Romania one step ahead towards B2B e-invoicing mandate

B2B E-Invoicing Mandate in Romania

Romania is taking significant steps towards digital transformation with the implementation of the B2B e-invoicing mandate. Now, considering the European Commission’ authorization, the country has free way to introduce B2B e-invoicing mandate starting from January 2024.

At the moment, Romania applies a mandate on B2B e-invoicing to certain transactions with a higher risk of VAT fraud. However, the plan now is to extend this e-invoicing mandate to all B2B transactions between taxable persons established in Romania.

As for the next steps, we shall wait for local legislation to be implemented providing further details on the general B2B e-invoicing mandate in Romania.

The authorization is in principle valid until 31 December 2026, or until the adoption by Member States of the ViDA proposals. Also, the country may apply for an extension of this authorization if ViDA is not previously introduced.

This transformative move is set to revolutionize the way businesses interact with each other and with tax authorities, fostering efficiency, transparency, and economic growth. 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.

Key Objectives of the B2B E-Invoicing Mandate

The B2B e-invoicing mandate aims to achieve several key objectives:

• Enhancing Business Efficiency: By eliminating manual processes and paper-based invoices, businesses will experience increased efficiency in invoicing and accounting operations. Electronic invoicing will expedite transaction processing and reduce the risk of errors, leading to improved productivity and cost savings.
• Curbing Tax Evasion and Fraud: E-invoicing provides a transparent and traceable record of transactions, reducing the potential for tax evasion and fraud. Tax authorities will have real-time access to invoicing data, allowing for better monitoring and ensuring compliance.
• Facilitating Cross-Border Transactions: Romanian electronic invoicing system will be interconnected with other systems available in different EU Member States. This streamlines cross-border transactions, enabling businesses to engage in seamless trade with partners from other countries.

Compliance and Transition Period

Businesses operating in Romania must prepare to comply with the new regulations. The transition period provides an opportunity for companies to align their invoicing systems and processes with the e-invoicing requirements.

During this period, businesses are encouraged to:

• Implement E-Invoicing Solutions: Companies should adopt e-invoicing software or partner with e-invoicing service providers to ensure they can generate, send, and receive electronic invoices in compliance with the mandate.
• Train Staff and Suppliers: Proper training is essential to equip employees with the necessary skills to manage e-invoicing processes effectively. Additionally, businesses should communicate with their suppliers and trading partners about the mandate to facilitate a smooth transition for all parties involved.
• Test and Optimize Systems: Thorough testing of e-invoicing systems is crucial to identify and address any technical or operational issues before the mandate's implementation. Companies can optimize their processes to ensure a seamless transition.

Find the official European Commission’s authorization to Romanian e-invoicing here, and the announcement made by the Romanian authorities here.