VAT, GST and Sales Tax in Romania

Summary

Name of the tax Value-added tax (VAT)
Local name Taxa pe valoarea adaugata
Date introduced 1-Jul-93
European Union (EU) Member State Yes (since 1 January 2007)
Administered by Ministry of Public Finance (http://www.mfinante.ro)
VAT rates
Standard 19% starting with 1/1/2017
Reduced 9% and 5%
Other Exempt without credit and exempt with credit
VAT number format RO XXXXXX (the prefix is RO, but the number of digits may vary)
VAT return periods Monthly (quarterly, half-yearly or annually if granted special permission)
Thresholds
Registration EUR65,000
Distance sales EUR35,000
Recovery of VAT by non-established businesses Yes (under certain conditions)

Scope of the tax

VAT applies to the following transactions:

  • Supplies of goods or services made in Romania by a taxable person
  • The intra-Community acquisition of goods from another EU Member State (see section on the EU)
  • Acquisition of general business-to-business (B2B) services tax­able in Romania, from EU and non-EU suppliers
  • The importation of goods into Romania

Who is liable

A “taxable person” is any person who independently makes tax­able supplies of goods or services in the course of a business, regardless of the purpose or results of that activity. The VAT registration threshold is turnover of RON220,000 (EUR65,000) a year (this threshold applies only to taxable persons established in Romania). Established taxpayers who estimate or record a turn­over of more than the Romanian currency equivalent of EUR65,000 must request the VAT registration within 10 days of the moment the threshold is exceeded or achieved. The date when the threshold was achieved or exceeded is deemed to be the first day of the month following the one in which the threshold was achieved or exceeded. The VAT registration becomes valid start­ing the first day of the month following the fiscal period month of the request.

Group registration. VAT grouping is allowed under the Romanian VAT law.

Under the rules currently in effect, a minimum of two taxable persons may form a fiscal group for a period of at least two years if all of the members meet the following conditions:

  • They are established in Romania.
  • They do not belong to another fiscal group.
  • They use the same tax period.
  • Their capital is held directly or indirectly in a proportion of more than 50% by the same shareholders.

However, VAT grouping is allowed only for VAT reporting (for consolidation purposes).

Non-established businesses. A taxable person that has the seat of its economic activity in Romania is deemed to be established in Romania for VAT purposes.

A taxable person that has the seat of its economic activity outside Romania is considered to be established for VAT purposes in Romania if it has a fixed establishment in Romania, which means that it has sufficient technical and human resources to perform on a regular basis taxable supplies of goods and/or services.

A taxable person that has the seat of its economic activity outside Romania and a fixed establishment in Romania is not deemed to be established in Romania for the supplies of goods and services performed in Romania in which the Romanian fixed establish­ment is not involved.

The seat of its economic activity is deemed to be the place where the management decisions of a taxable person are taken and where the functions of its central administration are performed. To determine where a taxable person has the seat of its economic activity, certain factors should be taken into account, such as the place where the directors meet and where the company sets its general policy.

In general, a non-established business must register for VAT if it undertakes a range of activities, such as the following:

  • Intra-Community acquisitions of goods in Romania
  • Intra-Community supplies of goods in Romania
  • Transfers of its own goods to Romania
  • Sending goods to Romania from another EU country for pro­cessing with the finished products not returning to the EU country of dispatch
  • Distance sales in excess of the annual threshold of EUR35,000
  • Exports of goods

A taxable person that has the seat of its economic activity outside Romania but has a fixed establishment in Romania must register for VAT purposes in Romania before receiving a service for which it is liable to pay the VAT or before supplying a service from this fixed establishment to a taxable person that is liable to pay VAT in another EU Member State.

A taxable person that has the seat of its economic activity in Romania but is not registered for VAT purposes in Romania must register for VAT purposes if it supplies services with a place of supply in another EU Member State, for which the beneficiary is liable to pay the tax.

A taxable person that has the seat of its economic activity in Romania but is not registered for VAT purposes in Romania must register for VAT purposes if it acquires services from a supplier established in another EU Member State and if such taxable per­son, as the beneficiary of the services, is liable to pay the tax.

VAT registration is not required if an entity that is neither estab­lished nor registered for VAT in Romania makes a local supply of goods or services and the recipient is an established taxable per­son, nontaxable legal person (for example, a public authority) or is a non-established taxable person that is registered for VAT in Romania.

