The National Agency for Fiscal Administration (ANAF) has been applying for several years the principle taken from the jurisprudence of the Court of Justice of the European Union, which states that when VAT evasion takes place, the parties involved in the transaction "knew or should have known "that he is participating in tax evasion.
Starting with January 1st, 2018, the Tax Code specifically grants ANAF the right to refuse VAT deduction if it demonstrates, beyond any doubt, that a company knew or ought to have known that the acquisition was involved in a VAT fraud, regardless of the stage in the supply / service chain in which it intervened. The same principle applies to intra-community deliveries, especially for goods that are transported outside Romania by the customer. In this case, the suspicions that might arise over a legal person in the absence of customer verification may lead to the cancellation of the application of the VAT exemption to the extent that the customers do not transport the goods in another EU Member State.
Thus, it becomes absolutely necessary to regularly check the risk potential of business partners. Companies are required to demonstrate that they have conducted reasonable investigations into their business partners, for example on tax status, reputation, procedural history, debts, headquarters, number of employees. All of these checks should highlight whether there may be suspicions of VAT fraud at the level of business partners.
Authorities believe that those companies that have not done a due diligence in their business relationships are negligent, negligence that can make them suspicious. Beyond the interpretation of legislation, which is the subject of many administrative appeals and litigation with the authorities, it is difficult to meet the requirement to be diligent in contractual relations to prevent potential disputes and risks.
The question "what concrete measures can a company take and what criteria should it follow when checking its partners?" finds an incomplete answer in the Romanian tax legislation and fiscal practice.
The tools provided by ANAF allow verification of VAT codes / business partner information.
Thus, the two existing registers at the ANAF (Registry of Taxpayers inactive or reactivated, respectively the Register of taxable persons registered for VAT purposes) or with other sources of information - overdue tax liabilities, lack of employees, headquarters, etc. can be checked.
However, even these criteria are questionable, because it does not always reveal the real situation of the verified company, in practice there are cases in which the information is not updated in real time. Moreover, it involves a detectivist activity involving the allocation of costsand human resources. Finally, this effort may not work, and a seemingly correct partner may later prove to be fraudulent or vice versa. But all this effort helps companies to argue that they have done reasonable checks, and the information available have indicated a fair character of the business partner.