Intra-Community VAT in Romania

WHAT IS INTRA-COMMUNITY VAT?

Intra-Community VAT is value added tax on transactions between Member States of the European Union. The intra-Community VAT code is a unique identification number assigned to legal entities not liable for VAT (PFA or SRL) to carry out transactions with another company in an EU Member State. No VAT will be charged on domestic transactions, even though international transactions within the European Community will be subject to VAT. 

If a company does not exceed the threshold of 300.000 lei of revenue in a fiscal year or if no VAT has been opted for VAT on receipt, then this intra-community VAT code is required for transactions with another company in an EU country. 

In its structure, the intra-Community VAT code starts with the country code, followed by the national VAT number.

The intra-Community VAT code is required under Article 317 of the Tax Code for taxable persons not liable to VAT. Thus, you will need to obtain this code in situations such as:

• Provision of services (for another taxable person in the European Union)
  • The supplier’s VAT code must be entered on the tax invoice; 
  • Communication of the customer’s VAT code is required; 
  • The customer declares and pays VAT in the country where he is established;

• Purchase of services (from another taxable person in the European Union)
  • In general these are hosting services, online promotion, development services, subscriptions for publications, applications, software.
• Intra-Community acquisition of goods exceeding €10,000 per year (34,000 lei)

Intra-community VAT rules apply to EU Member States with some exceptions such as: Faroe Islands (Denmark), Canary Islands (Spain), some jurisdictions that do not cooperate for tax purposes (off-shore territories in France and the Netherlands). 

The intra-Community VAT code can be canceled in the following cases, namely if:

• 1 year has elapsed since the code was applied for;
• The intra-Community VAT code certificate has not been extended; 
• The value of the annual purchases is below the ceiling imposed by law;
• The firm becomes liable for VAT;
• The person ceases economic activity;

HOW MUCH IS INTRA-COMMUNITY VAT?

The intra-Community VAT rate is not fixed, it varies according to the standard VAT rate of each EU country, which has to comply with the general rules on intra-Community transactions. In Romania, the standard VAT rate is 19%, but if a company in Romania concludes a transaction with another company in an EU country, the applicable VAT rate will be the one specific to the country with which the transaction is concluded. 

The EU Member States’ standard rates are:

PAYMENT OF INTRA-COMMUNITY VAT

In Romania, payment of intra-Community VAT is made to the National Agency for Fiscal Administration (ANAF).Intra-Community VAT is paid and declared by submitting the specific documents required by law, namely: 

• Declaration 301 (Special Value Added Tax Return): at the ANAF office in whose territorial circumscription the depositor’s registered office is located or records are kept;
• Declaration 390 (recapitulative statement on intra-Community supplies/purchases/supplies): online on the ANAF website or at the ANAF office.

Both declarations must be entered after each month in which intra-Community transactions were carried out until the 25th of the month following the transaction.

OBTAINING INTRA-COMMUNITY VAT

The following documents are required to obtain the intra-Community VAT code:

1. Declaration 700 (“Declaration for the registration/modification in electronic environment of the categories of declarative tax obligations entered in the tax vector”)
2. Copy of the company registration certificate (CUI)
3. Copy of the company director’s identity card

Declaration 700 can only be made online, with digital signature, via the Virtual Private Space. The certificate may take a few working days to be issued and can be collected from the ANAF office of the requesting company.