Friday August 6, 2021
On July 1, 2021, a new simplification system in e-commerce and services for non-entrepreneurs was introduced across Europe. In Romania, the e-commerce package, also known as the Single Window Mechanism (OSS), has been implemented through Regulation No. 59/2021.
For certain transactions with non-entrepreneurs (Business to Consumer, BtC), the e-commerce package facilitates VAT registration in one Member State, which collects VAT for all other Member States in which business is carried out. Until now, local VAT registration was required in every member state.
The non-EU regime applies to non-EU service providers who provide services to non-EU entrepreneurs whose place of performance is in the member state of consumption, regardless of the resulting sales in the EU.
Example: A British supplier provides construction work to EU citizens. In accordance with EU sales tax regulations, the place of delivery is at the building site. Whereas the service provider was previously obligated to register VAT in each member state, it can now apply for it in only one member state. If he chooses Romania, he must file sales tax reports here and collect, report and pay the VAT due in each state. Romania then allocates the appropriate VAT amounts to each participating Member State.
So far, this treatment has only been applied to telecommunications, radio, television and electronic services. It is now being extended to all services whose place of consumption is in the European Union.
who – which US system It applies in the following cases:
- Services within the above meaning provided by the EU service provider to non-entrepreneurs, remote sale of things for non-entrepreneurs from a cumulative threshold of 10,000 euros (46,337 lei).
- Any other service whose location is in depreciation according to VAT regulations (processing, vehicle rental, restaurants, catering, etc.)
- E-commerce platforms through which suppliers from the European Union or other countries sell to non-entrepreneurs. These platforms are considered as buyers and sellers for sales tax purposes. Sales from third countries of the platform are exempt from VAT; The platform itself can benefit from the EU system.
- A German supplier achieves remote sales of electronic devices to people from the European Union and at the same time provides telecommunication, radio, television, etc. services. If the minimum amount of €10,000 is not reached, these transactions are subject to German VAT. Otherwise, the German company can use the EU system application and pay the VAT due in all member states of Germany.
- A Hungarian company of a German supplier of electronic equipment carries out repairs to consumers in the European Union in connection with the sales of the parent company. Services are provided in several member states; According to VAT regulations, its location is in the consumer’s country. The Hungarian service provider can now apply for OSS in Hungary and only have to report and pay the VAT due in all EU countries.
- A Swiss manufacturer sells goods to consumers in the European Union through an e-commerce platform built in Romania. Sales made on the platform are exempt from VAT; In connection with this, there is a right to input tax deduction. The platform reports, collects and pays VAT due in all EU countries in Romania when using the EU system.
Import of low value goods
Taxpayers who import items with a material value of up to €150 (with exceptions) can use the OSS directly or through an intermediary in the EU country of residence or in the Member State of their choice. Otherwise, the person submitting the goods for customs clearance is obligated to pay VAT. Consent is required for this.
The new features are meant to reduce the administrative burden, but they also generate questions. In theory, you can now deregister in other EU countries. However, there may still be obligations or aspects to take into account (eg intrastat reports, VAT refunds) that require a local VAT ID number. Requires. Clarifications are expected in the near future – especially since the new procedures do not contain any transitional provisions.
It should be noted that the EU Commission has asked Romania to immediately correct the existing shortcomings in the implementation of the Directive.
Contact and more information:
STALFORT LEGAL. tax. review.
Bucharest – Sibiu – Bistrita
Tel .: +40 – 21 – 301 03 53
Fax: +40 – 21 – 315 78 36
Email: [email protected]
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