Taxable persons not established and not registered for VAT pur­poses in Romania may apply for VAT registration if they carry out imports of goods into Romania, taxable supplies of immov­able property or rental of immovable property in Romania.

All taxable persons and nontaxable legal persons that perform intra-Community operations (intra-Community acquisitions and supplies of goods and/or services falling under the general B2B rule for the supply of services) must register in the Registry of Intra-Community Operators (RIO) before performing such oper­ations. Failure to comply with this registration requirement results in an invalid VAT number for intra-Community opera­tions, even if the respective person is registered for VAT purposes in Romania.

The Romanian tax authorities may impose a fine of between RON1,000 and RON5,000 (approximately EUR250 to EUR1,150) if a person performs intra-Community operations before register­ing in the RIO.

Reverse charge. The reverse charge applies to the following trans­actions, among others:

  • Intra-Community acquisitions of goods and services
  • Local supplies of goods and services made by non-established and unregistered entities to customers that are registered for VAT in Romania
  • The reverse charge may be applied to imports exclu­sively by persons who have obtained a specific VAT payment deferment certificate, taxable persons benefiting of authorized economic operator and/or local customs clearance procedure
  • Local supplies of certain categories of goods, such as ferrous waste, grain crops, wood and transfer of green and CO2 certifi­cates performed between entities registered for VAT purposes in Romania
  • Supplies of electrical energy performed by a taxable person registered for VAT in Romania to a Romanian VAT-registered taxable person acting as trader
  • Taxable supplies of immovable property in Romania
  • Supply of mobile phones, laptops, tablets, game consoles or other devices with integrated circuits

Tax representatives. A non-established, non-EU entity that car­ries on taxable operations in Romania and that is required to register for VAT purposes must appoint a tax representative. A taxable person that is established in the EU may appoint a tax representative, but may also choose to register for VAT in its own right (direct VAT registration).

Registration procedures. Established or non-established taxable persons applying (as a requirement or by option) for a VAT reg­istration in Romania must file specific registration forms depending on the type of VAT registration. The forms are avail­able in electronic format but have to be submitted as hard copy and only in Romanian language directly by the taxable person or by proxy.

Late-registration penalties. Penalties of RON1,000 to RON5,000 (approximately EUR250 to EUR1,100) in case of large and medium sized taxpayers and of RON500 to RON1,000 (approxi­mately EUR125 to EUR250) in case of other taxpayers apply to late registration for VAT purposes. Separate penalties ranging from RON1,000 to RON5,000 are assessed for delays in submit­ting VAT returns. In addition, for the late payment of VAT, late payment interest (0.02% per day of delay, starting 1 January 2016) and late payment penalties (0.01% per day of delay, start­ing 1 January 2016) apply. Moreover, in the case of obligations unreported or reported inaccurately, a penalty of 0.08% per day of delay applies beginning 1 January 2016 for unreported obliga­tions established through a tax decision.

Digital economy. Starting 1 January 2015, the optional use and enjoyment rules provided by Directive 2006/112/EC for 1) tele­communications, 2) radio and television broadcasting services and 3) electronically supplied services were repealed. The place of supply in the case of all these types of services is considered to be the place where the beneficiary is established (i.e., an exception to the B2C rule).

The online VAT registration is possible only for the Mini One-Stop Shop at the following address: https://www.anaf.ro/

 

Foreign operators may register for VAT purposes in Romania as follows:

  • Nonresident taxpayers who are not established within the com­munity and who have the obligation to appoint a tax representa­tive are administered by the tax administration with competence for the administration of the tax representative (which keeps the record of the tax representative chosen as taxpayer)
  • Nonresident taxpayers established in the community who regis­ter directly in Romania are administered by the tax authority with competence for the administration of nonresident taxpay­ers, namely the specialized section of the Bucharest Directorate General for Public Finance at 13 Prof. Dr. Dimitrie Gerota Street, Sector 2, Bucharest, Romania, telephone number 021.305.70.90
  • Nonresident taxpayers who have their business established out­side Romania and who are established in Romania through one or several fixed establishments are administered by the tax authority whose territorial competence covers the fixed estab­lishment designated to submit VAT returns

The contact details concerning the departments, addresses, tele­phone, fax, email and other useful information may be obtained from the following webpage of the National Tax Administration Agency: https://www.anaf.ro.

As per the general rule, taxable persons are required to register for VAT purposes in Romania prior to performing the operations triggering the VAT registration obligation.

