Romania

VAT Basics

VAT Deduction Limits in Romania

Input VAT is generally deductible as long as the goods or services are used for business purposes.

Unlike most EU countries, Romania only restricts VAT deduction on a few items. In general, input VAT incurred in the course of a business in hotel and other travel expenses, advertising, attendance to conferences, purchase of vans and trucks (vehicles with a maximum authorized mass exceeding 3,500 kg or more than 9 seats, including the driver's seat), are 100% deductible.

The following supplies are subject to special rules concerning input VAT deduction:

• Input VAT from business gifts when the individual value is higher than RON 100 are not deductible.
• Alcohol and tobacco, unless they are used as part of the business’ taxable transactions are not deductible.
• The purchase of vehicles is limited to a deduction of 50%. However, for certain activities the 100% of input VAT deduction is allowed provided that the conditions can be certified, e.g., vehicles used exclusively for emergency services, security and protection services and courier services; vehicles used by sales and purchasing agents; or vehicles used for the transport of persons, including taxi services; etc.

A valid and fully compliant VAT invoice must be issued for each expense on which VAT is deducted.

The VAT deduction limits in Romania are regulated in

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Statute of Limitations in Romania

The statute of limitations in Romania is five years.

The statute of limitations period determines the periods on which the tax authority can go back to review the information declared, and apply additional VAT assessments, penalties or interests. However, please consider that in case of fraud or fiscal evasion, the re-assessment from tax authorities may go back up to 10 years.

Also, the statute of limitations determines the period a taxpayer can voluntarily correct any errors on past submissions, and deduct input VAT.

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Tax Point Rules in Romania

The tax point is the time by when VAT becomes due. VAT due should be distinguished from VAT payable. VAT is due when the tax point occurs. VAT is payable between the day after the end of the reporting period and the due date to submit and pay the VAT return.

• General rule: VAT becomes due when the goods are put at the customer’s disposal, or when the services are completed.  
• Prepayments or advanced payments: the tax point is at the moment of receiving the prepayment or deposit.
• Intra-Community transaction: Tax point occurs on the invoice date or the 15th day of the month following the month in which the invoice was issued, whichever occurs earlier.

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VAT Registrations and Simplifications in Romania

When Do I Need a Romanian VAT number?

Generally, a foreign business must register for VAT in Romania as soon as a taxable supply is made. The following are the usual examples of taxable transactions:

• Domestic supply of goods not reverse charged: A supply of goods located in the Romania where reverse charge does not apply requires a VAT registration of the supplier.
• Supply of services not reverse charged: Foreign non-established businesses supplying services on which Romanian VAT is due by the supplier must register for VAT. These services are rather exceptional, as the general B2B rule would apply.
• Export: Exporting goods to a non-EU country requires a VAT number before the export is made.
• Intra-Community acquisition: Acquiring goods from another Member State where all conditions for intra-Community movements are met requires the customer to register for VAT.
• Intra-Community supply: Supplying goods to another Member State is also a taxable transaction that obliges the supplier to register for VAT.
• Distance sales: When applicable in case the Seller has not joined OSS. Please refer to the E-commerce manual for more information.

There is a registration threshold for Romanian established companies amounting to RON 300,000, and EUR 88,500, however, VAT registration is optional for these businesses. Non-established businesses may only avoid the VAT registration in certain specific scenarios:

• Occasional supplies of services in Romania, unless the transaction involves the intra-Community acquisition of goods.
• Occasional supplies of goods in Romania, except for distance sales and supplies following an intra-Community acquisition of goods in the country.

Occasional supplies are considered those with a frequence of maximum once a year.

Tax authorities may register taxable persons liable for VAT in Romania even they have not applied for it.

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Fiscal Representative Requirements in Romania

For businesses established in the EU the appointment of a Romanian fiscal representative is optional. However, non-EU businesses need to appoint a fiscal representative when registering for VAT purposes in Romania. The fiscal representative must be established in Romania and will be liable for all the operations of the foreign company in Romania.

Marosa provides the fiscal representation services through local partners.

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VAT Groups in Romania

Romanian VAT groups only allow for the consolidation of the VAT position of the members, whereas the intra-group transactions follow the usual VAT rules, i.e., they are not disregarded for VAT purposes.

A VAT group may be formed by taxable persons closely bound by financial, economic, and organisational links. These requirements are considered as met when the same person or business directly or indirectly holds more than 50% of the capital of the rest of the members. In addition, the following VAT grouping rules apply in Austria:

• Romanian VAT grouping is optional.
• Members of the group submit separate VAT returns, and only the representative of the controlling entity will submit an additional consolidated VAT return on behalf of the group.
• Intra-group transactions are not disregarded for VAT purposes.
• Every group member is jointly and severally liable for the VAT debts and penalties of the entire group.
• Once the VAT group is opted, there is a minimum period of 2 years before cancelling the option.

