The period of application of the reverse charge mechanism in relation to operations involving goods and services at risk of fraud was extended until 30 June 2022. The Council of the European Union adopted this measure to combat fraud in the field. Among the products subject to reverse charge in Romania are cereals, mobile phones and real estate. This measure was only valid until December 31, 2018, before the EU Council decided to extend the deadline.
According to the latest study on VAT collection launched by the European Commission, the amount of VAT losses at EU level amounted to 147.1 billion euros in 2016, out of which 6.13 billion euros just lost to the Romanian budget, which represents a VAT collection of 35.88%, the highest of all EU Member States. In this context, the expansion of reverse charge for fraud risk operations up to 30 June 2022 is a useful and accurate measure to combat VAT fraud. Similarly, the NAFA digitization, with an emphasis on implementing the SAF-T protocol, could be a modern way to collect VAT using IT technologies. We expect the Ministry of Public Finance to transpose the Directive into local legislation as soon as possible “,
Romania has agreed to this measure that allows EU Member States that meet specific conditions to apply a generalized reverse charge mechanism in relation to the supply of goods and services by June 30, 2022. The reverse charge may apply in the case of goods and services exceeding the threshold of EUR 10,000 on the invoice.
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Ionut is the Managing Partner and the founder of Tax Representation. He is a Fulbright scholar, holding a B.A. Finance, a JD and a MS in International Tax at Bentley University. Ionut has 20 years of experience in Romanian and international tax with a focus on foreign investments into Romania, tax controversy and litigation, M&A and international tax structuring.