Depending on the type of VAT registration, the time frame in which the Romanian tax authorities should issue the VAT regis­tration number is:

  • 30 days from the date of submission of the complete documen­tation when the registration is through a tax representative
  • 10 days from the date of submission of the documentation when registration is through other means

The date from which the taxable person is considered registered is the date when the VAT registration certificate is communicated by the Romanian tax authorities (i.e., the hand-over date, the post date, as the case may be). Other dates may apply, depending on the reason for the VAT registration (e.g., the VAT exemption threshold was exceeded).

Mini One-Stop Shop. Effective 1 January 2015, the VAT law has been amended to allow the VAT Mini One-Stop Shop, which gives taxpayers making B2C supplies of digital services the sim­plified option of registering in one EU Member State, from which they can submit VAT returns and pay the VAT due in all Member States.

Taxpayers who perform supplies of digital services to EU con­sumers and choose to register in Romania should submit a state­ment of commencement of their activity. No fiscal representative is required in this respect. Electronic declarations should be submitted for each quarter no later than the 20th day of the month following the respective quarter. The VAT payment should be made in euros no later than the 20th day of the month following the quarter for which the reporting is required. If the supplies of digital services are performed in other currency, the payment should be converted into euros using the exchange rate published by the European Central Bank for the last day of the quarter to which the special VAT statement relates.

The web portal is available with access granted by use of a digital certificate.

Deregistration. Taxable persons with annual turnover of less than RON220,000 may request deregistration by the 10th day of the month following the fiscal period applied by the taxable person.

VAT rates

Supplies within the scope of VAT are classified as taxable and exempt.

In Romania, the standard rate of VAT is 19% starting with 1 January 2017. Reduced VAT rates of 9% and 5% apply to cer­tain supplies (see below).

Examples of goods and services taxed at 9%

  • Prostheses of any type and accessories (except dental prosthe­ses)
  • Orthopedic products
  • Medicines for human and veterinary use
  • Hotel accommodation and similar accommodation, including the rental of land for camping
  • Restaurant and catering services (excluding alcohol, except for draught beer)
  • Food (excluding alcohol) having certain classification codes
  • Fertilizers, seeds and other agricultural products intended for the sowing or planting, as well as for supplies of services, such as those specifically used in the agricultural sector
  • Irrigation and drinking water

Examples of goods and services taxed at 5%

  • Books, newspapers, magazines and school manuals (except those intended exclusively for publicity)
  • Access to museums, castles, cinemas, zoological and botanical gardens, and sporting events
  • Supply of social housing (including related land). For this pur­pose, social housing includes, but is not limited to, houses that are a maximum of 120 square meters and that do not exceed RON450,000 in value (net of VAT). The reduced 5% VAT rate applies only if both of the following conditions are satisfied:
    • The house can be used as such after the sale.
    • For individual houses, the surface of the land on which the house is built is less than 250 square meters.

Exempt supplies and operations are classified in the following ways:

  • Exempt supplies with credit (that is, with the right to deduct input VAT; see Section F)
  • Exempt supplies without credit (that is, without the right to deduct input VAT; see Section F)
  • Exempt imports and intra-Community acquisitions (under cer­tain conditions)
  • Exempt supplies without credit performed by taxable persons established in Romania who have an annual turnover of less than EUR65,000 and who have not opted for standard taxation

Examples of supplies of goods and services
that are exempt without credit

  • Specific banking and financial operations
  • Insurance and reinsurance
  • Medical services
  • Education
  • Specific hiring, concession, leasing or letting of immovable property (unless option to tax is exercised)
  • Sale of “old” buildings (unless option to tax is exercised)

Examples of supplies of goods and services
that are exempt with credit

  • Exports of goods
  • Transport services and other services directly linked to exports of goods
  • International transport of passengers
  • Intra-Community supplies of goods (specific provisions)

Examples of exempt imports and intra-Community acquisitions

  • Re-imports of Romanian goods repaired abroad (equivalent to the exported goods)
  • Imports of natural gas through specific distribution systems and electricity

Option to tax for exempt supplies. Any taxable person may opt to tax the hiring, concession, leasing or letting of immovable prop­erty and the sale of “old” buildings by means of a taxation noti­fication submitted to the competent tax authorities.

Time of supply

The time when VAT becomes due is called the “chargeability to tax” or “tax point.” The basic time of supply for goods is when the goods are delivered. The basic time of supply for services is when the services are provided. Several exceptions apply to these rules.

