European and International Taxation EU Tax Harmonization VAT

European and International Taxation EU Tax Harmonization – VAT in Member States The case of Romania Cluj-Napoca Jean Monnet Module: Managing the EU: Taxation, Economics and Governance

European and International Taxation Is VAT payable in Romania? 5 Essential questions: 1. Taxable person 2. Operation is taxable 3. Place of the operation 4. Exemption 5. Person that has to pay the VAT

European and International Taxation • YES • Romania? • Exemption? • NO VAT IN ROMANIA • YES NO VAT DUE IN ROMANIA • NO • LIABLE PERSSON VAT SUPPLYER VAT CLIENT VAT IMPORTER VAT fiscal reprezentative

European and International Taxation Taxable person => art. 269 Fiscal Code ü any person that undergoes üIn an independent matter üNo matter the place üEconomic activities as forseen in art. 269(2) of the fiscal code üWhatever the purpose and the outcome of this activity.

European and International Taxation Taxable operations ü Supply of goods or services in cash ü Place of supply => Romania ü Undertaken by a taxable person ü Has to be generated from an economic activity

European and International Taxation Place of the operation ² Supply of goods with transportation => Place where the goods are located at the beginning includes intra-community acquisitions ² Supply of goods without transportation: the place where the goods are available to the client ² Supply of goods with installation / assembly => the place where these are installed ² Intra-community purchases => Place => the member state where the transport ends! ² Import of goods => Place => where the goods enter the community

European and International Taxation Import VAT procedures Obligations in cases goods are supplied or transferred to another MS: – Conditions for the exemption are set by the MS (art 131 of VAT directive), – Different obligations, control mechanisms in place, - VAT declaration, - VAT identification / possible tax representative, - Recapitulative statement (VIES)…

European and International Taxation • Servicii de restaurant si catering Servicii legate de bunurile imobile • Art. 271 CF • B 2 B • Locul unde beneficiarul isi are stabilit • sediul activitatii economice, • exceptand: • Activitati culturale, artistice, sportive, stiintifice, educationale, de divertisment precum si alte activitati similare • Inchiriere de mijloace de transport pe termen scurt (Rent a car) • Servicii intangibile Servicii de intermediere • B 2 C • Locul unde prestatorul isi are stabilit • sediul activitatii sau un sediu fix de la care • sunt prestate serviciile • exceptand: • Activitati auxiliare • : serviciilor de transport precum si lucrarile asupra bunurilor mobile corporale • Servicii de transport intra-comunitar • Reguli speciale - Use and enjoyment

European and International Taxation Supply of services B 2 B • Where the beneficiary has its HQ or a PE B 2 C • Where the supplier has his HQ or a PE from where the activities are carried out

European and International Taxation Supply of services - exemptions B 2 B / B 2 C In case of services related to imovable goods • Services related to cultural/sports/education/scie ntific activities • Local transport of people • Restaurant and catering • Rent a car (short term lease of vehicles) Beneficiary is outside the EU: Services related to transport, evaluations and works on movable goods => taxable in Ro if these are done in Ro • Mediation services • Intra-community transport • Beneficiary is outside the EU: Leasing / renting transport vehicles

Case studies: • Hungary • Supplier in HUN European and International Taxation Case studies: • Romanian client is a taxable person • Raw materials • Processed goods • Processed return to Romania

European and International Taxation Yes 1. Operation handled by a taxable person? 2. Operation in the scope of VAT? Yes (processing of raw materials) 3. Place of the operation? Romania (art. 271, alin. (2), CF) 4. Exemption? NO 5. Who is liable to pay VAT? Romanian client

European and International Taxation Other examples • • • Company A from Romania purchases goods from company B from Germany. According to the contract, the goods are transported from Germany in Hungary at the company C, C being one of A major clients. Company A from Romania, signs a contract for the sell of goods with company B from Hungary. On behalf of B, company A delivers the goods from Romania in the Ukraine to C, C being one of B’s distributor on the Ukraine market. Company A from Romania signs a contract with B from Portugal. Company A has to issue a report on the tax regime of real estate in Romania. Company A from Romania signs a contract with B from Germany. Company A has to issue a report related to a building which B wants to purchase. Company A from Romania signs a contract with B from Switzerland. Company A has to transport equipment from Constanta to Cluj to company C, C being one of B’s clients.