Order No. 2148 of 14 July 2020 amending and supplementing the instructions for the application of the value added tax exemption for the transactions referred to in Articles 294 (1) (a) to (I), 294 (2) and 296 of Law No 227/2015 on the Tax Code, approved by the order of the Minister of Public Finance No. 103/2016 was published in the Official Gazette No. 628 of 17 July 2020. 

The main changes are to align the domestic rules with the European Regulation and Directive on quick fixes, but also to transpose the conclusions of some decisions of the European Court of Justice (ECJ).

Thus, we present the main changes below.

Intra-community supplies

•  In order to be considered independant parties, the provisions concerning the relationship of affiliation in terms of transfer pricing will be observed;
•  If the presumption under the EU Regulation is fulfilled, the justification for the exemption will be made with the documents provided by this Regulation (for more details you can access FiNNEWS no.1);
•  If the presumption is not fulfilled (i.e. transport by own means, the independence of the parties cannot be proven, etc.), the exemption will be justified through the documents provided for in Order no. 103/2016. For example, for intra-Community supplies of goods other than excise goods or new means of transport:

                    - 1 transport document (CMR signed, consignment note signed, bill of lading, AWB);

                    - 1 document from the following: an insurance policy corresponding to the dispatch or transport of goods, bank documents proving payment for the dispatch or transport of goods, official documents issued by a public authority, such as a notary, attesting to the arrival of the goods in the member state of destination, a document certifying receipt of the goods, issued by a depositary of the member state of destination other than the buyer of the goods, a written declaration by the buyer that the goods in question have been dispatched or transported to the member state of destination and comprising: the date of issue, the name and address of the buyer, the quantity and nature of the goods, the date and place of arrival of the goods, the identification of the person who accepts the goods on behalf of the buyer.

•  The declaration of the purchaser who has transported the goods can be obtained within a maximum of 150 days;
•  There are cases where non-reporting or incorrect declaration in VIES is duly justified in order not to jeopardize the applicability of the VAT exemption (e.g. corrected by rectifying statement- even during the tax audit - or included in the VIES declarations related to other tax periods).

Exports

The definition of the exporter for VAT purposes is amended to include transports in the absence of a commercial transaction.

It provides how persons not established in the EU can justify the exemption, i.e. its’ identification and invoice details are included in box 44 of the custom export document.

Some ECJ's conclusions have been transposed for the cases:

•  C-275/18 Milan Vins – when customs documents cannot be obtained, the exemption is justified by other means of proof (these are not regulated);
•  C-288/16 LC IK – services directly related to the export of goods are those which contribute to the actual completion of an export operation and are provided directly to the exporter or to the receiver of the exported goods.

Services performed in Romania on movable goods that will be transported outside the EU

In order to justify the exemption, in addition to the contract, invoices and documents certifying the transport to a third country will be required.

Documents justifying exemptions - general provision

The deadline for submitting the supporting documents for the application of VAT exemptions was extended to 150 days (previously the deadline was 90 days).