For intra-Community acquisitions or exempt intra-Community supplies of goods, the tax point arises on the day when the invoice is issued, the day when a self-invoice is issued or the 15th day of the month following the tax point, whichever is earlier.

Continuous supplies of services. The time of supply for continu­ous supplies of services, such as telephone services, water and electricity, is on the last day of the period specified in the contract for payment, or on the date of issuance of the invoice. The settle­ment period should not exceed one year.

Prepayments. The tax point for advance payments is when the payment is received. Special rules may apply in case of a change of tax regime, partial prepayments or partial advance invoices.

Payments by installment. The tax point for a supply of goods, including immovable goods, with installment payments occurs when the goods are handed over to the beneficiary (unless an invoice is issued or a payment is received before that date).

Cash accounting. A taxable person registered for VAT purposes in Romania and having the seat of its economic activity in Romania, whose turnover in the previous calendar year does not exceed RON2,250,000 (approx. EUR500,000) could opt to apply the VAT cash accounting system, as well as taxable persons estab­lished in Romania which apply for a VAT registration during the year and opt to apply the VAT cash accounting system starting with the VAT registration date. Since 1 January 2014, such sys­tem is optional.

The turnover for computing the RON2,250,000 threshold is the total value of the supplies of goods or services, VAT exempt with deduction right, as well as the operations for which the place of supply is deemed to be located abroad, realized during one calen­dar year.

VAT tax point. The VAT tax point occurs upon the date of collect­ing the total or partial value of the supplies of goods or services in the case of taxable persons applying the VAT cash-in system.

Specific rules have been set in the case of invoices issued by tax­able persons prior to entering/exiting the VAT scheme upon col­lection, as well as in the case of adjustments of the taxable amount.

Persons and operations excluded from the application of the VAT cash-in system. The VAT cash-in system should not be applied by taxable persons who are part of a single tax group, taxable per­sons not established in Romania which are registered in Romania for VAT purposes directly or through a tax representative, and taxable persons which have the seat of their economic activity outside Romania but have a fixed establishment in Romania. However, the respective persons will apply the VAT cash-in sys­tem in respect of VAT deduction for invoices issued by suppliers, taxable persons applying the respective system.

Furthermore, certain operations such as supplies of goods or services that are exempt from VAT, supplies of goods or services between related parties or supplies of goods or services paid in cash are excluded from the application of the VAT scheme upon collection.

Deduction right. The deduction right of the input VAT related to acquisitions performed by taxable persons from other taxable persons applying the VAT cash-in system is postponed until the date of the VAT payment towards such suppliers.

Furthermore, the VAT deduction right in the case of acquisitions made by a taxable person applying the VAT cash-in system will be postponed up to the payment of VAT to its supplier in relation to the goods or services supplied, with certain exceptions.

Record of transactions. For transactions subject to the VAT cash accounting system, both the seller and the buyer must include in their VAT journals the invoices issued and received for which the VAT cash accounting system applied, even if the tax point or the right to VAT deduction does not arise in the period when the invoice was issued. Sales and purchase invoices bearing unsettled VAT, in full or in part, must be carried forward in the VAT jour­nals until the VAT becomes chargeable.

Registration in the registry of persons applying the VAT cash-in system. The registry of taxable persons applying the VAT scheme upon collection has been introduced. Registration and deregistra­tion is carried out by filing a relevant notice.

Reverse-charge services. Certain services received by a Romanian taxable person from a foreign supplier are taxed in Romania using the reverse-charge mechanism, which means that the Romanian customer must account for the VAT due in the VAT return for the month in which the tax point occurs. In such circumstances, the customer accounts for the VAT as both output tax and input tax in the VAT return. If the beneficiary has a full right to deduct input tax, the charge is neutral for tax purposes (see Section F).

If no invoice is received from the foreign supplier, the Romanian beneficiary must issue a “self-invoice,” which must be in a specified format, by the 15th day of the month following the month in which the services are supplied. The time limit for issu­ing an invoice is the 15th day of the following month.

If the beneficiary of the service is registered for VAT in Romania, the VAT due must be paid by the 25th day of the month following the month in which the tax point occurs. However, if the benefi­ciary is not registered for VAT in Romania under the normal regime, the reverse charge must be accounted for by using a special VAT return (with no right of deduction; consequently, the VAT due must be paid).

Imported goods. The VAT tax point for imported goods is the tax point for customs duties.

Intra-Community acquisitions. VAT shall become chargeable on the issue of an invoice or self-invoice, as the case may be, or on the expiry of the 15th day of the month following the month of the supply if no invoice/self-invoice has been issued by that time.

