If you own a business in which you operate or intermediate the sale of products via marketplaces, you must know that Romanian authorities have implemented, and are planning to implement new rules regarding this type of activity in the Romanian legislation.
Specifically, at this moment we are talking about 3 important aspects that will impact the sale of products or the provision of services through online platforms, and which are important to keep an eye on during next period, to ensure your company’s compliance with them.
We detail them briefly, below:
1. Implementation of the European Regulation 1,150/2019 provisions
At the beginning of April, the Romanian Government published the Emergency Ordinance (GEO) 23/2021, which implements certain rules provided by the European Regulation 1,150/2019. The provisions of this EU Regulation are already applicable in all EU Member States, so including in Romania, since July 2020. However, there were still some aspects that each Member State had the obligation to implement individually.
Thus, GEO 23/2021, which is in force since April 12, 2021, comes to establish and apply at least two important aspects, namely:
It determines who is the competent authority on the territory of Romania, for market surveillance and application of sanctions
According to the provisions of the above mentioned ordinance, the competent authority in Romania that will take care of the application of the provisions of the European Regulation mentioned above will be the Competition Council. The same authority will be responsible for controlling and application of fines, as well as for applying the corrective measures in the market (where the practice of companies will have to be corrected).
What sanctions can the Competition Council apply?
An important detail to keep in mind is that the competent authority (i.e., the Competition Council) has the right to impose fines that can reach 1% of the company’s turnover. However, if an accumulation of infringements is identified, a maximum amount of 2% of turnover may be set.
As an example, if you operate such an online marketplace and the Competition Council concludes that you are not promoting your own products transparently, to the detriment of other traders enrolled in your platform, the authority may impose a fine of up to 1% of your company’s turnover.
2. Obligation to draw up and keep VAT registers
In addition to the aspects described above, the Romanian authorities are also planning changes to be introduced in the Romanian Fiscal Code starting with July 1, 2021. Specifically, these changes concern VAT and will be implemented through an Ordinance which is waiting to be adopted by the Government, and published in the Official Gazette very soon.
This ordinance will lay down certain rules on the obligation of companies who deliver goods or provide services to non-taxable persons via online marketplaces to keep special VAT records.
More precisely, this means that any business who intermediates the sale of products via marketplaces, including the delivery of services through such online platforms, will be required to keep special VAT records for all transactions in which the delivery or supply is made to non-taxable persons. Also, the obligation will apply only if the respective deliveries or services will be taxable in Romania.
According to the provisions of the draft ordinance, the respective VAT registers will have to contain detailed information on the transactions that are subject to this obligation, so that, during a control, the tax authorities can verify if the VAT has been reflected correctly.
These special registers will have to be kept for 10 years in electronic format, according to the text of the draft ordinance. If requested by the authorities, they will have to be made available to them for verification, also in electronic format.
3. Implementation of DAC7 – revenues from sale of products via marketplaces will have to be reported to tax authorities
In addition to the above, you should know that the authorities will very soon introduce new provisions in the Romanian legislation that are already in place at EU level through the European Directive DAC7. This new European Directive stipulates that revenues derived by companies from the sale of products via online marketplaces, or from delivery of services, will have to be reported annually to the competent authority in each member country (in Romanian this is ANAF). The reporting obligation will sit with the operators managing those online platforms.
The provisions of the EU Directive (more precisely, we are talking about the Directive no. 2021/514 of the European Council) will have to be transposed into national law by each member state of the European Union, therefore by Romania as well, by the end of 2022, so that they can be applied starting with January 1, 2023.
Thus, with this new reporting obligation, the authorities of each Member State will become more efficient in identifying the revenues obtained by companies through online platforms. Thus, they will tax all these revenues, if they are declared by the taxpayers.
According to the directive, the reporting obligation will apply annually. This means that, for the first reporting year (which will be 2023), the declaring obligation will have a deadline on 31 January 2024.
These changes will thus introduce an additional obligation for digital platform operators that they will have to adapt to – the obligation to report revenue generated by sellers on their platforms. Authorities in each of the EU member states will also have an obligation to exchange such information automatically between them.
DAC7 targets the revenues generated by companies from the sale of products, but also from the provision of services, the rental of real estate, and the rental of any type of transport vehicle via online platforms.
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