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Romania: VAT registration no longer required for electricity traders on OPCOM markets

September 2013 - Projects,  Energy and Natural Resources. Legal Developments by Buzescu Ca. More articles by this firm.

Author: Corina Papuzu, Senior Associate

Starting with September 1, 2013, the VAT registration is no longer required for electricity trading on the Day-Ahead Market and Intra-Day Market operated by OPCOM, the Romanian Electricity and Gas Market Operator.

 

Until September 1, 2013, a company had to be registered as a VAT payer with the Romanian authorities in order to become a participant to the above markets. In fact, this requirement caused the exclusion from the Day-Ahead Market and Intra-Day Market of foreign companies, which did not register a Romanian subsidiary as a VAT payer.

 

The elimination of the VAT requirement by OPCOM was possible pursuant to a recent change of the Romanian Fiscal Code. The Government Ordinance no. 28 of August 27, 2013 ("Ordinance no. 28") provides that the reverse VAT taxation is applicable to the delivery of electricity to a trader which is a taxpayer. Under the provisions of Ordinance no. 28, the reverse VAT taxation is applicable to the electricity trades on the Day-Ahead Market and Intra-Day Market to which OPCOM is counterparty.

 

The above-mentioned Ordinance further provides the cumulative conditions to be complied with by a company to be considered to have the capacity of electricity trader which is a taxpayer:

 

1.                   To have a valid electricity supply license issued by the Romanian Energy Regulatory Authority, which certifies that the said buyer is an electricity trader;

 

2.         To have as  main activity the re-sale of electricity. Its own consumption of the purchased electricity must be negligible. In this respect, by December 10 of each year, it must submit to the competent tax authorities an affidavit attesting that it complies with this condition, which is valid for all electricity purchases performed in the following calendar year.

 

For the electricity purchases performed in the year when the buyer obtains a valid electricity supply license issued by the Romanian Energy Regulatory Authority, which certifies the fact that said buyer is an electricity trader, the buyer must deliver to the seller an affidavit attesting that its main activity is the re-sale of electricity, and that its own estimated consumption of the purchased electricity is negligible. Such affidavit will be valid until December 31 of the said year.

 

The representatives of OPCOM confirmed that following the issuance of Ordinance no. 28, OPCOM will no longer require the VAT registration of the traders in order to participate on the Day-Ahead Market, and Intra-Day Market.

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