Intra-Community supplies of goods. VAT shall become chargeable on the issue of an invoice or self-invoice, as the case may be, or on the expiry of the 15th day of the month following the month of the supply if no invoice/self-invoice has been issued by that time.

Leased assets. The VAT tax point shall occur on each payment deadline specified in the contract for making the payment. By way of derogation, VAT shall become chargeable on the invoice date or on the date when an advance payment/prepayment is received, where such cases occur prior to the chargeable event.

Recovery of VAT by taxable persons

A taxable person may recover input tax, which is due on goods and services supplied to it for business purposes. A taxable per­son generally recovers input tax offsetting it against output VAT, which is VAT charged on supplies made.

In principle, input tax includes VAT charged on goods and ser­vices supplied within Romania, VAT paid on imports of goods, and VAT self-assessed for reverse-charge services received and for intra-Community acquisitions of goods, as well as for certain taxable transactions subject to reverse-charge simplified measures.

Except for certain specific cases, the amount of VAT reclaimed must be requested through the VAT return. The excess of input VAT over output VAT is generally refundable. Alternatively, it may be offset against future VAT liabilities.

For taxable persons that are registered for VAT purposes in Romania, the minimum amount of a VAT refund is RON5,000 (approximately EUR1,100). Any amount below this threshold may be recovered by offsetting it against other VAT liabilities.

Since 14 March 2013, input VAT on fiscal receipts is deductible only if the VAT code of the customer is on the receipt and the total value of the acquisition (including VAT) is lower than EUR100.

Nondeductible input tax. Input tax may not be recovered on pur­chases of goods and services that are not used in the performance of operations subject to VAT (for example, goods acquired for private use by an entrepreneur). In addition, input tax may not be recovered for some items of business expenditure.

Examples of items for which input tax is nondeductible

  • Personal expenses
  • Business gifts if the individual value of each item (tangible good) is higher than RON100 (approximately EUR22) and VAT was deducted on acquisition
  • Alcohol and tobacco

Examples of items for which input tax is deductible (if related to a taxable business use)

  • Advertising
  • Hotel accommodation
  • Conferences
  • Purchase of vans and trucks, and leases of cars, vans and trucks
  • Business travel expenses

Regarding the deductibility of input taxes on the acquisition of passenger road vehicles weighing no more than 3.5 tons and hav­ing a maximum of nine seats, including the driver’s seat, two rules apply:

  • Since 1 January 2012, the deductibility of the input VAT on the acquisition of such vehicles – whether by purchase, intra­Community acquisition or import – and on the fuel purchased for them is limited to 50% irrespective of whether the vehicle is used exclusively for business purposes.
  • Since 1 July 2012, the deductibility of the input VAT on the acquisition of such vehicles – whether by purchase, intra­Community acquisition, import, rental or leasing – and on ser­vice expenses related to those vehicles is limited to 50%, if the vehicle is not used exclusively for business purposes.

However, a 100% deduction is available for vehicles used for certain specifically mentioned activities (for example, when used to render services against consideration, when used as merchan­dise for commercial purposes, or when used by sales and pur­chase agents) are not subject to such provision. In this context, input VAT recovery should be supported by back-up documenta­tion and log books.

Partial exemption. Input tax directly related to taxable supplies is fully recoverable, while input tax directly related to exempt sup­plies is fully non-recoverable. Input tax that is attributable to both taxable and exempt supplies (such as VAT paid on overhead costs) is deductible on a pro rata basis. The pro rata method is generally based on the percentage of income generated by supplies with a right to input tax deduction, divided by total income. The calcula­tion of recoverable VAT is based generally on the pro rata percent­age for the preceding year. However, a special pro rata percentage may be used if approved by the tax authorities. Pro rata percent­ages may also be established for each sector of the taxable per­son’s activity that has a partial right to claim deductions.

Input VAT related to acquisitions of goods or services that may be allocated to operations allowing VAT deduction right or to opera­tions not allowing VAT deduction right is not deducted based on a pro rata (but based on direct allocation).

In case of acquisitions destined for investments, which will be used both for operations allowing VAT deduction right and for operations not allowing VAT deduction right, the taxable person is allowed to deduct the VAT fully during the investment period. This VAT will be adjusted in the first year when supplies will be per­formed using the good resulting from the investment.

