Based on the provisions of Government Emergency Ordinance no. 59/2021, three special OSS regimes were rolled out in Romania from 1 July 2021. The introduction of the special OSS regimes implements the legislative package of the European Commission that reforms the regulation of online commerce, and it means a significant change in the VAT regime for transactions with non-taxable persons in Romania.
The system already existed in the Romanian Fiscal Code under the name “Mini One Stop Shop” (MOSS) before 1 July, but only for electronic services. On 1 July 2021, it was expanded to include several categories of transaction, becoming the “One Stop Shop” (OSS).
These provisions aim to extend the simplification measures applicable to certain transactions with non-taxable persons (mainly natural persons) and applying VAT from the Member State of the buyer (thus avoiding registration for VAT purposes in multiple EU states).
Three special OSS regimes in Romania
Since 1 July 2021, three special OSS regimes are in force in Romania:
- The first of the special OSS regimes can be applied for certain services provided by taxable persons not established in the European Union towards non-taxable persons.
- The second of the special OSS regimes can be applied for transactions with non-taxable persons for distance sales of goods between Member States, for deliveries of domestic goods made by electronic interfaces facilitating such deliveries and for certain services provided by taxable persons established in the EU towards non-taxable persons, but not in the Member State of consumption.
- The third of the special OSS regimes can be used for the distance sale of goods imported from outside the EU.
A single ceiling of EUR 10,000 (roughly RON 46,337 in Romania) has been set in all Member States for intra-community deliveries of distance goods or, inter alia, for services provided electronically. So if this threshold is exceeded, the special regime is applied. However, it is possible to apply the special regime for at least two calendar years even if the ceiling is not exceeded.
Basically, in the case of sales to individuals from other EU countries, a Romanian company will apply:
- the Romanian VAT rate for sales under the ceiling,
- the VAT rate in the buyer’s state for sales above the ceiling.
Special regime for services provided by taxable persons not established in the European Union
Any taxable person not established in the European Union may use a special regime for all services provided to non-taxable persons who are established in the EU. The special regime allows, inter alia, the registration in a single Member State of a taxable person not established in the EU for all services provided to non-taxable persons established in the EU.
The entity will receive a special registration code for VAT purposes, and it is not necessary to appoint a tax representative.
By the end of the following month after the end of each calendar quarter, this entity must submit a special VAT return (in EUR) – regardless of whether services were provided under the special regime – which will contain:
- the special registration code for VAT purposes;
- total value, excluding VAT, of the services under the special regime, the applicable VAT rates and the corresponding amount of VAT subdivided into quotas, due to each Member State of consumption,
- the total amount of VAT due in the EU.
The taxable person not established in the EU must pay the total amount of VAT due in the EU, to a special account, in EUR, by the date on which the special declaration must be submitted. It cannot deduct VAT through the special tax return, but it can request a VAT refund under certain conditions (amongst others, if there is a reciprocity agreement regarding the VAT refund between Romania and the respective country).