decision no. 1/2016).