Situation: A company ABC SRL, a non-VAT paying micro-enterprise (from Romania) provides IT services for a taxable company in France.
Does the Romanian company have to register as a VAT payer or get a special VAT code
Solution: A non-VAT paying company in Romania is obliged to request the special tax code before providing IT services to a taxable person in France.
Please note that although the company in Romania is not a VAT payer, it is a taxable person, according to article 269 paragraph (1) and (2) of Law 227/2015 on the Tax Code.
Thus, the operation is taxable in France because the place of supply of services is considered to be at the beneficiary’s place, according to article 278 paragraph (2) of the Tax Code:
“Article 278. (2) The place of supply of services to a taxable person acting as such is the place where the said person receiving the services has established his place of business. If the services are supplied to a fixed place of business of the taxable person which is not the place where the person has established his business, the place of supply of services shall be the place where the fixed place of business of the person receiving the services is located. In the absence of such a place or fixed establishment, the place of supply of services shall be the place where the taxable person receiving the services has his permanent address or usually resides.”
The company in France is also the person liable to pay the tax, according to the equivalent in French law of Article 307(2) of the Tax Code:
“Article 307, paragraph (2) Tax is payable by any taxable person, including a non-taxable legal person registered for VAT purposes under Article 316 or 317, who is the recipient of services which are supplied in Romania under Article 278 paragraph (2) and which are supplied by a taxable person who is not established in Romania or is not deemed to be established for those services in Romania under Article 266 paragraph (2), even if registered in Romania under Article 316 paragraph (4) or (6). “
Therefore, the company in Romania, a taxable person not liable for VAT, will apply for a special tax code before providing intra-Community services by submitting form 010″ Tax registration declaration/Declaration of retention/Declaration of cancellation for legal persons, partnerships and other entities without legal personality “.
We remind you that, starting from March 2022, the registration according to the provisions of article 317 is no longer carried out through the form code 091 regulated by OpANAF. no.631/09.02.2016 for the approval of the model and content of some forms for registration/registration for value added tax purposes because this normative act has been repealed by OpANAF no.1699. /25.10.2021 for the approval of the forms for tax registration of taxpayers and types of tax obligations forming the tax vector which entered into force 90 days after the date of publication in MOF No.1056 of 4 November 2021.
The company will be registered for VAT purposes based on article 317 paragraph (1) item b) of Law 227/2015 on the Tax Code and will receive a special tax code, used only for intra-Community transactions:
“Article 317, paragraph (1) It is obliged to apply for registration for VAT purposes, according to this article:
- b) a taxable person whose place of business is in Romania, who is not registered and who is not obliged to register under Article 316 and who is not already registered under points a), c) or d) or paragraph 2, if he provides services which take place in another Member State, for which the recipient of the service is the person liable to pay tax according to the equivalent in the legislation of another Member State of Article 307 paragraph 2, before the service is provided;”
Subsequently, if the normal VAT registration code under Article 316 of the Tax Code is obtained in the future, the special tax code will have to be cancelled.
The company in Romania will issue an invoice for IT services without VAT, provided that the beneficiary submits a valid tax code for VIES.
The intra-Community supply of services will be reflected in the company’s sales journal.
In addition, the company will have to submit the D390 VIES form “Summary declaration on intra-Community supplies/purchases/provisions” regulated by Order No 705/2020 approving the model and content of the form (390 VIES) “Summary declaration on intra-Community supplies/purchases/provisions”, by the 25th of the month following the month in which the tax becomes chargeable (the tax becomes chargeable on the date of issue of the tax invoice).
The supply of services must be declared for the partner in France with the attribute “P- INTRA-COMMUNITY SUPPLY OF SERVICES”.
Legal basis:
– Tax Code (approved by Law no.227/2015, published in the Official Gazette no.688 of 10.09.2015), with subsequent amendments and additions;
– Methodological Norms for the application of the Tax Code (approved by HG no.1/2016).