Mini One Stop Shop (M1ss) And Vat On Digital Services


According to art. 314 and art. 315 of Law 227/2015 on the Fiscal Code (hereinafter referred to as the “Fiscal Code”), the provision of electronic, telecommunications, broadcasting or television services by companies in the European Union to non-taxable persons (such as natural persons or various institutions who are not considered taxable persons) established in other EU Member States, will be taxed in the country where the beneficiary is established, has his domicile or habitual residence.

Thus, if, for example, a software developer from Romania sold its products online to individuals in other Member States, it was required that by 2015 to collect 24% VAT in Romania on each sale. From 2015, the same provider will be obliged to collect VAT, at different rates, from each country where the beneficiary of each sale is established or has a permanent residence. The provider may comply with the obligations to collect and declare VAT, either by registering for VAT purposes in each Member State where he makes sales to non-taxable persons or by electronic registration in the M1SS program.

Romanian companies that will register for the use of M1SS must use the online platform provided on the portal of the National Agency for Fiscal Administration (hereinafter referred to as “NAFA“), and then submit a special VAT declaration quarterly by which they will declare what amounts of VAT they have collected for each Member State of residence of the beneficiaries of the services provided.

Following the submission of these special VAT declarations, the taxpayer will pay the total amount, in RON, entered in the VAT declaration related to the services provided to individual customers established in the EU in a special account opened with the treasury. The distribution of VAT amounts to each tax authority in part of the EU Member States included in the special VAT return will be done with the help of a specialized program by the Romanian tax authorities, the taxpayer not being involved in this process.


According to Regulation no. 1042/2013 of the European Council (hereinafter “Regulation No 1042/2013”), telecommunications services include:

  • fixed and mobile telephony services for the transmission and switching of voice, data and video images, including telephony services with a video component;
  • telephone services provided via Internet;
  • voicemail, call waiting, call forwarding, caller ID, threesome and other call management services;
  • paging services;
  • audiotext services;
  • fax, telegraph and telex;
  • internet access, including the World Wide Web;
  • private network connections, which provide telecommunications connections for the exclusive use of the customer.

Broadcasting and television services include the provision of audio and audiovisual content, such as radio and television programs provided to the general public through communications networks by a media service provider and under its editorial responsibility, for simultaneous listening or viewing based on a grid of programs, including radio or television programs distributed over the Internet or through a similar electronic network (IP streaming) fall into this category.


Appendix II of the European Directive no. 112/2006 on the common VAT system includes services provided electronically in the following categories:

  • providing and hosting Internet sites, remote maintenance of programs and equipment;
  • providing software and updating it;
  • providing images, text and information and making databases available;
  • providing music, movies and games, including gambling and betting, and shows;
  • provision of distance learning services.

As the accelerated development of the practice has often led to various interpretations of the above categories, EU Regulation no. 282/2011 (hereinafter referred to as “Regulation no. 282/2011”) establishes in art. 7 the criterion regarding the classification of services provided electronically, stating that these services include services provided via Internet or an electronic network and their nature determines their automatic provision, which involves minimal human intervention and impossible to achieve in the absence of information technology.

Regulation no. 282/2011 provides a number of practical examples of the categories required by the Directive. The most relevant are: remote systems administration; online data storage, when certain data are stored and extracted by electronic means; providing online disk space on request; digitized content of books and other electronic publications; subscriptions to online newspapers and magazines; providing advertising space, including advertising banners on a website; use of search engines and internet directories.

With regard to distance learning, it is stated that it is considered an electronic service only in so far as its operation depends on the Internet or a similar electronic network and the provision of which requires limited or no human intervention, including virtual classes, unless the Internet or a similar electronic network is used only as a tool for communication between teacher and student.

Because the only issue that could present difficulties is the establishment of the place of taxation, EU Regulation no. 1042/2013 establishes the following elements that can serve as evidence when establishing it: the customer’s billing address, the IP address (internet protocol) of the device used by the customer; customer’s bank details; the mobile country code of the international identifier of the mobile subscriber stored on the SIM card used by the customer; other commercially relevant information.

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