Refunds. If input VAT exceeds output VAT, the balance (known as the “negative VAT balance”) may be treated in either of the fol­lowing manners:

  • Carried forward to the next period.
  • Compensated or refunded by the tax authorities, based on an option exercised by the taxpayer in the taxpayer’s VAT return. This option may be exercised only for negative VAT balances exceeding RON5,000.

The VAT refund application may cover eligible input VAT incurred in the period beginning with the fifth year before the year in which the claim is made (under certain conditions).

In principle, a VAT refund or compensation request must be pro­cessed within 45 days (in practice, this period may be longer). Depending on certain parameters, the VAT refund can be granted with or without a prior VAT audit (the Romanian tax authorities may approve the VAT reimbursement for a taxable person regis­tered for VAT purposes in Romania before performing a subse­quent VAT audit in cases where the value of the amount requested for reimbursement is lower than RON45,000). During the VAT refund process, the tax authorities may request additional infor­mation from the taxpayer. Consequently, the term for making the repayment may be extended by the number of days between the date of the request for additional information and the date on which the information is received by the tax authorities. If the refund or compensation request is not dealt with by the expiration of this term, in principle, the taxpayer is entitled to receive late payment interest.

Preregistration costs. Any taxable person is entitled to deduct VAT for the acquisitions made prior to VAT registration, as of when such person intends to perform an economic activity, within a period of five consecutive years. The intention of the person must be assessed based on objective elements, such as the fact that the person starts to incur costs and/or make preparatory investments required for the initiation of this economic activity.

Capital goods. Capital goods include any fixed tangible assets subject to depreciation, constructions and land of any kind held for the production or supply of goods or services, for rental or administrative purposes. It also includes the construction, trans­formation or modernization of immovable goods but excludes repairs or works of maintenance on these assets. Fixed tangible assets that are leased are deemed capital goods of the lessor.

Input VAT is deducted in the year in which the goods are acquired. The amount of input VAT deducted depends on the destination or use of the good and/or on the partial exemption of the taxable person. However, the amount of input VAT deducted must be adjusted over time if the destination or use of the goods changes, the capital good ceases to exist the taxable person’s partial exemption percentage changes.

In Romania, the capital goods adjustment scheme applies to the following assets for the number of years indicated:

  • Twenty years for the acquisition, construction, transformation or modernization of an immovable property, if the transforma­tion or modernization amounts to at least 20% of the aggregate amount of the construction thus transformed or modernized
  • Five years for other movable capital goods

Taxable persons shall keep records of the capital goods subject to the adjustment of input VAT, so as to allow the verification of the tax deducted and of the adjustments made. This statement shall be kept for a period starting with the date when the tax related to the acquisition of the capital goods becomes chargeable and end­ing five years as of expiry of the period when adjustment of the deduction can be requested. Any other entries, documents and ledgers on capital goods shall be kept for a similar period.

Write-off of bad debts. Bad-debt relief may be applied only where the value of goods or services supplied cannot be received due to the bankruptcy of the beneficiary or as a result of implementation of a restructuring plan acknowledged and approved by a court decision through which a part of or the entire written-off receiv­able is canceled. In the case of a restructuring plan, bad-debt relief is allowed from the date of the court decision. In a bank­ruptcy case, bad-debt relief is allowed from the date of the court decision for the closure of the domestic insolvency procedure.

Noneconomic activities. Not applicable.

Romania refunds VAT incurred by businesses that are neither established in Romania nor required to be registered for VAT there. Non-established businesses may claim Romanian VAT to the same extent as VAT-registered businesses.

For businesses established in the EU, refund is made under the terms of the new EU 9th Refund Directive. For businesses estab­lished outside the EU, refund is made under the terms of the EU 13th Directive (under the condition of reciprocity).

For the general VAT refund rules applicable to the new EU Refund Directive and EU 13th Directive refund schemes, see the section on the EU.

Recovery of VAT by non-established businesses

The adjustment period shall start on January 1 of the year when assets were acquired or manufactured or of the year when assets were first used after transformation or modernization. The VAT deduction shall be adjusted during the tax period when the event triggering the adjustment occurs, once for the entire tax related to the remaining adjustment period.

If during the adjustment period events resulting in the adjustment in favor of a taxable person or in favor of the state take place, the VAT adjustment shall be carried out for the same capital goods successively during the adjustment period whenever such events occur.

Input VAT related to capital goods shall not be adjusted where the amount from adjustment of each capital good is lower than RON1,000.

