In the Official Gazette no. 182 / 23.02.2021, was publish the Order no. 239/2021 for the approval of the Registration Procedure for value added tax purposes, according to the provisions of art. 316 para. (1) lit. a), b) or c) of Law no. 227/2015 regarding the Romanian Fiscal Code, in force since February 23, 2021.
We would like to mention that this procedure was published because of the elimination in 2020, by Government Emergency Ordinance no. 69/2020, of the condition regarding the fulfillment of mandatory risk assessment as a criterion for obtaining the VAT code.
Through the new provisions at point 88 par. (1) letters c) and d) of Title VII of the Methodological Norms, the date from which the registration for VAT purposes on the Romanian territory is considered valid for, certain categories of taxable persons is modified, as follows:
in the case of taxable persons requesting registration for VAT purposes in Romania according to art. 316 paragraph (1) letter a) of the Romanian Fiscal Code, respectively before carrying out operations (before the legal establishment to the Romanian Trade Register), regardless of whether declares that it is to achieve a turnover lower or exceeding the exemption threshold (300.000 RON), the registration for VAT purposes is considered valid starting with the date of communication of the registration certificate for VAT purposes in Romania (point 88 paragraph (1) letter d ) from Title VII of the Methodological Norms).
What are the actual steps, and how this translates into practice, for a LLC that is not yet legally registered at by the Romanian Trade Register:
- The taxpayer, through Advice Accounting, will submit the form 098 (because the registration is requested together with the establishment at the Trade Register). In this situation, the application for VAT registration purposes is submitted to the competent Fiscal Administration in Romania on the same day as the submission to the trade register office of the application for company incorporation on the Romanian territory;
- The National Agency for Fiscal Administration in Romania verifies the existence of the facts registered in the fiscal record with the occasion of the company incorporation, the presentation of the fiscal record certificate being mandatory at the company establishment in Romania (according to the provisions of art. 8 paragraph (1) of the Government Ordinance no. 39/2015 on the fiscal record);
- The Fiscal Administration is performing the verification of the VAT application after receiving the information regarding the registration in the trade register of the LLC on the Romanian territory.
- in the case of taxable persons requesting registration for VAT purposes according to art. 316 paragraph (1) letter c) of the Fiscal Code, respectively who, after establishment, opt for VAT registration purposes in Romania, although the turnover achieved during a calendar year is lower than the exemption threshold, the registration for VAT purposes is considered valid starting with the first day of the month following the month in which the taxable person requests the registration (point 88 paragraph (1) letter c) of Title VII of Methodological norms.
In practice, this registration methodology presumes for a Romanian LLC the following:
- The taxable person, represented through POA by Advice Accounting is requesting the registration for VAT purposes after the incorporation of the LLC at the Trade Register, by submitting to the competent fiscal administration the form 010, having completed the column “Data on the fiscal vector, section” Tax on added value ”;
- After receiving the request / statement, the specialized department analyzes the information contained in the request / statement and, as the case may be, in the submitted documentation and verifies their completeness and correctness;
- The specialized department draws up the Certificate of registration for VAT purposes, having written the date of registration and the registration code for VAT purposes assigned.
Given the current legal provisions, which require the registration for VAT purposes of taxable persons, only based on the registration application, without giving the legal possibility for rejection of the application by the tax authority in Romania, there is a risk to register for VAT purposes taxable persons who meet the conditions for cancellation of VAT code according with art. 316 paragraph (11) letters a) and c) of the Romanian Fiscal Code.
In order to eliminate this risk, under the current regulations, the Romanian Fiscal Administration is proposing through this new procedure for VAT purposes registration, the obligation to verify these cancellation conditions for each application for VAT registration, after the establishment of the company, according to art. 316 paragraph (1) letter b) of the Fiscal Code (as they have reached or exceeded the exemption threshold) or according to art. 316 paragraph (1) letter c) of the Fiscal Code (as it opts for VAT purposes registration, although the turnover achieved did not exceed the exemption threshold of 300.000 RON).
If the taxable person meets any of the below highlighted cancellation conditions, the tax authority will also issue the decision to cancel the registration for VAT purposes, from the date of registration. As a result, both the certificate of registration for VAT purposes and the decision to cancel this registration will be communicated to the taxable person.
Conditions for cancelling the VAT code according to article 316 par. 11 of the Romanian Fiscal Code:
I. if the company is declared inactive according to the provisions of the Fiscal Procedure Code, the VAT code is cancelled from the date of declaration as inactive;
II. if the shareholders / directors of the taxable person, or the taxable person themselves have registered in the fiscal record offenses and / or the facts provided in art. 4 para. (4) lit. a) of Government Ordinance no. 39/2015 regarding the fiscal record, from the date of communication of the annulment decision by the competent fiscal bodies. By exception, in the case of companies regulated by Law no. 31/1990, republished, with subsequent amendments and completions, it is ordered the cancellation of the registration of the person for VAT purposes if:
- the administrators and / or the taxable person himself, in the case of joint stock companies or limited partnerships, have registered in the fiscal record offenses and / or the facts provided in art. 4 para. (4) lit. a) of Government Ordinance no. 39/2015;
- the majority shareholders or the sole shareholder and / or the administrators and / or the taxable person itself, in the case of companies other than those mentioned in point 1, have registered in the fiscal record offenses and / or the facts provided in art. 4 para. (4) lit. a) of Government Ordinance no. 39/2015.
The conclusion is that the registration for VAT purposes in Romania remains under a simplified form, with the possibility of presenting it on the same day with the registration with the Trade Register, provided that none of the cancellation conditions are applicable.