Case studies Import of goods

Case studiesImport of goods

2

CASE 1

A Ukrainian company (A) sells computers to a regular taxable person, from Germany (B), which resells these computers to a Romanian client (C).

The goods are sent directly from the Ukrainian company to the Romanian client.

QUESTION

Determine the VAT treatment applied to the operation above. Specify the differences and detail the conditions which have to be fulfilled by each party regarding the declarative obligations for VAT.

3

CASE 1 – Solution

First hypothesis:

The Ukrainian Company A transports the goods from Ukraine to Romania (transport from A to B)

And the supplier A acts as an importer regarding the VAT

4

Case 1 – Solution

Import of goods in Romania made by the supplier from Ukraine

1. The person which fulfills the conditions (importer): supplier A

2. Operation in VAT sphere: import of goods

3. Place of import: Romania (Art. 132² (1) CF – where the goods are at their entry in the Community)

4. Exemption: NO

5. The person compelled to VAT payment: A (Art. 1511 CF ),(if A registers in VAT purpose in Romania then A will not pay effective but through VAT deduction)

5

Case 1 – Solution

Delivery made by A towards B

1. Taxable person: Ukrainian supplier A

2. Operation in VAT sphere: delivery of goods

3. Place of delivery: Romania (Art. 132 (1) (a) the second sentence – MS in which the import is made, instead of the territory where the transport starts)

4. Exemption: NO

5. The person compelled to VAT payment: A (Art. 150 (1) (a) CF, which has to register for VAT purpose in Romania, because the beneficiary is not settled in Romania, see art. 150(1)(g))

6

Case 1 – Solution

The German company delivers the computers to a Romanian client

1. Taxable person: German supplier B


3. Place of delivery: Romania (Art. 132 (1) (c) CF – where the goods are put at C’s disposal, because between B and C doesn’t exist a contractual relationship for the transport)

4. Exemption: NO

5. The person compelled to VAT payment: See the next slide

7

Case 1 – Solution

The person compelled to VAT payment, there are several situations:

- buyer C, if it’s a person settled in Romania or a non - taxable legal entity, regardless if they are or not registered according to art. 153¹ or 153 CF and the supplier B isn’t settled in Romania and is not registered according to art. 153 CF ( art. 150 (1) (g) CF);

- supplier B, (Art. 150 (1) (a) CF, if the buyer C is not settled in Romania and is not registered according to art 153, or is a nontaxable Romanian person. In this case B must register for VAT purposes in Romania.( art. 150 (1) g and art. 156³(4)(c)

8

Case 1 – Solution

Second hypothesis:

The German company B transports the goods from Ukraine to RomaniaAnd B acts as an importer from the VAT point of view, then resells

them to a Romanian client CIn the relationship B-C is no contractual

relationship regarding the transport

9

Case 1 – Solution

Import of goods in Romania made by B, the German buyer

1. The person that qualifies (importer): B

2. Operation in VAT sphere : goods import

3. Place of import: Romania (Art. 132² CF – where the goods are at their entry in the Community)

4. Exemption: NO

5. The person compelled to VAT payment: B (Art. 1511 CF )-if registered in Romania for VAT purposes will not pay effective but through VAT deduction)

10

Case 1 – Solution

Delivery of goods between B and C

1. Taxable person: German supplier

2. Operation in VAT sphere: delivery of goods, following an import

3. Place of delivery: Romania (Art. 132 (1) (c) CF – where the goods are set at C’s disposal)

4. Exemption: NO

5. The person compelled to VAT payment: B (Art. 150 (1) (a) CF - B if it’s registered for VAT purpose in Romania )

11

Case 1 – Solution

Or, if B is not registered for import,

- buyer C, if it’s a person settled in Romania or non-taxable legal entity, regardless if they are registered or not according to art. 153¹ or C is not settled in RO but is registered through a fiscal representative and the supplier B is not settled in Romania and is not registered according to art. 153 CF (art. 150 (1) (g) CF);

- supplier B, (Art. 150 (1) (a) CF, if the buyer C is not settled in Romania and is not registered according to art 153, or is a non-taxable Ro person. In this case B has to register for VAT purposes in Romania ( art. 150 (1) g and art. 156³(4)(c)

12

Case 1 – Solution

Third hypothesis :

C Company transports the goods from Ukraine to RomaniaAnd B acts as an importer from the VAT point of view

13

Case 1 – Solution

Solution: A-B, delivery of goods from Ukraine

1. Taxable person: supplier (A)

2. Operation in VAT sphere: delivery of goods ( in Ukraine is an export)

3. Place of delivery: Ukraine (Art. 132 (1) (c) CF – where the goods are set at B’s disposal)

4. Exemption: NO

5. The person compelled to VAT payment: N/A

14

Case 1 – Solution

Import of goods in Romania by B (German company which resells to C)

1. The importer person: B


3. Place of import: Romania (Art. 132² (1) FC – where the goods are at their entry in the Community)

4. Exemption: NO

5. The person compelled to VAT payment: B (Art. 1511 CF – ), which can demand the reimbursement of VAT according to the 8th Order, which is transposed in the standards, or, can register in Romania for VAT purpose and will not make the effective payment but through the deduction of VAT

15

Case 1 – Solution

Delivery of goods from B to C

1. Taxable person: German company B

2. Operation in VAT sphere: delivery of goods, after an import

3. Place of delivery: Romania (Art. 132 (1) (a) second sentence CF –MS in which the import is made, instead of the territory where the transport begins)

4. Exemption: NO

5. ……….

