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Reverse Charge for Supply of Grains and Crops to Benefit Cereal


In an attempt to diminish the VAT evasion related to sale of crops and grains, the Romanian Government addressed the issue with the European Union and requested for derogation regarding the implementation of simplification measures. Simplification measures were introduced. Taxand Romania highlights the reverse change VAT regulations on grains and crops.

Following this initiative, Government Emergency Ordinance amended the article dealing with simplification measures and introduced the sale of grains and crops.

Internal sales of grains and crops are, starting 31 May 2011, subject to simplification measures, whereby the related VAT is accounted for under the reverse charge mechanism by the beneficiary (i.e. a taxable person registered for VAT purposes in Romania). The measure is intended to be applied until 31 May 2013.

Taxand's Take

The introduction of the simplification measures should provide a cash flow benefit especially for the Romanian companies involved in cereal trading. It remains to be seen whether the projected VAT revenue budgeted by the Ministry of Finance for the application period of the measure will become fact.

Your Taxand contact for further queries is:
Angela Rosca
T. +40 21 316 06 45

Taxand's Take Author