Newsletter no. 6/2020 – Justifying documents for intra-Community supplies of goods

General aspects

In the Official Gazette no. 628 from 17 July 2020 was published the Order of the Ministry of Finance no. 2148/2020 regarding the amendments and completion of the Instructions for the application of the VAT exemption for exports and intra-Community supplies of goods, instructions previously approved by the Order of the Ministry of Finance no. 103/2016.

The Order aligns national VAT legislation with the provisions of the EU Council Regulation 2019/1912 (“the Regulation”) in regard of the documents requested to justify the intra-Community transport for the intra-Community supplies of goods.

We remind you that the legislative amendments brought by the EU Regulation 2018/1912 are in force and produce effects starting with January 1, 2020 and we detailed this subject in Newsletter no.1/2020.

We present below the main amendments brought by Order 2148 regarding the conditions for granting the VAT exemption for intra-Community supplies of goods, more precisely to the supporting documents for proving the transport of goods from one Member State to another.

VAT exemption of intra-Community supplies of goods

In this context, we will present below the documents justifying the VAT exemption in the case of intra-Community supplies of goods, depending on the person responsible for the transport (Incoterms conditions) and possible affiliation of the carriers of the goods with the other parties involved in the transaction. 

Please note that the documents required to justify the transport provided by the Regulation must be obtained (and made available to the tax authorities, in the event of a tax audit) for all intra-Community supplies made from 1 January 2020, including for those made before the entry into force of Order 2148, respectively 17 July, 2020 (with certain exceptions presented below). If these documents (as listed below) cannot be presented cumulatively, please note that the VAT exemption cannot be applied for the intra-Community supplies of goods (and, in consequence, the respective transactions will be subject to VAT).

The deadline for submitting the supporting documents for the application of the VAT exemption, previously set at 90 days, was extended to 150 calendar days from the date of delivery of the goods. Please note that the new deadline also applies for the buyer’s written statement, to which we refer below, and which, according to the Regulation, had to be received from the buyer by the tenth day of the month following the supply.

1. If the transport is the responsibility of the supplier, the transport shall be proved by the supplier with the following documents:

• CMR signed by the client for receiving the goods or consignment note or bill of lading (for transport on water) or the specific air transport document (Air Waybill); and

• Invoice from the carrier of the goods (from the actual carrier or from the freight forwarder, if the actual carrier has not invoiced directly); and

• One of the following documents: bank documents proving the payment for the transport of the goods or insurance policy with regard to the respective transport of the goods or a document issued by a warehouse keeper in the Member State of destination, confirming the storage of the goods or official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the Member State of destination.

2. If the transport is the responsibility of the client, the transport shall be proved by the supplier with the following documents:

2.1 If the transport invoice is issued by a freight forwarder, independent of the actual carrier, as well as of the seller and the buyer:

• CMR signed by the client for receiving the goods or consignment note or bill of lading (for transport on water) or the specific air transport document (Air Waybill); and

• One of the following documents: invoice issued by the freight forwarder or bank documents proving the payment for the transport of the goods or insurance policy with regard to the respective transport of the goods or a document issued by a warehouse keeper in the Member State of destination, confirming the storage of the goods or official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the Member State of destination; and

• A written statement from the client, stating that the goods have been transported on behalf of the buyer, and identifying the Member State of destination of the goods.
  Mandatory elements: the issue date, the buyer’s name and address, the nature and quantity of the goods, the date and place of receipt of the goods and the identification details of the person who accepted the goods in behalf of the buyer.

In addition, it is advisable for the supplier to obtain written confirmation from the buyer that is independent from the freight forwarder, as well as that the latter is independent of the actual carrier.