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Consignment and Call-off stock in Romania

The EU introduced a call-off stock simplification that all EU Member States must implement. This was put into place so that businesses that operate under a consignment stock structure do not have to VAT register in the country of destination. Romania has introduced the consignment stock simplification.

Check out our article on the EU call-off stock simplified VAT Rules for more detailed information.

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Romanian Bad Debt Relief

Bad debt regime applies to scenarios where an invoice has been issued with VAT, reported in the VAT return and the VAT amount has been paid to the tax authorities but the whole price has not been collected from the customer.

This is often due to the client´s bankruptcy, insolvency, or simple missed payments to suppliers. In the EU, most countries allow to recover the VAT initially paid to the authorities, however, the conditions change from one country to another.

Romania allows for bad debt relief only in the case of bankruptcy of the client or upon the implementation of a restructuring plan approved by a court whereby the creditor's claim is modified or cancelled.

Find here further information, and under Art. 287.d) Romanian Fiscal Code.

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Romanian Import deferral and Postponed VAT Accounting

Romania has introduced a postponed import VAT accounting mechanism where import VAT can be reported as input and output VAT (reverse charged) in the VAT return instead of being paid to the authorities upon importation.

For postponed import VAT accounting to apply, a business must be VAT registered in Romania and have applied for a deferred payment license. Applicants must meet the following conditions:

• Being VAT registered for more than 1 year in Romania.
• Not having any outstanding debts with the Customs and Tax authorities.
• Have performed imports of goods for an amount of RON 50 million or more in the past 6 months.

Additionally, the postponed import VAT accounting license could be granted to:

• Authorized economic operators VAT registered in Romania.
• Taxpayers VAT registered in Romania, that have obtained a customs clearance procedure authorization.

This is regulated under Art. 326.3, 4 Romanian Fiscal Code.

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Romanian Customs and VAT Warehouses

Customs or bonded warehouses are available for goods that have not cleared customs in the EU (T1). VAT and excise duties are not due when these goods are directly placed in the Customs warehouse. As soon as they exit this regime, these amounts are due. Sales within the customs warehouse are zero-rated.

VAT warehouses are available for cleared goods (T2). These goods have already paid customs duties. The conditions are similar to those of Customs warehouses. The goods allowed are those included in Appendix V of the VAT Directive.

Finally, find on Customs’ special regimes.

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Special VAT Schemes in Romania

Find below the list of main special VAT schemes in Romania:

• The small businesses or special exemption regime. When the threshold of RON 300,000 is not exceeded, small established businesses are not required to register for VAT purposes in Romania.
• Farmers.
• Travel agents.
• Margin scheme.
• Investment gold.

The special VAT schemes applicable in Romania are regulated in Chapter XII Special regimes, art. 310 and following RO Fiscal Code.

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Reverse Charge in Romania

Reverse charge for non-established companies in Romania

According to art 194 of the VAT Directive, Member States may implement an optional reverse charge on supplies made by non-established businesses. Romania has introduced this reverse charge on supplies of goods and services located in Romania.

Where a non-established supplier supplies goods or provides services located in Romania to a taxable person VAT-registered in Romania, the domestic reverse charge applies.

The domestic reverse charge on services is rather exceptional as it would only apply where the B2B rule on services does not apply. This is, for example, the case for supplies of services connected to immovable property.

The reverse charge on supplies made by non-established companies is regulated in Art. 307.2, 3 Romanian Fiscal Code.

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Reverse charge in B2B services

Article 196 of the VAT Directive requires the reverse charge mechanism on all services subject to the B2B rule introduced in art. 44 of the same Directive. The B2B rule locates the transaction where the business customer is located. In case the customer is a private individual, B2C rules locate the transaction where the supplier is located.

According to the general B2B rule, any business resident outside Romania supplying services to a Romanian based customer will not charge any VAT and the transaction will be reverse charged by the customer.

There are however a number of exceptions to this rule. Where these exceptions apply, reverse charge is still applicable in Romania provided the following conditions are met:

• Services connected to immoveable property are located where the property is located.
• Passenger transport services will be located where the transport takes places (apportioned if necessary).
• Catering services are located where the catering takes place.
• Short term leasing of means of transport are located where the vehicle put at the disposal of the customer.
• Access to conferences, fairs and exhibitions is located where the event takes place.

The general rule may also be deviated where the supplier has a permanent establishment in the country of the customer and the PE has intervened in the supply.

Find out more about the rules for B2B services in the EU here.

