Situation: What would be the way for a company in Italy to register for tax purposes in Romania with a valid VAT code for intra-Community transactions?
Solution:
If the company in Italy carries out several operations in Romania that give the right to deduct the tax, it is obliged to register for VAT purposes.
Therefore, we have the provisions of article 316 paragraph (4) and article 316, paragraph (6) of the Fiscal Code, as appropriate:
(4) A taxable person who is not established in Romania according to article 266 paragraph (2) and neither registered for VAT purposes in Romania according to this article shall apply for registration for VAT purposes to the competent tax authorities for transactions carried out on the territory of Romania giving the right to deduct tax, other than transport services and services ancillary thereto, exempted under Article 294 paragraph (1)(c) – (n), Article 295 paragraph (1)(c) and Article 296, before the said operations are carried out, except in situations where the person liable to pay the tax is the recipient, according to Article 307 paragraph (2) – (6).
6) The taxable person not established in Romania and not registered for VAT purposes in Romania shall apply for VAT registration according to this article, prior to the performance of the operations, who intends to:
a) to make an intra-Community acquisition of goods for which he is liable to pay tax under Article 308; or
b) to make an intra-Community supply of goods exempt from tax.
c) to carry out intra-Community distance sales of goods in accordance with Article 266 paragraph (1) point 35, which have the place of departure of the dispatch or transport of the goods in Romania and for which they opt to use the special scheme provided for in Article 315.
Since it is specified that the company will carry out intra-Community transactions (it is not specified if it is also a service provision), it should have a fixed establishment in Romania.
Thus, in the case of services, according to point 14 of the implementing rules of the tax code:
- ……
(2) In application of Article 278 paragraph (2) of the Tax Code, fixed establishment means the establishment defined in Article 266 paragraph (2) letter b) of the Tax Code, which is characterized by a sufficient degree of permanence and an adequate structure in terms of human and technical resources allowing it to receive and use the services that are provided for the own needs of the establishment.
(3) In application of Article 278 paragraph (3) and Article 278 paragraph (5) letter g) of the Tax Code, fixed establishment means the establishment defined in Article 266 paragraph (2) letter b) of the Tax Code, which is characterized by a sufficient degree of permanence and an adequate structure in terms of human and technical resources enabling it to provide the services concerned.
(4) Having a VAT registration code is not sufficient for an establishment to be considered a fixed establishment.
According to Article 266, paragraph 2:
b) a taxable person whose place of business is outside Romania is considered to be established in Romania if it has a fixed place of business in Romania, i.e. if it has sufficient technical and human resources in Romania to carry out regular supplies of taxable goods and/or services;
c) a taxable person whose place of business is outside Romania and who has a fixed place of business in Romania under point b) shall be considered a taxable person who is not established in Romania for supplies of goods or services made in which the fixed place of business in Romania does not participate.
Therefore, the company in Italy will open a fixed establishment in Romania and will register for VAT purposes by submitting the 013 Declaration.
If it is considered that the company in Italy does not have sufficient technical and human resources to carry out supplies/purchases of goods or intra-Community purchases/provision of services to be considered as having a fixed establishment in Romania, then it will register in Romania by submitting Declaration 015.
Legal basis:
– Fiscal Code (approved by Law no.227/2015, published in MO no.688 of 10.09.2015), as amended and supplemented;
– Methodological Norms for the application of the Tax Code (approved by HG no.1/2016);
– ANAF Order 3140/2016 for the approval of the procedure for the tax registration of non-resident taxpayers carrying out activities in Romania through one or more permanent establishments, as well as the model and content of form 013 ”Tax registration declaration / Declaration of maintenance / Declaration of cancellation for non-resident taxpayers carrying out activities in Romania through one or more permanent establishments”;
– ANAF Order 1699/2021 for the approval of the tax registration forms of taxpayers and the types of tax obligations forming the tax vector.