Law nr. 33/2024 for amending and supplementing Law no. 227/2015 regarding the Fiscal Code

On March 5th 2024, Law nr. 33/2024 for the amendment and completion of Law no. 227/2015 regarding the Fiscal Code was published in the Official Gazette.

CESOP

One of the main changes to the Fiscal Code refers to the introduction the CESOP reporting obligation (Central Electronic System of Payment Information). By adopting this law, the provisions of Directive (EU) 2020/284 of the Council of the European Union amending Directive 2006/112/EC as regards the introduction of certain requirements for payment service providers are transposed into national legislation, with applicability from 1st January 2024.

The objective of the implementation is to combat the VAT fraud in e-commerce, by establishing obligations to keep records on cross-border payments and their beneficiaries and to make these records available to tax authorities by the payment service providers, (credit institutions, electronic money issuing institutions, giro postal service providers and payment institutions).

The reporting obligation rests, in principle, with the beneficiary's payment service provider, if this provider is located in a Member State, but if it is located in a third country the CESOP reporting obligation falls to the payment service provider payment of the payer.

Moreover, the reporting is necessary to the extent that the following criteria are met:

• The payer is located in the European Union;
• The payment is cross-border (the payer is in an EU Member State and the beneficiary is in another Member State, in a third territory or in a third country);
• More than 25 cross-border payments were processed to the same beneficiary in a calendar quarter.

The reporting will be quarterly, no later than the end of the month following the calendar quarter, which means that the first reporting should be performed no later than 30 April 2024, for the first quarter of this year. Regarding the reporting method, Law no. 33/2024 is limited to specifying that this will be done through a standard electronic form, however, the secondary legislation has not yet been published.

The payment service providers must keep the electronic record of payments for 3 years from the end of the calendar year in which the payment occurred.

The rules for determining the location of the payer, the relevant terms for reporting CESOP and the information to be contained in the records of payment service providers are laid down.

Adjustment of the VAT taxable base

Another amendment to the Fiscal Code refers to the adjustment of the VAT taxable base in case of price reductions, in the sense that the adjustment becomes applicable for price reductions granted after supply/provision, regardless of whether or not they were granted directly to the customer. Thus, the national legislation is harmonized with art. 90 para. (1) of the VAT Directive and the jurisprudence of the Court of Justice of the European Union.

For price reductions that are not granted directly to customers, the obligation for suppliers to issue a centralizing document is introduced in order to reduce the VAT collected at the level of each period.

Also, the amendments regarding the adjustment of the taxable base for price reductions require a reanalysis of the conditions for granting price reductions and supporting documents, both at the level of suppliers and beneficiaries.

Other amendments

Law no. 33/2024 also clarifies the deadline for submitting the specific statements related to the special VAT regimes, this being the last calendar day of the month, even if it is a non-working day.

Moreover, the provisions regarding the possibility of appointing an authorized tax representative to fulfill the VAT obligations of taxable persons not established and not registered for VAT purposes in Romania are repealed, given that these obligations can be fulfilled through a tax representative.

Customs and Excise duties

In the matter of excise duties and other special taxes, in order to ensure a treatment similar to electricity and natural gas consumption, in the case of consumption used to maintain the capacity to transport and distribute natural gas, within the limits set by ANRE, there is no obligation to pay excise duties.

Finally, the provisions of the Fiscal Code regarding the revocation of the certified recipient or consignor attestation are repealed, as the procedure and conditions for solving appeals in these situations is regulated by order of the President of the Romanian Customs Authority.

Conclusions:

Considering that the deadline for the first CESOP reporting is near (30 April 2024), and the procedure for keeping and transmitting to the tax authorities the information specific to this reporting has not yet been published, we recommend payment service providers in Romania to analyze the new provisions and to constantly monitor the conditions in which the reporting will be made. The EY team can assist you in this regard, in order to understand the new requirements, identify the payments that fall within the scope of this reporting and implementation in optimal conditions.

For more details, please consult the Official Gazette no. 179 published on 5th March 2024.

Furthermore, the EY team is available for further details regarding the other changes to the Fiscal Code mentioned above.