Refund application. The deadline for refund claims is 30 Sep­tember of the year following the calendar year of the reimburse­ment period.

Claims under the EU VAT Refund Directive may be submitted in the Member State where the applicant is established. The applica­tion for refund must be accompanied by the appropriate docu­mentation (see the section on the EU).

In principle, the term established by the tax authorities for pro­cessing a refund application is four months from the date of submission of the application and supporting documents.

The minimum claim period is three months, while the maximum period is one year. The minimum claim for a period of less than a year, but greater than three months, is the equivalent in RON of EUR400. For an annual claim or a claim for a period of less than three months, the minimum amount is the equivalent in RON of EUR50.

Repayment interest. Since 1 March 2014, interest at a rate of 0.03% per day of delay may be claimed by a taxable person for late refunds. Starting 1 January 2016, the interest rate will be 0.02% per day of delay.

Invoicing

VAT invoices and reversal invoices. A Romanian taxable person must generally provide a VAT invoice for all taxable supplies made. Invoices that contain errors may be cancelled and the tax­payer may issue a “reversal invoice.” The amount credited must be printed on the reversal invoice and must be preceded by a minus sign. A reversal invoice must contain the same information as a VAT invoice and a cross-reference must be provided.

Electronic invoicing. Since 1 January 2013, the VAT law has been amended to permit electronic invoicing in line with EU Directive 2010/45/EU. For invoices issued by non-EU suppliers, the authenticity and integrity of the content of the invoice should be ensured either through an electronic signature or the electronic data exchange (EDI) procedure.

Proof of exports. Goods exported from Romania are not subject to Romanian VAT. To qualify as exempt with credit, the supplier must prove that the goods left Romania. Suitable proof includes the following documentation:

  • Customs documentation
  • Invoices
  • Other relevant documentation depending on the nature of the export

Foreign-currency invoices. If a VAT invoice for a transaction that takes place in Romania is issued in a foreign currency, the VAT amount must be converted into Romanian lei (RON), using the rate published by the National Bank of Romania, the bank in charge of the payment transfers, or the European Central Bank. The conversion must be calculated for the date on which the tax point for the transaction occurred or would have occurred if the VAT cash-in system had not been applied. The parties to the transaction must mention the applicable method in the contract.

B2C invoices. Effective 1 January 2015, new rules apply to the place of supply for supplies of telecommunications, broadcasting and electronic services to non-VAT taxable customers. For fur­ther details of the VAT rules on electronic services in the EU, please see the European Union section.

Romanian suppliers of these services are required to issue invoices to nontaxable customers.

VAT returns and payment

VAT returns. Taxable persons with an annual turnover below the RON equivalent of EUR100,000 must submit VAT returns quar­terly. However, since 1 May 2009, taxpayers who submit quar­terly VAT returns must submit monthly VAT returns, effective from the date on which they perform a taxable intra-Community acquisition in Romania. All other taxable persons submit VAT returns monthly.

The due date is the 25th day of the month following the end of the return period. Payment in full is required by the same date. All VAT liabilities must be paid in Romanian currency.

Beginning with the tax returns due on 25 November 2010, large and medium-sized taxpayers must file their tax returns (including corporate income tax and VAT returns) electronically. The rele­vant tax returns must be signed by the taxpayer using a qualified certificate issued by a provider of certification services.

Informative statement. All taxable persons that are registered for VAT in Romania must also submit an informative statement to the Romanian tax authorities. In principle, this statement must include all local supplies and acquisitions performed between taxable persons registered for VAT purposes in Romania made in the reporting period.

However, starting with the July 2016 reporting period, based on recent amendments of the VAT law, the “Informative statement regarding the supplies and acquisitions performed on the nation­al territory by the persons registered for VAT purposes” (i.e., Form 394) was amended, having an extended format.

As such, the Form 394 will include, inter-alia, acquisitions from Romanian persons not registered for VAT purposes in Romania, acquisitions from taxable persons established outside Romania and not registered for VAT purposes in Romania and that do not have the liability to register for VAT purposes in Romania – reverse charge at the beneficiary, etc.

The due date is the 30th day of the month following the end of the period, starting with the July 2016 reporting period. The Form 394 should be submitted to the tax authorities even if no transac­tions were performed in the reporting month. A taxable person that fails to submit an informative statement by the due date is liable for a fine ranging from RON12,000 to RON14,000 (approximately EUR2,600 to EUR3,200) in case of large and medium sized taxpayers and between RON2,000 to RON3,500 (approximately EUR500 to EUR875) for other taxpayers.