16

Case 1 – Solution

………5. The person compelled to pay the VAT: there are several situations:

- buyer C, if he is a person settled in Romania or a non-taxable legal entity, regardless if they are registered or not according to art. 153¹ or 53 CF, or C is not settled in RO but is registered through fiscal representative and supplier B is not settled in Romania and is not registered according to art. 153 CF ( art. 150 (1) (g) CF);

- supplier B, (Art. 150 (1) (a) CF, if the buyer C is not settled in Romania and is not registered according to art 153, or is a non-taxable RO person. In this situation B has to register for VAT purposes in Romania.( art. 150 (1) g and art. 156³(4)(c)

17

CASE 2

• A, Romanian company registered for VAT purpose according to art. 153, buys goods from an Australian company X.

• The goods are transported by A from Australia at its headquarters from Romania.

• Goods are released for free circulation by A.

• Afterwards, A sells this goods to another Romanian company B (a SME’s o amenable to a special regime).

• B takes over the goods from A’s warehouse in Romania and transports them to it’s store in Bucharest.

18

Case 2

Import of goods in Romania made by buyer A

1. The person designated as importer: (A)


3. Place of import: Romania (Art. 132²(1) CF – where the goods are at their entry in the Community)

4. Exemption: NO

5. The person compelled to pay the VAT: A (Art. 1511 CF), will not make the effective payment but through the deduction of VAT

19

Case 2

Delivery of goods: A-B

1. Taxable person: Romanian supplier (A)


3. Place of delivery: Romania (Art. 132 (1) (a) CF –were the transport starts)

4. Exemption: NO

5. The person compelled to pay the VAT: A (Art. 150 (1) (a) CF) local delivery with Romanian VA.

20

Case 3

• A, person registered for VAT purpose according to art. 153, buys fishing equipment from a American company Y .

• Goods are transported by A from USA to the headquarters in Romania.

• A acted as an importer, although knew the final client (a Swedish company C which transmitted to A it’s VAT code).

• Afterwards, A ships the goods from Romania to C, in Sweden.

21

Case 3

Import in Romania made by A

1. Person designated as importer: A


3. Place of import: Romania (Art. 132² (1)CF– where the goods are at their entry in the Community)

4. Exemption: YES (Art. 142 (l) CF, because it will follow a IC delivery)

5. The person compelled to pay the VAT: N/A

22

Case 3

Solution: A-C, from A’s point of view

• Taxable person: Romanian supplier A

• Operation in VAT sphere: IC delivery of goods

• Place of delivery: Romania (where the transport starts - Art. 132 (1) (a) CF)

• Exemption: YES (if two conditions are fulfilled: 1. transportation and 2. VAT code from another MS– Art. 143 (2) (a) CF)

• The person compelled to pay the VAT: N/A

23

Case 3

Are there any specific obligations?

A will have to report the exempt IC delivery in it’s summarizing declaration for exempt IC deliveries from Romania

24

Case 3

Solution: A-C from C’s point of view

1. Taxable person: Swedish buyer

2. Operation in VAT sphere: achizitie IC acquisition of goods

3. Place of IC acquisition: Sweden (the place where the transport ends - Art. 132¹ (1) CF)

4. Exemption: N/A


25

Case 4

• A buys medical equipment from a Canadian company Z.

• Goods are transported by A from Canada to the headquarters in Romania.

• A acted as an importer, although he knew the final client (a Hungarian hospital).

• Afterwards, A ships the goods from Romania to D in Hungary.

26

Case 4

Import of goods in Romania made by A

1. The person that qualifies (importer): A


3. Place of import: Romania (Art. 132² CF – where the goods are at their entry in the Community)

4. Exemption:

- YES, if the import is followed by an IC delivery free of taxes (Art. 142 (l) CF)

- NO, if the import is not followed by an IC delivery free of taxes

5. The person compelled to pay the VAT: if no Exemption is applied, A (Art. 1511 CF)

27

Case 4

• Hypothesis 1: D, the HU hospital, overtakes the ceiling for IC acquisitions in HU or has chosen for the rating of IC acquisitions in HU (therefore is registered for IC acquisitions)

Solution: A-D from A’s point of view

1. Taxable person: A

2. Operation in VAT sphere: IC delivery of goods

3. Place of delivery: Romania (Art. 132 (1) (a) CF – where the transport starts)

4. Exemption: YES (Art. 143 (2) CF)


Import made by A will be exempt from VATImport made by A will be exempt from VAT

28

Case 4

Are there any specific obligations?

