The three short legislative acts (the so-called quick fixes) fixing four specific issues adopted related to the new European VAT system were adopted by the Council of the European Union on 4 December 2018. The goal of the quick fixes is to solve problems arising in trade between EU member states, thus, Member States had/have to transpose the new rules into their law.

In case of intra-community deliveries of goods, the supplier in Romania needs specific documents in order to sustain the VAT exemption of the issued invoices.

VAT changes in Romania related to transport by or on behalf of the supplier

In case of transport by or on behalf of the supplier, the supplier should be in possession of:

• two documents specific to the type of transport (signed CMR, bill of lading, invoice from the carrier, air bill etc.), issued by two independent entities (unrelated), different from seller or buyer,

or

• one document from those listed above and one of the following documents: insurance policy for the transported goods, bank documents attesting the transport payment, minutes of receipt of the goods, issued by a depositary from the Member State of destination, official documents issued by a public authority, such as a notary, attesting the arrival of the goods in the Member State of destination. These documents have to be issued by two independent entities (unrelated), different from seller or buyer.

VAT changes in Romania related to transport by or on behalf of the buyer

In case of transport by or on behalf of the buyer the buyer sends to the supplier by 10^th of the next month following the delivery, a written statement mentioning that the goods have been transported by him, or by a third party on his behalf with all the details related to dispatched goods (for example state of dispatch, quantity and nature of the goods, date of issuance of the statement, name and address of the buyer, date and place of arrival of the goods, in the case of delivery of means of transport, the identification number of the means of transport and the identification of the person who received the goods on behalf of the buyer).

In case of transport by or on behalf of the buyer furthermore the supplier should be in possession of:

• two documents specific to the type of transport (signed CMR, bill of lading, invoice from the carrier, air bill etc.), issued by two independent entities (unrelated), different from seller or buyer,

or

• one document of ones listed above and one of the following documents: insurance policy for the transported goods, bank documents attesting the transport payment, minutes of receipt of the goods, issued by a depositary from the Member State of destination, official documents issued by a public authority, such as a notary, attesting the arrival of the goods in the Member State of destination. These documents have to be issued by two independent entities (unrelated), different from seller or buyer.

In case the above documents are not obtained, the tax authorities will charge VAT for the respective intra-community deliveries during a fiscal audit, together with fines, interest, penalties.

There are practical aspects of these VAT changes in Romania, which are not clarified yet and we hope that specific guidelines would be provided.

Annulment of split VAT regime

Apart from the implementation of quick fixes, there are also other recent VAT changes in Romania. The most important of them is that from 1 February 2020, the split VAT mechanism is no longer applicable. Under this procedure, the customer had to pay the invoices received from a supplier observing such mechanism in two separate bank accounts: the net amount in the current bank account of the supplier and the VAT amount in a special VAT bank account of the supplier.

Obviously, these rules generated more administrative and compliance work for all taxpayers.

If you would like to know more about the implementation of quick fixes or other VAT changes in Romania, please visit the homepage of Ensight, the exclusive representative of WTS Global in Romania.

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Exemption from VAT in Slovakia when supplying goods from Slovakia to another Member State

According to the proposed amendment, it will be possible from 1 January 2020 to claim tax exemption when supplying goods from Slovakia to another Member State only if certain substantive-law conditions are fulfilled. It is a response to the amendment of Article 138 of the VAT Directive.

One of the substantive-law conditions for VAT exemption when supplying goods to another Member State, as a result of the new wording of the respective Article, is that the recipient has been assigned a VAT identification number in the Member State in question. Furthermore, the recipient has to disclose this VAT identification number to the supplier.

The supplier has to proceed carefully when reporting the transaction in their EC-Sales list. According to the new rules for VAT in Slovakia, tax exemption cannot be granted if the supplier has not filed their EC-Sales list for the given period or if information in their EC-Sales list is incorrect, untrue or incomplete. Tax exemption may be granted by tax administration if the supplier proves their good-faith effort.

Evidence that must be available to the supplier to claim tax exemption has changed too. The currently proposed amendment to VAT in Slovakia does not include the provisions of Regulation 2018/1912 on conclusiveness of tax exemption, as it is expected that the Regulation shall be directly applicable and therefore it is not necessary to include such provisions in local legislation. The Regulation enumerates documents that must be available to the supplier, depending on whether transport of the goods has been carried out by the supplier, the recipient or a third party.

If summarized briefly, there must always be two non-contradicting documents issued by two different parties that are mutually independent from the seller and the recipient.

Chain transactions and allocation of transport if carried out by a “middle man”

Chain transactions mean the situations when certain goods are subject to multiple consecutive deliveries, although the consignation or transport of such goods is just one and is carried out from one Member State to another Member State, directly from the first supplier to the final recipient within the chain. In the past, it was difficult to determine which of the deliveries was non-stationary, i.e. which delivery can be allocated the transport and be exempted from VAT in Slovakia.

According to the proposed amendment of the VAT Act, transport is allocated primarily to the first delivery within a chain transaction. The VAT exemption shall be claimed by the supplier, who is the first link in the chain.

If, however, the middle man discloses their VAT identification number for the Member State from which the goods were dispatched or transported (VAT ID of the supplier’s Member state), consignation and transport shall be allocated to the second delivery.

Introduction of mandatory procedure when supplying goods in the “call-off stock” regime

Introduction of mandatory procedure when supplying goods in the “call-off stock” regime should simplify and/or unite rules applicable to this special regime. The new procedure should reduce burden on foreign entities whose registration was mandatory upon receipt and/or supply of goods in our country if such goods are supplied to one recipient, who is known in advance. Tax burden is thus transferred to this recipient.

In comparison with the current provisions, the most significant changes include the fact that new simplification rules can be applied even if the supplier has tax identification number in the destination state of the transport or that the goods must be delivered within 12 months from the completion of transport in the destination Member State.

The amendment includes provisions applying to situations when the Slovak Republic is the exporting state as well as those when the Slovak Republic is the destination state. In the past, these provisions were not included in local legislation. Last but not least, supplier shall be obliged to file their EC-Sales list twice.

Should you require any further assistance regarding the changes to VAT in Slovakia, please feel free to contact Mandat Consulting, k.s., the exclusive partner of WTS Global in Slovakia!

The post Implementation of quick fixes and other changes to VAT in Slovakia appeared first on WTS Klient | adótanácsadás | könyvelés | bérszámfejtés | HR szolgáltatások | digitális megoldások | állami támogatások.