Special schemes. Romania has implemented the following spe­cial schemes:

  • Special scheme for small enterprises: if the turnover is less than EUR65,000 per year, the taxable person can apply the special exemption
  • Special scheme for travel agents: where the taxable base of the services rendered is the profit margin obtained from the sale of the respective services, exclusive of VAT
  • Special arrangements for secondhand goods, works of art, col­lectors’ items and antiques: where the taxable base for the sup­plies of goods is the profit margin obtained from the sale of the respective goods, exclusive of VAT. By way of derogation, for supplies of works of art, collectors’ items or antiques imported by the taxable dealer, the purchase price to be taken into account in calculating the profit margin shall be equal to the taxable base on importation plus the VAT due or paid on importation
  • Special scheme for investment gold: where the supplies, intra­Community acquisitions and importation of investment gold, including investment in securities; and intermediary services in respect of supplies of investment gold
  • Special scheme for electronically supplied services: for non-established taxable persons supplying electronic services to nontaxable persons

Electronic filing and archiving. Electronic submission of VAT statements is mandatory for the large- and medium-sized taxpay­ers and optional for all other taxpayers. Such submission is per­formed through means of a digital certificate, which can be obtained only by Romanian individuals based on specific forms submitted with the competent tax administration.

The archiving of the financial-accounting documents based on which the VAT statements were prepared shall be ensured for a period of 10 years (or equal with the useful life in case of immov­able capital goods).

The taxable person must ensure the storage of copies of invoices issued (or issued by the customer/a third party on behalf of the supplier), as well as of all invoices received. Invoices may be stored on paper or electronically, regardless of the original form in which they were sent or made available.

The taxable person may decide the place of storage for the invoices, provided such documents are made available to the competent tax authorities without any delays and whenever requested. Nonetheless, such storage place may not be located on the territory of a country with which there is no legal instrument concerning mutual assistance.

By way of exception, taxable persons having the seat of their economic activities in Romania or established in Romania through a fixed establishment must store the invoices issued and received – other than electronic invoices – on Romanian territory.

Annual returns. Not applicable.

Penalties

Since 1 March 2014, the late payment interest rate is 0.03%. Additional late payment penalties (0.02% per day of delay) apply. Starting 1 January 2016, the late payment interest rate is 0.02% per day of delay, while the late payment penalty is 0.01% per day of delay. In addition, a penalty of 0.08% per day of delay is intro­duced starting 1 January 2016.

Fraud committed with respect to the calculation of a VAT repay­ment may be considered a fiscal evasion.

EU filings

Intrastat. A Romanian taxable person that trades with other EU countries must complete statistical reports, known as Intrastat, if the value of either dispatches or arrivals of goods exceeds cer­tain thresholds. Separate reports are required for intra-Communi­ty acquisitions (Intrastat Arrivals) and for intra-Community supplies (Intrastat Dispatches).

The threshold for Intrastat Arrivals is RON500,000. The threshold for Intrastat Dispatches is RON900,000.

Romanian taxable persons must complete Intrastat declarations in Romanian lei, rounded up to the nearest whole number.

Intrastat returns must be submitted monthly. The submission deadline is the 15th day of the month following the return period.

A penalty may be imposed for late submissions or for missing or inaccurate declarations.

EU Sales and Acquisitions Lists. If a Romanian taxable person makes intra-Community supplies or intra-Community acquisi­tions of goods in any return period, it must submit an EU sales and acquisitions list to the Romanian VAT authorities. Since 1 January 2010, the listing of intra-Community supplies or acqui­sitions is also required for qualifying services that are rendered to or received from a taxable person established in the EU and that are taxed where the beneficiary is established. This list is not required for any period during which the taxable person does not make any intra-Community supplies or acquisitions of goods/ services.

The listing of intra-Community sales or acquisitions of goods and qualifying services must be submitted on a calendar monthly basis by the 25th day of the month following the relevant month. A failure to submit an EU sales and acquisitions list reporting sales or acquisitions of goods by the due date is subject to a fine ranging from RON1,000 to RON5,000 (approximately EUR230 to EUR1,100). The submission of such list with incorrect or incomplete amounts is subject to a fine ranging from RON500 to RON1,500 (approximately EUR115 to EUR350). The fine does not apply if the taxable person corrects voluntarily the EU sales and acquisitions list by the due date for the submission of the next EU sales and acquisitions list.