Chances are high that you have found yourself in the situation of buying or even selling certain goods that you no longer use through social media or classifieds platforms like OLX. These transactions happen mostly between individuals, occasionally. However, those who regularly sell goods using social media or these classifieds sites should be aware that there is a risk of being penalized if they do not operate in a legal manner.
Nicolae M. is the reader who suggested we write about this topic, and we thank him in this way. Below we have details about the legal and tax implications that exist for those who sell various goods on Facebook, Instagram or OLX on a regular basis. Be careful though, the threshold to be exceeded as a natural person for the purpose of paying VAT is quite high, and most of us should not have any problems.
According to the publication avocatnet.ro, the online sale of goods can only be done occasionally by natural persons without establishing a legal form of organization. Thus, sales of goods used for personal purposes will not be subject to VAT. However, if the sale through these platforms is carried out consistently, the action becomes an activity for which it will be necessary to establish a company or register as a PFA. The seller is therefore considered a taxable person from a VAT perspective.
From July 1, 2021, new VAT rules for e-commerce have been applied. Georgiana Nichita, Managing Associate at Radu si Asociaţii SPRL, told avocatnet.ro:
However, the determination of merchantability is made on a case-by-case basis. Thus, this is assessed, according to the Decision of the Court of Justice of the European Union of October 4, 2018, Case C 105/17, taking into account the following aspects:
The specialist's recommendation, in order to avoid possible problems with the authorities, would be that the persons in question establish a limited liability company (SRL) or register as an authorized natural person and fulfill their related fiscal obligations< /u>.
However, for the purpose of determining VAT obligations, it must be analyzed whether the VAT registration ceiling has been exceeded. In Romania it would be 300,000 lei (approximately 61,000 euros). Costin Manta mentioned that under this ceiling, sellers would not have the obligation to register for VAT purposes, nor to collect VAT. Most of us who use such platforms occasionally should have no problems.
After exceeding the ceiling, however, the individual becomes a taxable person from a VAT perspective and will have to fulfill his VAT declaration and payment obligations.