On 17 July 2020, Order no. 2148/2020 on amending and supplementing the Instructions for applying the Value Added Tax exemption for the operations set out in Art. 294 para. (1) lit. a) -i), Art. 294 para. (2) and Art. 296 of the Fiscal Code (Law no. 227/2015), approved by Order of the Minister of Public Finance no. 103/2016 (“Order 2148/2020”), was published in the Official Journal of Romania no. 628.
Specifically, the Order aligns Romanian VAT legislation with both the European Regulations and Directives already in force at the date of publication of this Order, as well as with the jurisprudence of the Court of Justice of the European Union (hereinafter "CJEU") as established in various recent cases. The order brings welcome clarifications to a large number of situations often encountered in practice. These clarifications that should help taxpayers during upcoming tax audits on Value Added Tax.
The main changes made by the Order are:
Intra-community supplies of goods
Exports and supplies of services directly related to exports
All the clarifications brought by Order 2148/2020 are important, and, with a few exceptions, all come to the aid of taxpayers in the case of disputes with the tax authorities. Although this legislation delays certain changes in national VAT law, all the clarifications mentioned above should be of interest to any taxpayer involved in interational trade (both goods and services). Therefore, if your company is engaged in such transactions, our recommendation is to analyze in detail the internal processes and procedures, in order to determine whether they are in accordance with the new legislative provisions.
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