We are a company located in the Netherlands, selling industrial equipment. We will have a supply with installation in Romania. Should we need to register for VAT in Romania? Is it relevant if we will have other suppliers from Germany delivering goods directly in Romania?
A: Yes, the fact that goods will be delivered by suppliers directly to Romania is relevant, and the Dutch company needs to register for having intracommunity purchases in Romania (art. 316, paragraph (6), letter a) of the Fiscal Code).
If otherwise, the following analysis must be taken into consideration (all articles indicated below are reports of the Fiscal Code):
THE GENERAL RULE – THE VAT IS DUE BY THE SUPPLIER
According to article 307, paragraph (1), the person in charge to pay the VAT, if such tax is due, is the taxable person supplying goods or services, except the situations in paragraphs (2) – (6).
EXEMPTIONS FROM THE GENERAL RULE:
Paragraph (6): in other circumstances than those described in paragraphs (2)-(5), when the supply is done by a taxable person that is not established in Romania, or it is not considered to be established in Romania for the respective supply according to art. 266, para (2) and that are not registered in Romania according to art. 316, the person in charge of paying the VAT is the taxable or nontaxable person established in Romania (…), which is the beneficiary of taxable supplies in Romania according to art. 275 or 278
ANALYZE THE CONDITIONS TO APPLY FOR THE EXEMPTION:
- The supply is done by a taxable person not established in Romania or is not considered to be established in Romania for the respective supply according to art. 266, para (2) – a foreign company is considered to the established in Romania from a VAT perspective if it has a PE in Romania or if it holds enough resources in Romania to deliver goods and provide services regularly.
- The beneficiary is a taxable or nontaxable person established in Romania
- The supply is taxable in Romania, according to art. 275 and 278 – the supply with installation is taxable in Romania, according to art. 275, para (2).
In conclusion, if the conditions to apply the exemption provided by art. 307, paragraph (6) are fulfilled, THE PERSON IN CHARGE TO PAY THE VAT IS THE ROMANIAN BENEFICIARY AND, AS A DIRECT CONSEQUENCE, THE COMPANY DOES NOT HAVE AN OBLIGATION TO REGISTER FOR VAT IN ROMANIA.