The procedure for establishing the VAT due in RO – purchases for which the VAT exemption was applied during the pandemic

In the Official Gazette (Part I) no.29 of 10 January 2023 ANAF Order no.2559 was published. /2022 on the approval of the Procedure for establishing the value added tax due in Romania, according to article 294 paragraph (4) of Law no. 227/2015 on the Tax Code, by the European Commission or by an agency or a authority  established under European Union law, related to the value of the supply/service for which the tax exemption was applied, according to article 294 paragraph (1) letter k1) of the Tax Code, but the destination of the goods/services was changed, as well as the model and content of some forms.

 

With the publication of the mentioned normative act, the model and content of the following forms are approved:

 

  • “Report on the establishment of the value added tax due in Romania, according to article 294 paragraph (4) of Law no. 227/2015 on the Fiscal Code, by the European Commission or by an agency or authority established under European Union law, related to the consideration of the delivery/service for which the tax exemption was applied, according to article 294 paragraph (1) letter k1) of the Fiscal Code, but the destination of the goods/services was changed”, provided in annex no. 2;

  • “Decision regarding the establishment of the value added tax due in Romania, according to article 294 paragraph (4) of Law no. 227/2015 on the Fiscal Code, by the European Commission or by an agency or authority established under European Union law, related to the consideration of the delivery/service for which the tax exemption was applied, according to article 294 paragraph (1) letter k1) of the Fiscal Code, but the destination of the goods/services was changed”, provided in annex no. 3;

  • “Decision to cancel the decision regarding the establishment of the value added tax due in Romania, according to article 294 paragraph (4) of Law no. 227/2015 on the Fiscal Code, by the European Commission or by an agency or authority established under European Union law, related to the consideration of the delivery/service for which the tax exemption was applied, according to article 294 paragraph (1) letter k1) of the Fiscal Code, but the destination of the goods/services was changed”, provided in annex no. 4; \

  • “Decision for the correction of material errors contained in Decision no. ……./…………… regarding the establishment of the value added tax due in Romania, according to article 294 paragraph ( 4) from Law No. 227/2015 on the Fiscal Code, by the European Commission or by an agency or authority established under European Union law, related to the consideration of the delivery/performance for which the tax exemption was applied, according to article 294 paragraph ( 1) letter k1) of the Fiscal Code, but the destination of the goods/services has been changed”, provided in annex no. 5.

PROCEDURE for establishing the value added tax due in Romania:

 

This procedure is used to determine, by the competent fiscal authority , the VAT due in Romania, according to article 294 paragraph (4) of Law no. 227/2015 on the Fiscal Code, with subsequent amendments and additions (Fiscal Code), by the European Commission or by an agency or authority  established under European Union law, which have acquired goods or services for the purpose of fulfilling the tasks assigned to them by the law of the European Union to combat the COVID-19 pandemic and which informs the fiscal authority  about the change of destination of the goods/services for whose delivery/provision the tax exemption was applied, according to article 294 paragraph (1) letter k1) of the Fiscal Code .

According to the procedure, taking into account the provisions of article 2 paragraph (3) of the Rules regarding the application of the provisions of article 293 paragraph (1) letter f1), article 293 paragraph (3), article 294 paragraph (1) letter k1) and of article 294 paragraph ( 4) from Law no. 227/2015 on the Fiscal Code, approved by Order of the Minister of Finance no. 1,345/2021, “competent fiscal authority ” means the fiscal administration for non-resident taxpayers within the Bucharest Regional General Directorate of Public Finances.

“Entity” means the European Commission or an agency or authority  established under European Union law, which have acquired goods or services from Romania, under an exemption regime, in order to fulfill the tasks conferred on them by European Union law to combat the COVID-19 pandemic. We mention that the procedure is applied by the department with attributions in the restitution/reimbursement of the value added tax within the competent fiscal authority , hereinafter referred to as the specialized department. In the conditions that the conditions for the exemption provided for in article 294 paragraph (1) letter k1) of the Fiscal Code cease to apply, the entity in question, which purchased the goods or services under the VAT exemption regime, informs the competent fiscal authority, regarding for each good/service whose destination has been changed and regarding the moment of the change of destination.

The information is sent to the fiscal authority , accompanied by copies of the documents from which the change of destination results and on the basis of which the VAT due can be determined. The specialized department organizes a record of the information and documents received. In the event that the documents submitted by the interested entity are not conclusive for the determination of the value added tax owed, the specialized department notifies the entity in order to clarify the situation, according to article 58 paragraph (1) of Law no. 207/2015 on the Fiscal Procedure Code, with subsequent amendments and additions (Fiscal Procedure Code).

