30.10.2024

VAT WHEN PURCHASING FROM ROMANIA THROUGH AN ONLINE PLATFORM

Many companies buy goods through a Romanian online trading platform. Therefore, in the "Law consultation" column, we present the position of the National Revenue Agency on what is the procedure for paying VAT in these cases.

Purchases from Romania through an online platform

A company buys an office chair through an online platform from a company in Romania. Initially, a VAT invoice was sent with the delivery of the chair. A telephone conversation was held with the online platform, in which it was explained that this invoice does not meet the requirements of Bulgarian legislation and VAT should not be charged, but the company needs to issue a protocol under Article 117 of the VAT Act and charge VAT. The Romanian company sends a second invoice for the sale of the chair, but again with VAT charged on it. The Bulgarian company again alerted the online platform via email, but no response was received. The company has the possibility to request a refund of the tax paid through the NRA platform, but cannot reflect the invoice in the VAT journals, as it is not a tax document.

The following question was asked: How should the Bulgarian company proceed in the described case?

Article 13 of the Value Added Tax Act (VAT act) comprehensively specifies the scenarios in which there is an intra-community acquisition. According to paragraph 1 of the same legal norm, intra-community acquisition is the acquisition of the right of ownership of goods and any other right to dispose of the goods as the owner, as well as the actual receipt of goods in the cases under Article 6, paragraph 2, which sends or transports to the territory of the country from the territory of another member state, when the supplier is a taxable person who is registered for VAT purposes in another member state.

The intra-community acquisition tax is charged by issuing a protocol no later than 15 days from the date on which the tax became due - art. 117, para. 1, item 1 in connection with para. 3 of VAT act.

The invoice issued by the trader from another EU member state to the Bulgarian trader on the occasion of the intra-community transaction should not contain the amount of the tax.

In the event that an invoice is issued by a registered person in another member state and the Bulgarian company is the recipient and the conditions of Article 13, Paragraph 1 of VAT act are met, for the Bulgarian company there will be an intra-community acquisition, regardless of whether in the issued VAT (at the applicable rate for the respective member state) is indicated on the foreign supplier's invoice.

The rules on the taxation of VAT on intra-Community acquisitions cannot, in principle, lead to a situation where tax is charged to both the supplier and the recipient. Similar cases can only occur in the absence of good commercial communication, or incorrect application of the tax law.

In the event that during an intra-Community acquisition, albeit unlawfully, VAT has been charged by the supplier, the entire amount documented by the supplier (the sum of the tax base and the tax charged to him) should be taken as the tax base of the intra-Community acquisition. Since, according to Art. 64, Para. 1 in conjunction with Art. 26 of VAT act, the tax base of an intra-Community acquisition is determined on the basis of everything, which includes the remuneration received by or payable to the supplier by the recipient in connection with the delivery without the tax under this law, and the amount charged as VAT is not a tax "under this law", the same should be included in the tax base of an intra-community acquisition. In the event that the tax amount is subsequently recovered by the supplier to the recipient as unduly paid, it should be make a correction by issuing a protocol under Article 117, Paragraph 4 of the VAT Act, based on a corrected document issued by the supplier (credit note or canceled erroneous and issued new invoice).