Among the first questions that arise when considering expanding your business across borders is how you will pay VAT for the sales recorded in other countries. Thus, we have prepared a guide to answer your questions and help you navigate this process more easily.
When do you need to register for VAT purposes in other EU countries?
According to the rules that came into effect on July 1, 2021, below the €10,000 threshold, VAT can be paid in the member state where the selling company is established. Once this threshold is exceeded, companies can easily register for the One-Stop Shop (OSS) – where they can easily declare and pay the VAT owed in other member states.
How can you pay VAT for sales made in other EU countries?
European authorities have created a simplified system to allow you to register for VAT in one country through the establishment of a single portal called the One-Stop Shop, which will subsequently handle the VAT payment processes to other EU member states where you trade products. After registering on the portal, you will receive an OSS code and be able to submit quarterly declarations to settle the VAT amounts in the EU member states where the distance sales were made.
Who can register for OSS in Romania?
For registration under one of the OSS regimes, it is mandatory to register in a single member state, which will be referred to as the identifying member state.
In Romania, companies with their registered office in Romania or, even if they have their registered office in a non-EU member state, but have a fixed place of business and carry out commercial activities in Romania, can register.
Companies that do not have a fixed place of business in the European Union can register for OSS in Romania if this is the member state where the goods are dispatched or transported, goods that fall within the scope of the EU regime.
Under the import regime, the identifying member state is the member state where the taxable person has established their economic activity.
How do you register for the One Stop Shop (OSS)?
On the main page of the ANAF website (anaf.ro), you will find the OSS menu under the footer. We recommend using private/incognito mode when accessing the website through Google Chrome or Mozilla Firefox.
Subsequently, you will be directed to choose the digital certificate to continue. It is important that the digital certificate can be read from a token through the browser, and no other program blocks access.
In the newly opened page, click on the Special Tools menu and select One Stop Shop. The OSS application interface will open, and you can choose the application that you need to complete based on your company’s profile.
How do you know which regime to apply for, when declaring the VAT related to distance sales?
The Non-EU/OSS regime – can be used exclusively by taxable persons (companies) that are not established in the EU, meaning they have not established their activity and do not have a fixed place of business in the EU.
The EU/OSS regime is intended for:
- A taxable person established in the EU (who is not a presumed supplier), to declare and pay VAT for: B2C services taking place in a member state where they are not established; distance sales of goods within the EU.
- A taxable person established outside the EU, to declare and pay VAT for distance sales of goods within the EU.
- An electronic interface (established in the EU or outside the EU) that facilitates the delivery of goods (presumed supplier), for: distance sales of goods within the EU; certain domestic deliveries of goods.
Import regime:
- Can be used by companies established in the EU, outside the EU, or by electronic interfaces for the distance selling of imported goods in batches with a value ≤ 150 EUR.
How do you submit VAT declarations in OSS?
Once registered in OSS, you will need to electronically submit a VAT declaration to the one-stop shop for each tax period, regardless of whether you have traded goods or services. The tax period is the calendar quarter for the Non-EU and EU regimes, and the calendar month for the Import regime.
Declaration 398 is dedicated to OSS, in which you will enter the unique OSS code obtained after the application is validated. In this declaration, you will include details about the type of service, the country of consumption, the taxable value, and the VAT amount. Please note that the data should be provided in EURO. The VAT rate will be automatically added when selecting the country of consumption, and you can choose the type of VAT.
The VAT declaration (and the corresponding payment) must be submitted to the one-stop shop by the end of the month following the tax period covered by the declaration.
Where will you pay the amounts related to the VAT OSS declaration?
The special VAT declaration is prepared in EURO, and the paid amount will be the total amount from the VAT declaration, covering all sums from the countries of consumption. The amount due is paid in EURO to the account:
– Bank: Banca Comerciala Romana
– Beneficiary: D.G.R.F.P. BUCURESTI
– IBAN: RO30 RNCB 0090 0006 9551 0027
– BIC: RNCBROBU
The payment document must specify:
– The company name,
– VAT identification code,
– The reference number of the OSS VAT declaration has the following format: RO/CUI/quarter/year within the EU and NONUE schemes,
RO/identification code within the import scheme/month/year for the Import scheme.
How long should you keep the documents?
In the event of an audit conducted by the tax authorities of the member states, it is necessary to keep the records of deliveries for 10 years.