A has to report the exempt IC delivery in it’s summarizing declaration for exempt IC deliveries

29

Case 4

• Hypothesis 1: D, the HU hospital, overtakes the ceiling for IC acquisitions in HU or has chosen for the rating of IC acquisitions in HU (therefore is registered for IC acquisitions)

• Solution: A-D from D’s point of view (in HU)

1. Taxable person: D, the hospital

2. Operation in VAT sphere: IC acquisition of goods

3. Place of IC acquisition: Hungary (the place where the shipping ends - Art. 132¹ (1) CF)

4. Exemption: N/A


30

Case 4

• Hypothesis 2: D, does not overtake the ceiling for IC acquisitions in HU and didn’t choose for the rating of IC acquisitions in HU AND A does not overtake the ceiling for distance selling towards HU and didn’t choose for the taxation of this deliveries in HU, according to the rules applied to long distance selling

Solution: A-D, delivery made by A from Romania

1. Taxable person: A

2. Operation in VAT sphere: IC delivery of goods


4. Exemption: NU

5. The person compelled to pay the VAT: A (Art. 150 (1) (a) CF) with Romanian VAT

31

Case 4

• Hypothesis 3: D, does not overtake the ceiling for IC acquisitions in HU and didn’t choose

for the rating of IC acquisitions in HU BUT A overtakes the ceiling for long distance selling

towards HU or chose for the taxation of this deliveries in HU, according to the rules applied

to long distance selling

Solution: A-D, delivery made by A from RO in HU

1. Taxable person: (A)

2. Operation in VAT sphere: NON TRANSFER

3. Place of delivery: Hungary (the place where the transport ends - Art. 132 (5) CF)

4. Exemption: N/A

5. The person compelled to pay the VAT: N/A (A has to register in HU in VAT purposes and to make a local delivery with Hungarian VAT)

32

Case 4

What would have happened if, in the fourth case, the client D would have been a public institution which acts as an importer?

33

Case 4

Import made by a public institution in another MS

1. The person that qualifies (importer): D


3. Place of import: Romania (Art. 132² (1)CF –where the goods are at their entry in the Community)

4. Exemption: NO

5. The person compelled to pay the VAT: D (Art. 1511 CF)

D can ask for the reimbursement of RO VAT paid for the import, If the acquisition of these goods is compelled to VAT in HU

D can ask for the reimbursement of RO VAT paid for the import, If the acquisition of these goods is compelled to VAT in HU

34

Case 4

Solution: D regarding the arrival of goods in Hungary

Hypotheses 1: D overtakes the ceiling for IC acquisitions in Hungary or has chosen for the taxation of the acquisitions in Hungary

1. Taxable person: D

2. Operation in VAT sphere: IC acquisition

3. Place of the operation: Hungary (equivalent to art. 132¹ (1) CF from Hungarian legislation – where the transport ends)

4. Exemption: N/A


D can ask for the reimbursement of RO VAT paid at the importD can ask for the reimbursement of RO VAT paid at the import

35

Case 4

Solution: D regarding the arrival of goods in Hungary

Hypotheses 2: D does not overtake the ceiling for IC acquisitions in

HU and didn’t choose for the rating of IC acquisitions in HU

1. Taxable person: the public institution from HU (D)

2. Operation in VAT sphere: NO

3. Place of the operation: N/A

4. Exemption: N/A


D cannot ask for the reimbursement of RO VAT paid at the importD cannot ask for the reimbursement of RO VAT paid at the import

36

Case 4

IMPORTANT OBSERVATION

The delivery of goods with transport (assimilated) from Ro (MS in which the import is made) in Hungary (MS of the arrival of goods) must be kept in mind when the overtake or future overtake of the IC acquisition ceiling in HU is being established, performed by the non-taxable legal entity (D)

37

Case 5

• To buy goods from a Russian company Q. The goods are transported by A from Russia to Romania.

• A already knows the final client (a company from Luxemburg L). The goods are placed under suspensive custom regime (for example a regime for temporary admission followed by an external transit).

• A sends the goods from Ro to Luxemburg, where L performs the custom and VAT formalities.

38

Case 5

The company from Romania - A, places the goods into a suspensive regime at their entry in Ro, although an import of goods takes place, because goods are entering the Community, the import doesn’t take place in Romania (Art. 132² (2) CF), because the goods are placed under a suspensive regime.

39

Case 5

Delivery of goods placed under a suspensive regime made by the Romanian company A towards the L company from Luxemburg

1. Taxable person: (A)



4. Exemption: YES (Art. 144 (1) (b) CF), ATTENTION! Being a delivery of goods in suspensive regime is not exempted as delivery IC according to art. 143(2),( see that in Luxemburg will not take place a taxable acquisition IC)


40

Case 5

Solution: A-L, from L’s point of view, the company from Luxemburg

1. Persoana impozabila: L

2. Taxable person: import of goods (but also a non-taxable acquisition IC)

3. Place of the operation: Luxemburg (equivalent to Art. 132² (2) CF – were the goods cease to be placed under a suspensive regime)

4. Exemption: N/A(NO, in Luxemburg the importul is taxable but AIC is non-taxable, equivalent to art.126(8)(d) CF)

5. The person compelled to VAT payment: N/A( in Luxemburg the payment for VAT is made by the importer- L).

Documents

Case studies Import of goods