RomaniaManual

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. See the E-commerce manual for more information.

Backdated registrations are possible in Romania. However, this involves the payment of a penalty at the moment of registration.

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.

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.

The requirement for non-EU businesses of appointing a fiscal representative is regulated in the local legislation in art. 307.3 and 308 RO Fiscal Code.

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.

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.

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

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.

  • 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.

Have a look at our general article about postponed import VAT accounting.

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 [AG1] 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 here official EU guidelines on Customs’ special regimes.

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. This is regulated under art. 310 and following RO Fiscal Code.(1) The taxable person established in Romania according to art. 266 para. (2) lit. a) , whose annual turnover, declared or achieved, is lower than the ceiling of 88,500 euros, whose equivalent in lei is established at the exchange rate communicated by the National Bank of Romania on the date of accession and is rounded up to the next thousand, respectively 300,000 lei, may apply the tax exemption, hereinafter referred to as the special exemption regime, for the operations provided for in art. 268 para. (1) , with the exception of intra-Community deliveries of new means of transport, exempted according to art. 294 para. (2) lit. b).
  • Farmers. Art. 315.1.1.b) RO Fiscal Code.
  • Travel agents. Art. 311. RO Fiscal Code.
  • Margin scheme. Art. 312 RO Fiscal Code.
  • Investment gold. Art. 313 RO Fiscal Code.

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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