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Reverse charge on specific goods and services in Romania

Domestic reverse charge may also apply on the certain domestic supplies of goods and services. This reverse charge applies only when both the supplier and the customer are VAT registered in Romania:

• Ferrous and non-ferrous waste and scrap materials.
• Raw wood and other wood materials.
• Transfer of emission rights for greenhouse gas.
• Supplies of cereals and technical plants, including oilseeds and sugar beet.
• Construction and supplies of immovable property.
• Supply of electricity and natural gas to a taxable person established in Romania, under specific conditions.
• Also, temporarily, the supplies of mobile phones, integrated circuits and games consoles, PC tablets and laptops.
• Deliveries of investment gold when opted to tax.

The reverse charge on supplies made by non-established companies is regulated in Art. 331 Romanian Fiscal Code.

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VAT Returns in Romania

Frequency of VAT Returns in Romania

The frequency of filing of the periodic VAT returns depends on the estimated annual turnover of the previous year in Romania and on whether intra-Community acquisitions are expected.

The two criteria that must be taken into account when checking the reporting frequency are:

• If Intra-Community acquisitions of goods were performed during the previous year, then the VAT return must be filed on a monthly basis.
• If the annual turnover of the previous year exceeds EUR 100,000, then the VAT return must be filed on a monthly basis. The turnover is computed taking into consideration taxable and/or exempt operations with deduction right performed during the year, including invoices issued for advance payments for these operations. Annual Turnover contains the total NET value from sales (domestic sales, Intra-Community sales and exports). The conversion in RON of the threshold is done by using the exchange rate published by NBR in the last working day of the preceding year.

If no intra-Community acquisitions are performed, and the annual turnover remains below EUR 100,000, the correct reporting period is quarterly.

Once the conditions for frequency change are met, communicating the change of frequency of filing is a mandatory action from taxpayers. Also, quarterly taxpayers must submit a form 700 to declare that the annual turnover did not exceed the EUR 100,000 threshold.

Find here access to form 700 for the communication of periodicity. The rules for frequency of filing can be found under Art. 322 of the Romanian Fiscal Code.

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Due Date of Romanian VAT Returns

Deadlines are different for VAT return submissions and VAT payments linked to these returns.

Check here the official tax calendar in Romania.

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VAT Payments in Romania

Non-established companies will often make payments from an overseas account.

The following details are used for paying taxes from abroad when you choose the method of paying via bank transfer:

• Name of the recipient: Trezorerie operativa Municipiul Bucuresti
• IBAN code: RO10TREZ70020A100101XTVA
• SWIFT code: TREZROBU
• Reference: TVA DECONT (reporting period) – ROXXXXXXXXX (VAT number of the taxpayer).
• TVA incasata pentru operatiuni interne

Have a look here at the information leaflet of the ANAF about payment details.

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VAT Refunds in Romania

When a taxable person declares more VAT deductible (input VAT) – e.g., due to purchases-, than VAT collected from sales (output VAT), the difference is a VAT credit which may be claimed for refund or carried forward to the following period to compensate with future output VAT. The excess of input VAT is also known as “negative amount of VAT” (in the local language, Suma negativă a TVA).

• Excess of input VAT can be claimed at any reporting period provided that the amount is higher than RON 5,000. To ask for a refund, you must tick the relevant box in the VAT return, replying to the question: Solicitati rambursarea soldului sumei negative de TVA? Do you request reimbursement of the balance of the negative amount of VAT?
• Alternatively, you can carry forward the VAT credit to the next reporting period.

The statute of limitations applies to the recovery of input VAT, in this case, five years. However, if a corrective invoice is issued after the statute of limitations ended, the recipient can deduct the input VAT from that invoice within the special term of 1 year.

Find here the tool to request the VAT refund of input VAT. This is regulated in Art. 301.2 Romanian Fiscal Code.

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Nil and Corrective VAT Returns in Romania

A nil VAT return needs to be submitted even if there are no transactions to be reported for that period.

Errors or omissions in a VAT return (periodic or annual) are considered as material errors, and they must be corrected within the statute of limitations of five years. This is requested by way of indicating the correction in the next VAT return, selecting the corresponding boxes.

Material errors can be corrected by the tax administration at the taxpayer’s request, following a specific procedure. Material errors include, typos, figures in the wrong order, duplication of input VAT refunds from other periods, etc.

The procedure to correct errors in VAT returns consists of the following steps:

• Submission of the request for correction of material errors together with the supporting documents.
• The tax authorities may book an appointment to have a meeting at the tax office, including any missing documents required.
• The tax authorities will prepare a final report explaining how they will rectify the errors. Based on this report, the tax office will issue a correction decision.

When as a result of a correction there is additional payable VAT, the tax office will normally apply late payment charges. This is referred under Art.323 RO Fiscal Code.

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VAT Penalties in Romania

Find here additional information about penalties for non-compliance in Romania. The above penalties are regulated in Articles 173-183 and 336-337 of the Romanian Fiscal Code. Finally here, you will be able to download an official guide about the topic.

