Romania: The digitalisation of ANAF – between myth and reality

published on 29 September 2021 | reading time approx. 3 minutes

Where we are today and what the future might look like

     
After all, what does this digitalisation entail? In a word, reform. A fundamental reform, at all levels, that has become, particularly as a result of the current pandemic situation, inevitable.

 
The role of the tax authorities is to ensure that all taxpayers pay real taxes. This objective can be efficiently achieved only if the risk of tax avoidance is reduced and digitalisation is the tool needed to achieve it.
By replacing traditional tax management models with those based on digital tools, digitalisation enables tax administrations to be more organized and efficient, both in terms of combating tax evasion and in improving the quality of tax reporting and collection.

The digitalisation of ANAF: Inception

The extensive modernization process of the National Agency for Fiscal Administration (ANAF) has announced its presence since 2020, when, with the arrival of the Covid-19 pandemic and the restrictions imposed in Romania, the circumstances required taking the first measures intended to allow for "remote" collaboration with the tax authorities. Among these, we mention the acceptance of electronically signed documents and the transmission of documents by e-mail, the creation of the virtual payment desk "SNEP", the performance of remote VAT audits (by e-mail), the improvement of communication through the Virtual Private Space, etc.
Nevertheless, the most ambitious projects proposed by ANAF are still in progress. According to the ANAF strategy, the improvement of the IT system for monitoring intra-community transactions in goods (Traffic Control), the implementation of the Standard Audit File for Tax (SAF-T) and the electronic invoicing system (E-Invoice) represent the main projects for which significant efforts are being made to be finalized this year.

Projects in process of completion in 2021

If for the implementation of Traffic Control, the IT system necessary for real-time monitoring of transit and transport regarding intra-Community acquisitions and supplies of goods, although intended to be introduced in 2021, was proposed the deadline for completion March 2022, for the implementation of SAF-T and E-Invoice, the deadlines are much more ambitious.

 
For the implementation of SAF-T, the initial deadline for completion was announced for July 2021, so that from 1 January 2022 it would become operational for the first category of rapporteurs, the large taxpayers. The necessary technical documentation was published by the authorities in April and updated in early August, so the large taxpayers (and the rest) seem to have everything they need to successfully start implementing the software in their accounting systems. In addition, a green light has recently been given for the effective testing of the D406 Informative Declaration with the ANAF system.

 
Everything seems to be in place, except for the number of large taxpayers who will have the obligation to report through the D406 Informative Declaration from 1 January. The latest list of large taxpayers published in 2017 (including the list of secondary offices of large taxpayers), shows that there are about 5,000 large taxpayers in Romania. However, an update of the list of large taxpayers is expected to be published by the end of July, and the number of large taxpayers will be reduced to about 2,500.

 
Under these circumstances, once the list of large taxpayers is updated, it is possible that some of the taxpayers currently being managed by the General Directorate for the Administration of Large Taxpayers (DGMAC) will be removed from the list and that new taxpayers will be included on it. In this case, for the taxpayers who would be removed from the list, this news comes as a respite for better implementation, but for those “new” large taxpayers on the list, it is possible that the remaining 3-4 months of 2021 may not be sufficient to implement and test the SAF-T reporting program in their systems, even with the 3 months grace period provided by the authorities for the first reporting deadline.

 
As regards the implementation of the electronic invoicing system (E-Invoice), a project launched in March 2020 by the Ministry of Finance and ANAF, with a view to making tax and duties collection more efficient, mainly aimed at improving and strengthening the collection of VAT and preventing/combating tax evasion, the Ministry of Public Finance announced on its website that starting with September 2021, will be implemented, as part of a pilot program, an electronic invoicing system that would allow the loading, storage and unloading of invoices issued by economic agents in relation to public institutions, this being the first stage of development of the system, before being implemented in the relations between all economic operators.

Effective project implementation – a promising future

All these measures concerning the digitalisation of ANAF are more than welcomed in Romania, in particular since their positive effects on the increase of revenues collected to the state budget and the decrease of tax evasion have already been confirmed in other Member States where they have been introduced.

 
Of course, each state wants to implement its own digital systems, but the pursued result of digitalisation is always the same, respectively the increase at the level of the state budget collection. There is no classic recipe for success as regards the digitalisation of the tax administration, but the examples of other Member States such as Bulgaria, Latvia, Poland, which have improved their level of tax collection after the implementation of certain digital projects show us that this is the way for efficient collection.

 
Through the implementation of digitalisation projects, ANAF expects the VAT gap to be reduced by up to 10 percent in the period 2021-2024 (compared to the 2020 value), and the share of revenues collected in GDP to increase by 2.5 percent by the end of the year 2024.

 
However, it remains to be seen how these systems will actually be implemented in Romania and how they will be managed by the tax authorities, given the reduced number of available staff and the large number of taxpayers who will be obliged to implement them. Taxpayers also need to prepare themselves in advance (if they have not already done so) in finding an IT provider, along with tax consultants for the implementation of the systems, given both the relatively short time left for implementation, but also the possibility that IT providers may be overwhelmed by the high number of requests.