VAT Refund in Romania to EU and non-EU Companies

Starting January 1st, 2014 the obligation of EU and non-EU companies to provide proof of payment in order to be granted the refund of VAT claimed in Romania was abolished by the Government of Romania in an effort to align the Romanian VAT legislation to the less restrictive conditions provided by EC Directive 112/2006, EC Directive 2008/9 and EC Directive 86/560.

This change was brought by the notification received by Romania from the European Commission (EU Pilot 3927/2012/TAXU) regarding the incorrect implementation in its national law of the European Council’s Directives. The proof of payment condition was deemed by the Commission as not compliant with the EC’s VAT Directives, therefore, in order to avoid infringement, proceedings being started against it, Romania eliminated this provision from its legislation beginning with 2014.

Thus, for claims submitted after 1 January 2014, companies will no longer be required to provide proof of payment of the VAT amounts requested for refund. This also applies to claims submitted in 2013, but analyzed by the Romanian tax authorities after 1 January 2014.

Although this is good news for all EU and non-EU companies carrying out business activity in Romania in the future, the problem of claims filed for previous years that were rejected due to non-fulfillment of the payment condition persist. This important matter was addressed this month by the Romanian Government – a new provision was included in the Norms for the Application of the Romanian Tax Code in February 2014, which states that invoices issued during the period 1 January 2009 – 31 December 2013 and included in VAT claims rejected by the Romanian tax authorities because they were either unpaid, only partially paid or paid but the company could not provide sufficient proof of their payment may be included in a new VAT claim now, which should be submitted to the tax authorities no later than 30 September 2014. This rule applies both to VAT claims on the 9th Directive and the 13th Directive.


Source: IVA International VAT Association

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