Source: http://teaha.ro/en/news/vat-on-services-provided-electronically/
Timestamp: 2019-06-17 11:14:44
Document Index: 703041130

Matched Legal Cases: ['art. 278', 'Art. 278', 'Art. 278', 'art. 278', 'art. 315', 'art. 278']

VAT on services provided electronically - Teaha Management Consulting audit financiar, contabilitate, consultanta fiscala, evaluari , preturi de transfer, nerezidenti UE, Audit, Payroll &HR, Servicii de salarizare Administrare personal Finanțare Relația cu autoritățile
VAT on services provided electronically
In the Official Gazette of Romania (Part I) no.296 from April 17, 2019, was published the Law no. 60/2019 for amending and completing the Law no. 227/2015 regarding the Fiscal Code.
The above mentioned normative act brought amendments to the Fiscal Code, among others, to the VAT regime applicable to telecommunication, broadcasting and television services and electronically supplied services provided to non-taxable persons.
Thus, the rules for establishing the place of supply in terms of value added tax, for the electronic, telecommunication, television and radio services rendered to non-taxable persons from other U.E. member states, are changed, below the limit of 10,000 euro / 46,337 lei.
As a result of these changes, for the services provided electronically, the telecommunication services and the broadcasting and television services, the following rules for determining the place of performance are applied:
The general rule is provided in art. 278 par. (3) of the Fiscal Code, according to which the place of supply of services to a non-taxable person is the place where the provider has established the headquarter of his economic activity.
Art. 278 paragraph (5) letter h): according to which the location of such services is considered to be the place where the beneficiary is established, has his or her usual domicile or habitual residence.
Art. 278 paragraph (8) – introduced by Law no. 60/2019 which establishes that the provisions of para. (5) lit. h) does not apply if the following conditions are met cumulatively:
the provider is established or, if he is not established, has his permanent address or usually residence in a single Member State;
services are provided to non-taxable persons who are established, have their domicile or habitual residence in any Member State other than the Member State referred to in point a);
the total value, without VAT, of the supplies referred to letter b) does not exceed in the current calendar year EUR 10,000 or the equivalent of this amount in national currency and did not exceed this amount during the previous calendar year.
Therefore, for the services provided electronically, the telecommunication services and the broadcasting services provided by a taxable person registered for VAT purposes in Romania to non-taxable persons, the VAT regime will be:
services rendered to non-taxable persons who have their domicile or habitual residence in Romania. are taxable in Romania
services rendered to non-taxable persons who have their domicile or habitual residence outside the European Union are not taxable in Romania, as they have the place of supply outside Romania – where the beneficiary is established, or has his permanent residence or habitual residence.
services rendered to non-taxable persons who have their domicile or habitual residence in the European Union, in a state other than Romania, have the place of provision in Romania and the provider will collect VAT in Romania up to the limit of 10,000 euro / 46,337 lei of these services to non-taxable persons who are established in any Member State other than Romania.
After exceeding this limit during a calendar year, from that moment the exception from art. 278 (5) let. h) of the Fiscal Code and the location of supply is considered to be in the state where the beneficiary is established, so VAT is no longer due in Romania but in the Member State where the beneficiary is established.
After this date the company may use the special regime regulated by art. 315 of the Fiscal Code. The application of this regime is not mandatory, but it will allow the Romanian company to provide electronic services within the European Union without having to register for VAT purposes in each of the Member States in which it provides. The company may opt to apply this special scheme until reaching the limit of 10,000 euro / 46,337 lei but this option applies for at least two calendar years.
It is important to note that the general rule provided for in Article 278 (3) of the Fiscal Code applies only if the services can not fall within any of the exceptions.
In situations where the services may fall within one of the exceptions provided in art. 278 (5) lit. h) or paragraph (8) of the Fiscal Code, the exception always prevails, and the general rule is not applicable.
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