Romanian B2B E-Invoicing: Mandatory Changes Coming in 2024
Romania plans to introduce B2B e-invoicing mandate by January 2024. Non-established companies are also impacted.
Romania's 2024 B2B E-Invoicing Mandate
Update 26 October 2023: Romania has definitely approved the general B2B e-invoicing mandate, starting the obligation to issue electronic invoices B2B by January 2024.
Romania is embracing the digital age with open arms as it gears up for the B2B e-invoicing mandate. With a green light from the European Commission, Romania is all set to introduce the B2B e-invoicing mandate from January 2024, which will be valid until December 2026 or pending the adoption of the ViDA proposal.
Prior to the extension of e-invoicing to all B2B transactions subject to taxation in Romania, the authorities already mandated B2B e-invoicing, but limited to certain transactions with a higher risk of VAT fraud.
Starting on January 1, 2024, significant changes are set to transform the invoicing landscape for businesses operating in Romania. The Romania has finally approved the Law to make e-invoicing mandatory for all taxpayers, including non-resident entities, from January 2024. We have gathered some key insights into what this transition entails.
Find here more information about the current e-invoicing and e-transport system applicable in Romania.
What you Need to Know about Romanian B2B E-invoicing Mandate
The B2B e-invoicing mandate will require businesses engaged in transactions with other companies to exclusively use electronic invoicing for their exchanges, promoting seamless, paperless, and technologically efficient interactions.
- Who's Included: This mandate covers all economic operators or taxable persons engaging in B2B transactions involving goods and services delivered or performed within Romania. This includes taxpayers not established but registered for VAT purposes in Romania. The B2B relationship is defined as per Government Emergency Ordinance no. 120/2021.
- The RO e-Invoice System: Taxable persons falling under the obligation must submit their invoices electronically through the national invoice system, known as RO-eFactura. Importantly, this requirement applies irrespective of whether the recipients are registered in the RO e-Registry Invoice.
- Submission Deadlines: Invoices issued under this mandate must be submitted through the national invoice system within 5 working days from the invoice date – similar to the Portuguese SAF-T obligation-. However, this deadline should not exceed 5 working days from the deadline set for issuing the invoice.
Find here more information about the ViDA proposals on e-invoicing.
Penalties for Non-Compliance
Non-compliance with this obligation is subject to the following penalties:
- Large taxpayers may face fines ranging from 5,000 lei to 10,000 lei.
- Medium taxpayers may be fined between 2,500 lei and 5,000 lei.
- Other legal entities and natural persons could incur penalties ranging from 1,000 to 2,500 lei.
Compliance and Transition Period
Good news is that a short transition period is planned. During the period from January 1 to March 31, 2024, no penalties will be imposed for non-compliance with the submission deadlines.
This transition period offers businesses a chance to align their invoicing systems and processes with the e-invoicing requirements. It's a good idea to prepare by adopting e-invoicing software, providing training to staff and suppliers, and conducting thorough system testing for a smooth transition.
Key Objectives of the B2B E-Invoicing Mandate
The B2B e-invoicing mandate aims to achieve several key objectives:
- Enhancing Efficiency: Eliminating manual processes and paper-based invoices will boost efficiency in invoicing and accounting operations. Electronic invoicing expedites transaction processing, reduces errors, and enhances productivity and cost savings.
- Fighting Tax Evasion and Fraud: E-invoicing provides transparent, traceable transaction records, reducing the risk of tax evasion and fraud. The obligation is expected to tackle the VAT gap. Tax authorities gain real-time access to invoicing data for better monitoring and ensuring compliance.
As Romania moves towards mandatory B2B e-invoicing starting in 2024, businesses need to quickly prepare for this significant change in the invoicing landscape.
Find the official European Commission’s authorization to Romanian e-invoicing here, and the announcement made by the Romanian authorities here.
Closing the VAT gap in one of the key objectives of Romanian’s tax policies. Recently, they introduced the SAF-T obligation, which is progressively being implemented based on companies’ size.