The fiscal authority verifies whether the entity has benefited from the VAT exemption for each good/service whose destination has been changed and whether the provisions of title IV “Fiscal registration” of the Fiscal Procedure Code have been applied. In the event that the entity does not have a fiscal identification code already assigned by the fiscal authority in Romania, the entity must undertake the necessary formalities for fiscal registration in Romania or the fiscal authority shall fiscally register the respective entity ex officio, according to the law. In the case of each good/service whose destination has been changed, the specialized department establishes the value added tax due, from the moment of the change of destination, based on the documents attached in copy, to the information sent by the entity.

 

The specialized department prepares the following documents:

 

a) The report regarding the establishment of the value added tax due in Romania, according to article 294 paragraph (4) of Law no. 227/2015 on the Fiscal Code, by the European Commission or by an agency or authority established under European Union law, related to the consideration of the delivery/performance for which the tax exemption was applied, according to article 294 paragraph (1) letter k1) of The fiscal code, but the destination of the goods/services has been changed, according to the model provided in annex no. 2 to order. The report includes the elements that are taken into account when establishing the value added tax owed in Romania by the entity, in the case of each good/service whose destination has been changed.

b) The decision regarding the establishment of the value added tax due in Romania, according to article 294 paragraph (4) of Law no. 227/2015 on the Fiscal Code, by the European Commission or by an agency or authority established under European Union law, related to the consideration of the delivery/performance for which the tax exemption was applied, according to article 294 paragraph (1) letter k1) of The fiscal code, but the destination of the goods/services has been changed, according to the model provided in annex no. 3 to order. In the decision, the fiscal identification code obtained at the entity’s request or assigned ex officio by the fiscal authority , according to article 82 of the Fiscal Procedure Code, is entered.

 

The value added tax amount is determined subject to further verification.

 Based on the decision issued by the fiscal authority , the entity will pay, in the indicated account, the payment fee up to and including the 25th of the month following the one in which the conditions for applying the exemption, provided for in article 294 paragraph (1) letter k1) of the Fiscal Code , have ceased to apply.

In the event that it is found that, in the content of the establishment decision provided for in point 8 letter b), there are errors, other than material errors, the specialized department draws up a report, in which it details the situation found and proposes to correct the error, issues the form ” Decision to cancel the decision regarding the establishment of the value added tax due in Romania, according to article 294 paragraph (4) of Law no. 227/2015 on the Fiscal Code, by the European Commission or by an agency or authority  established under Union law European, related to the consideration of the delivery/service for which the tax exemption was applied, according to article 294 paragraph (1) letter k1) of the Fiscal Code, but the destination of the goods/services was changed”, according to the model provided in annex no. 4 of the order, and, as the case may be, a new decision regarding the establishment of the value added tax, including the corrected information, according to the model provided in annex no. 3 to order.

The correction of material errors in the content of the establishment decision provided for in letter b) can be done either at the entity’s request, or ex officio, by the specialized department, based on the information held. If it is found that, in the content of the establishment decision, there are material errors, the specialized department prepares a report, in which it details the situation found and proposes to correct the error by issuing the “Decision for the correction of material errors from the content of Decision no. … ../…… regarding the establishment of the value added tax due in Romania, according to article 294 paragraph (4) of Law No. 227/2015 on the Fiscal Code, by the European Commission or by an agency or an established authority  under European Union law, related to the consideration of the delivery/service for which the tax exemption was applied, according to article 294 paragraph (1) letter k1) of the Fiscal Code, but the destination of the goods/services was changed”, according to the model provided in annex no. 5 to order.

If, from the analysis of the entity’s request for the correction of the material errors provided above, there are no elements regarding the existence of material errors in the content of the establishment decision, the specialized department draws up the decision provided in the previous paragraph, ticking the corresponding box for rejecting the request for the correction of the material error.

The decisions provided in this procedure are drawn up in two copies, of which one copy, signed only by the head of the fiscal unit, is communicated to the entity, according to article 47 of the Fiscal Procedure Code, and the second copy is archived in the fiscal file of the entity. After the completion of the procedure, all documents received from the entity, as well as those issued by the specialized department, are archived in the fiscal file of the entity.

 

Legal basis:

Fiscal Code (approved by Law no. 227/2015, published in MO no. 688 of 10.09.2015), with subsequent amendments and additions;

ANAF Order 2559/2022 regarding the approval of the Procedure for establishing the value added tax due in Romania, according to article 294 paragraph (4) of Law no. 227/2015 on the Fiscal Code, by the European Commission or by an agency or authority  established under European Union law, related to the consideration of the delivery/performance for which the tax exemption was applied, according to article 294 paragraph (1) letter k1) of The tax code, but the destination of the goods/services was changed, as well as the model and content of some forms.