Simplifications for E-Commerce in Romania from a VAT Perspective

Starting with July 2021, Romania has duly implemented the extended One Stop Shop (OSS) mechanism by Government Ordinance (GO) No. 59/2021 as part of the simplification measures for e-commerce and services rendered to non-taxable persons. The package is aimed to reduce administrative burden in the VAT field, where the VAT registration for certain B2C transactions will be required only in one single Member State. Nevertheless, further clarifications are expected since no transition rules exist. In brief, the VAT package consists of three main pillars: Non-EU OSS, EU OSS and IOSS.

Prior to the introduction of the non-EU OSS regime, non-EU-service providers which rendered services to EU non-taxable persons (e.g. individuals) with the place of supply in the consumption / enjoyment member state were supposed to register for VAT purposes in each member state where the services were rendered. Based on the simplifications, only one VAT registration is now necessary, whilst the registration state allocates the corresponding VAT amounts to each member state involved.

EU-taxable persons may now apply the EU OSS regime for the following operations:

• For services rendered to EU individuals established in a different EU member state in the field of telecommunication, broadcasting and electronic (TBE) and intra-community (IC) distance sales of goods cumulatively higher than the threshold of EUR 10,000, i.e. RON 46,337, the EU regime will allow the supplier to charge local VAT due in each member state by way of a special VAT registration in the home country of the supplier.
• Other services rendered by an EU supplier to an EU individual with the place of supply in the country of consumption / enjoyment (e.g. works on movables, short-term rental of vehicles, restaurant and catering services, services related to immovable, etc.) may allow the EU-provider to request the OSS regime in the home country, report and pay only there the VAT owed in all EU member states.
• Non-EU suppliers using electronic platforms (buyer-reseller from a VAT perspective) for sales to EU consumers are VAT exempt. In the same time, the platform itself may apply the EU OSS regime for the IC sales / local sales performed to EU consumers.

Low value goods (150 EUR) imported in the EU and subsequently sold

For simplifying the declaration and payment of VAT for small value goods (i.e. maximum EUR 150) imported in the EU by EU and non-EU taxable persons, two regimes were implemented (i) IOSS (directly or via an intermediary) or (ii) a special declaration and payment regime, which requires prior approval of customs authorities for the person presenting the goods in customs.

Takeaway: although the regimes were implemented to ease administrative burden, in practice, as there are certain particularities which may impact the eligibility for the application of the OSS regime, a comprehensive analysis would need to be performed on a case-by-case basis.

Please find more detailed information here: https://stalfort.ro/wp-content/uploads/2021/10/20210908-EG_E-Commerce-and-Services-rendered-to-Non-taxable-persons-comprehensive-simplifications.pdf