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Romanian Tax Authorities Contact

Agenția Națională de Administrare Fiscală (ANAF)

• Phone: 031.403.91.60, Monday - Thursday: 8.30 - 16.30, and Friday: 8.30 - 14.00.
• Online contact form

OSS
Contact e-mail: m1ss.anaf@anaf.ro

Intrastat returns

Address: B-dul Libertăţii 16, Sector 5, Bucharest, Postal Code 050706, Romania

• Help-desk telephone numbers: +4021 317 77 20 / 21 / 22 / 23 or  +4021 311 50 13
• Email Help-desk: intrastat@insse.ro

Web: www.intrastat.ro  

Customs contact : AUTORITATEA VAMALĂ ROMÂNĂ

• Adresa: Str. Alexandru Ivasiuc nr. 34 – 40, bl. 5, sector 6, București, C.P. 060305
• Telefon centrală: 021/315.58.58, 021/315.58.59
• Email: vama@customs.ro
• Website: https://www.customs.ro/en

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ESPL Returns in Romania

Due Date and Frequency of Filing ESPL Returns in Romania

The due date for submitting monthly or quarterly ESPL returns is always the 25th day of the following month.

The frequency of filing is always monthly.

Find here the taxpayer’s calendar published by the Romanian tax authorities, where the ESPL returns are included (form 390).

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Nil and Corrective ESPL Returns in Romania

If there are no intra-Community transactions to be reported in a given period, a nil ESPL return is not due.

Also, in case there are errors in an ESPL return, a corrective ESPL must be submitted, indicating that the return is a corrective in the relevant boxes.

The corrective ESPL return must be completed for the corresponding reporting period for which corrections are made. The initially submitted declaration is rectified by submitting a new declaration, on the same format, by ticking the appropriate box on the form (DECLARATIE RECTIFICATIVA). The corrective ESPL return must contain all the information to be reported for the period. The transactions declared in the initial return are rectified and all the fields of the form are filled in with the data valid at the time of submitting the corrective ESPL return, regardless of whether they have been declared before.

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Penalties For ESPL Returns in Romania

The same penalties as for VAT returns apply. The submission of incorrect or incomplete ESPL returns is punished with a penalty ranging from RON 500 to RON 1,500.

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Intrastat Returns in Romania

Frequency and Due Date of Intrastat Returns in Romania

Like in most EU countries, Romanian Intrastat returns are filed monthly. They follow the calendar month. The due date to file these returns is the 15th of the following month.

Also, Romanian Intrastat returns must be filed electronically. Find the official information about Intrastat deadlines.  

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Romanian Intrastat Thresholds

The following annual Intrastat thresholds apply in Romania (calendar year) for 2024:

Type of Intrastat: standard declaration

• Arrivals RON 1,000,000
• Dispatches RON 1,000,000

These thresholds are computed annually according to the calendar year. Once filed, a complete calendar year needs to be covered by a company in order to stop filing these returns. For example, if a company exceeds the threshold in March 2024 on arrivals, Intrastat returns for arrivals are due until December 2025. These thresholds are calculated according to the invoice value.

It is the responsibility of the economic operators to monitor these thresholds and start submitting Intrastat returns when due.

Also, find here official information.

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Reporting of Specific Scenarios in Romania

Very often, the transactions reported in the Intrastat return are standard sales from one taxable person to another. However, a number of scenarios have specific reporting requirements. The nature of transaction code in the Romania have been recently updated and have now two digits. The official Intrastat manual, Part I, Annex 3 contains the updated nature of transaction codes, including those applicable to specific scenarios. You can download it under the following link.

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Nil and Corrective Intrastat Returns in Romania

If no transactions are to be reported, a nil Intrastat return must be filed.

A corrective Intrastat return can be submitted by selecting the corresponding box in the Intrastat return wrongly submitted. It is possible to cancel some transaction lines, or the whole declaration. The new submission will replace the previous one.

Regarding corrections, if an Intrastat return has been submitted showing wrong or incomplete information, a correction is required according to the following rules:

• The errors regarding the commodity code and country code must be always corrected.
• For the rest of information fields, the corrections should be submitted at transaction level for a reference month, in the following cases:
• the deviation (+/-) between the correct invoiced or statistical value and the reported invoiced or statistical value is equal or more than RON 3,000.
• the deviation (+/-) between the correct net mass/quantity in supplementary measure unit and the declared net mass/quantity in supplementary measure unit is equal or more than 10%.

For smaller differences in the value (less than RON 3,000), or a difference of less than 10%, it is not required to submit a corrective Intrastat return, although the official guidelines recommend doing so, to avoid differences between VAT and Intrastat reporting.

Also, it is not required to submit a correction in case the nature of the transaction code changed.

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Intrastat Penalties in Romania

Any contravention of Intrastat obligations shall be subject to penalties ranging from RON 7,500 to RON 15,000.

The above penalties are referred in the official Intrastat manual.