It is our pleasure to inform you that, starting the 1st of January 2014, the Romanian tax legislation will be amended to be more compliant with the European tax provisions. One of the most important changes…
It is our pleasure to inform you that, starting the 1st of January 2014, the Romanian tax legislation will be amended to be more compliant with the European tax provisions. One of the most important changes from a non-resident’s point of view is the elimination of the obligation to provide proof of payment, in order to exercise his refund right for the VAT related to his acquisitions in Romania.
As an EU member state, Romania must implement in its domestic tax legislation the provisions of the Council Directive 2008/9/EC, as any other Council Directive. According to the provisions of Article 5 of the Directive, Romania shall refund to any taxable person not established in Romania any VAT charged in respect of goods or services supplied to him by other taxable persons under certain conditions. However, Romania chose to limit this VAT refund right only to the VAT amounts actually paid to suppliers. As a result, the European Commission informed Romania in 2012 (EU Pilot 3927/2012/TAXU) of its incorrect implementation and threatened to start infringement procedures. Only now, to avoid the onset of the infringement proceedings, the Romanian Government issued the Emergency Ordinance no. 102/14.11.2013 which finally removes this limitation.
We believe you’ll welcome this change and the other amendments brought to the Romanian tax legislation as we do and we hope you’ll find Romania a better place to conduct your business in the coming year of 2014.