Case:
A micro-enterprise in Romania, registered for quarterly VAT reporting, acquires artificial intelligence services from a company based in Dublin, Ireland, which holds a valid VAT number with prefix IE, listed in the VIES system.
The invoice shows 0% VAT and the note:
“Tax to be paid on reverse charge basis”
Tax Interpretation:
According to Romanian tax law, this is considered an intra-Community acquisition of services, based on:
- Art. 278(2) of the Romanian Fiscal Code – place of supply is Romania;
- Point 15(13) of the implementing norms – service is taxable in Romania;
- Art. 307(2) – VAT is due by the Romanian recipient through reverse charge.
Since the service provider is established in another EU country and the Romanian company uses the service in its economic activity, the beneficiary must account for VAT under the reverse charge mechanism.
Accounting and Reporting Obligations:
✅ VAT is recorded using the accounting entry:
4426 = 4427
(4426 – deductible VAT, 4427 – output VAT)
✅ VAT is reported as follows:
- In VAT return Form 300:
- Line 7 → Received intra-EU services;
- Line 22 → Deductible VAT;
- In the EC Sales List (Form 390 VIES) with symbol “S” (services).
✅ The taxable base is calculated in RON using the BNR exchange rate from the invoice date, which is also the VAT chargeability date.
Important Note:
This type of acquisition does not trigger the requirement to switch to monthly VAT reporting. Such a change is only required in the case of intra-EU acquisitions of goods, not services.