2.2 If the transport invoice is issued by the actual carrier (as stated in CMR), independent of the supplier and buyer:

• CMR signed by the client for receiving the goods or consignment note or bill of lading (for transport on water) or the specific air transport document (Air Waybill) or invoice from the carrier of the goods; and

• One of the following documents: bank documents proving the payment for the transport of the goods or insurance policy with regard to the respective transport of the goods or a document issued by a warehouse keeper in the Member State of destination, confirming the storage of the goods or official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the Member State of destination; and

• A written statement from the client, stating that the goods have been transported on behalf of the buyer, and identifying the Member State of destination of the goods.
  Mandatory elements: the issue date, the buyer’s name and address, the nature and quantity of the goods, the date and place of receipt of the goods and the identification details of the person who accepted the goods in behalf of the buyer

In addition, it is advisable for the supplier to obtain written confirmation from the buyer that is independent of the actual carrier of the goods.

3. If the transport is carried out with own means of transportation by the supplier or by the client, the transport shall be proved by the supplier with the following documents:

• CMR signed by the client for receiving the goods or consignment note or bill of lading (for transport on water) or the specific air transport document (Air Waybill); and

• One of the following documents: a written statement from the client, stating that the goods have been transported, in the Member State of destination of the goods or insurance policy with regard to the respective transport of the goods or official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the Member State of destination or a document issued by a warehouse keeper in the Member State of destination, confirming the storage of the goods.
  Mandatory elements for the written statement from the client: the issue date, the buyer’s name and address, the nature and quantity of the goods, the date and place of receipt of the goods and  the identification details of the person who accepted the goods in behalf of the buyer

For the case in which the transport is performed by the client with its own means of transportation, it is necessary to present a document stating that the means of transportation are owned by the respective client or have been made available to him through leasing, rental or commodatum lease agreements.

Exceptionally, for intra-community supplies made before the date of entry into force of Order 2148, respectively July 17, 2020, if the supplier can prove it classifies to this situation, the provisions of national legislation applies (i.e., Order 103/2016, applicable at the transaction date), meaning that the supplier has to prove the transport only with a document related to the transport of the goods (i.e., CMR).

4. If the parties involved in the transport of the goods are not independent of each other, as well as of the seller or the buyer or their independence cannot be proved, the transport shall be proved by the supplier with the following documents:  

• CMR signed by the client for receiving the goods or consignment note or bill of lading (for transport on water) or the specific air transport document (Air Waybill) or invoice from the carrier of the goods; and

• One of the following documents: a written statement from the client, stating that the goods have been transported, in the Member State of destination of the goods or bank documents proving the payment for the transport of the goods or insurance policy with regard to the respective transport of the goods or official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the Member State of destination or a document issued by a warehouse keeper in the Member State of destination, confirming the storage of the goods.
  Mandatory elements for the written statement from the client: the issue date, the buyer’s name and address, the nature and quantity of the goods, the date and place of receipt of the goods and the identification details of the person who accepted the goods in behalf of the buyer

In cases where the supplier cannot prove independence between the parties involved in the transport of the goods, he must be able to prove that he has requested and taken action to obtain the necessary information. Similarly, if the parties involved are affiliated, the supplier must obtain from the buyer a written confirmation of the affiliation relationship, such as an affidavit.

Exceptionally, for intra-community supplies made before the date of entry into force of Order 2148, respectively July 17, 2020, if the supplier can prove it classifies to this situation, the provisions of national legislation applies (i.e., Order 103/2016, applicable at the transaction date), meaning that the supplier has to prove the transport only with a document related to the transport of the goods (i.e., CMR).

5. In the case of transfer of the goods, assimilated to an intra-Community supply of goods, made by a company in its own behalf, the VAT exemption is justified based on the following documents:

• Self-invoice in which is mentioned the VAT number assigned in another Member State of the person making the transfer from Romania; and

• A document related to the transport of the goods, such as: CMR signed by the client for receiving the goods or consignment note or bill of lading (for transport on water) or the specific air transport document (Air Waybill).

In order to have an efficient communication, we established a direct link with the related department. For the subject of the current Update, the requests for tax consultancy may be sent to tax@crowe.ro with a brief description of the query. One of our consultants will answer or contact you shortly.

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