The beginning of 2020 looks intense from a tax perspective. A series of legislative changes impacting the value added tax ("VAT") were announced at the end of 2019, including:

The VAT split payment mechanism is repealed effective 1 February 2020

  • Taxable persons applying the VAT split payment mechanism will have the available balance of their VAT account transferred by default into their current treasury/bank account between 1 and 11 February 2020;
  • Starting 23 December 2019, taxable persons will no longer be enrolled in the VAT split payment mechanism;
  • By 1 February 2020 the VAT account can be subject to enforcement proceedings by any creditor, irrespective of the nature of its receivable.

The above measures were set forth by Emergency Ordinance No. 78/2019 on the amendment of certain normative acts and setting forth measures in the agriculture sector, as well as for the approval of certain fiscal and budgetary measures, published in the Official Gazette of Romania No. 1031 on 23 December 2019.

The Ministry of Public Finance releases clarifications regarding the proof of transport for the purpose of exempting intracommunity supplies of goods

  • It will be presumed that the goods have been transported from an EU Member State to another if the vendor is in possession of the documents provided in art. 45a of Regulation (EU) 282/2011 (as amended by Regulation (EU) 2018/1912);
  • Otherwise, the intra-community transport of goods is to be justified according to Order 103/2016. These cases can refer, for instance, to situations where: the vendor/buyer transports the goods by its own means; the goods are means of transport and their dispatch is made on wheels; the vendor cannot prove its independency from the transporter / expedition house or if the latter are related to one another or to the buyer.

The press release in which the Ministry of Public Finance announced these measures is available here (in Romanian).

Draft bill regarding VAT quick fixes for intra-community transactions

The Ministry of Public Finance issued a draft bill for amending and supplementing Law No. 227/2015 regarding the Fiscal Code. The draft bill responded to the need for certain EU Directives to be transposed into the national legislation by 31 December 2019. It also refers to the transposing of Council Directive (EU) 2018/1910 of 4 December 2018 amending Directive 2006/112/EC on the harmonisation and simplification of certain rules in the value added tax system for the taxation of trade between Member States.

The draft bill is available here (in Romanian).