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Tax alert no. 29 - August 2019

In this issue:

Non-EU established companies can no longer act as exporters in Romania, even if using indirect customs representation method

According to Order no. 2254/2019, starting with August 22, 2019, economic operators not established in the European Union can no longer perform export operations in Romania, even if the indirect representation method is used. Specifically, they can no longer be mentioned in box 2 of the customs declaration as exporter.

According to the Union Customs Code, "established" person means any person who has a legal registered office, head office or permanent establishment in the customs territory of the Union. The permanent establishment is a fixed place of activity, where both the human and technical resources are permanently present and through which, in whole or in part, the customs operations of a person are carried out.

As these companies will no longer be able to appear in box 2 of the customs export declaration, the export VAT exemption they would benefit from exporting from Romania will most probably be rejected in practice by tax authorities.

Through this change, Romania is aligned with the requirements of the Union Customs Code, joining the other Member States that have already implemented the measure.

Kindly note that the Romanian Customs Declaration Processing System "RCDPS" has not been updated yet to restrict these kinds of operations. Thus, the risk to perform a non-compliant export expedition is in practice increased.


How does the new Order influence your company activity?

If you carry out exports from Romania and your company is not established in the territory of the European Union, starting with August 22, 2019, you will no longer be able to act as an exporter, even if you use the indirect representation method.


Prepared by:
Mihai Petre, Director Indirect Tax


For additional information, please contact:
Alex Milcev, Partner – Head of Tax&Legal


Ernst & Young SRL

Bucharest Tower Center Building,

22nd Floor, 15-17 Ion Mihalache Blvd.,

Sector 1, 011171, Bucharest, Romania

Tel: (40-21) 402 4000, Fax: (40-21) 310 7124

Email: office@ro.ey.com

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