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Insights Value Added Tax (VAT) Guidelines: Romania

Value Added Tax (VAT) Guidelines: Romania

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published on 30 March 2022

 

 

This country summary is part of the comprehensive Focus on VAT Fellows: International Value Added Tax (VAT) Guidelines »



1. VAT Scope, VAT Rates and VAT Exemptions

Usually, the following operations are taxable in Romania:
  • Supplies of goods or services performed in Romania, with payment, by a taxable person;
  • Imports with their place in Romania;
  • Acquisitions for which the place is considered to be in Romania;
  • Exchange of goods and services; they are assimilated to supplies of goods or services.
 
Some transactions are exempt from Romanian VAT, such as: medical care, educational activities or activities related to the social protection of children and young people.
 
Certain VAT exemptions may also apply to imports of goods and intra-Community acquisitions of goods, ex­ports or other similar operations, intra-Community supplies of goods and international and intra-Community transports of goods, under certain conditions.
 
If the VAT exemption for the above mentioned taxable supplies does not apply, Romanian VAT will be due and has to be paid to the Romanian tax authority.
 
The VAT rates are the standard rate of 19 percent and the reduced rate of 5 percent. 
 
There are some rules for VAT exemptions. These are qualified as VAT exemptions with VAT deduction right and VAT exemption without VAT deduction right. Categories of the exempted operations are the following:
  • Operations performed in Romania
  • Imports and intra-Community acquisitions of goods
  • Exports or other similar operations, intra-Community supplies of goods and international and intra-Commu­nity transport of goods
  • Special exemptions for the international transport of goods
  • Exemptions for intermediaries.
 
In case of the supplies of goods the place of the operation is considered to be:
  • Place where the goods are located at the time when the dispatch or transport begins, in the case of goods dispatched or transported by the supplier, the buyer or by a third person.
  • Place where the installation or assembly is carried out in the case of goods subject to installation or assembly
  • Place where the goods are located when they are made available to the buyer if the goods are not dispatched or transported
 
The Romanian VAT legislation provides for special cases as passenger transport, supplies of energetic pro­ducts, distance sales, etc.
 
In case of providing services the place of the operation is considered to be:
  • Place of supply of services to a taxable person is the place where that person receiving the services has established his place of business
  • Place of supply of services to a taxable person acting as such is the place where that person receiving the services has established his business.

 

2. VAT registration and simplifications

The taxable person who has its place of business in Romania and carries out or intends to carry out an econo­mic activity involving taxable transactions, VAT exempt with deduction right and/or operations resulting from economic activities for which the place of supply/provision is considered to be abroad, if the tax would be deductible, in the case of such operations were carried out in Romania, must apply for VAT registration to the competent tax authority as follows:
  • before carrying out such operations
  • if it declares that will achieve a turnover that reaches or exceeds the special exemption threshold for small enterprises of EUR 88,500 (RON 300,000)
  • if it declares that it will achieve a turnover lower than the special exemption threshold for small enterprises of EUR 88,500 (RON 300,000), but opts to apply the normal VAT regime
  • if during a calendar year it reaches or exceeds the special exemption threshold for small enterprises, within 10 days from the end of the month in which the threshold was reached or exceeded;
  • if the turnover achieved during a calendar year is lower than the special exemption threshold for small enter­prises of EUR 88,500 (RON 300,000), but opts to apply the normal VAT regime; 
  • if it performs VAT exempt operations and opts for their taxation
 
A taxable person not established in Romania and not registered for VAT purposes in Romania has the obligation to register for VAT purposes for transactions performed on the Romanian territory which give the right to deduct VAT, other than transport services and services ancillary thereto, VAT exempt, prior to the performing such transactions, except the case when the person liable to pay VAT is the beneficiary.
 
The taxable person not established in Romania nor registered for VAT purposes in Romania can opt for VAT registration in Romania if it performs any of the following operations:
  • Imports of goods 
  • Certain transactions exempt if they opt for taxation
  • Supplies of buildings/parts of buildings and the land on which they are built, as well as any other lands, whether they are taxable by law or by option.

The taxable person not established in Romania and not registered for VAT purposes in Romania which will intend to:
  • carry out an intra-Community acquisition of goods for which it is liable to pay tax;
  • carry out an intra-Community supply of goods exempt from VAT;
  • carry out intra-Community distance sales of goods, which have the place of beginning of the dispatch or transport of the goods in Romania and for which they choose to use the special OSS regime
  • has the obligation to register for VAT purposes before starting these operations.
 
There are some simplification rules to avoid a registration for VAT purposes in Romania.
  • Reverse Charge: For several supplies of goods or services, the reverse charge mechanism is applicable in Romania. The mandatory requirement for reverse charge to be applicable is that both the supplier and the beneficiary are registered for VAT purposes, however other requirements may apply depending on the operation performed. 
  • Intra-Community triangulation
  • Consignment warehouse and call-off stocks: The transfer made by a taxable person of goods forming part of the assets of his economic activity from another EU Member State to Romania under the call-off stock or consignment stock arrangements is not treated as a supply of goods for consideration.
 
The registration for VAT purposes through a fiscal representative may be requested by a taxable person not established in Romania. The companies located in the EU which have to register for VAT in Romania, have the possibility to name an authorized fiscal representative to fulfil their VAT obligations. For the companies outside EU the appointment of a fiscal representative to fulfil their VAT obligations is mandatory. Rödl & Partner in Romania also provides VAT compliance/declaration services for foreign companies which are obliged to register for VAT in Romania.

 

3. Declaration requirements and penalty regime

Persons registered for VAT purposes in Romania are required to submit to the competent tax authority for each tax period, a VAT return. The VAT return contains all the transactions performed by the Company in Romania, is drafted based on its VAT sales and purchase ledgers and has to be submitted until the 25th of the month following the VAT reporting period.
 
The summary statement of intra-Community supplies/acquisitions of goods/services has to be submitted to the competent tax authority, monthly, until the 25th of the month following the month in which such trans­actions were performed.
 
The informative statement of domestic supplies/acquisitions of goods/services performed in Romania – have to be submitted to the competent tax authority for each tax period, until the 25th of the month following the VAT reporting period.
 
All VAT returns are electronically signed using a digital signing certificate and electronically submitted through the Romanian platform www.e-guvernare.ro. 
 
The Intrastat statistic report has to be submitted by taxable persons who are VAT registered in Romania and perform intra-Community supplies of goods and/or intra-Community acquisitions of goods exceeding the threshold annual value of RON 900,000 per each of the two flows (i.e. arrivals/dispatches). The deadline for transmitting the Intrastat statement to the National Institute of Statistics is always the 15th of the month following the reference month.
 

4. VAT recovery

A Romanian established company may recover the input VAT incurred on its Romanian acquisitions only through its Romanian VAT returns. To this end, first it must be registered for VAT purposes. In case a VAT refund is requested through the VAT return, the normal VAT refund procedure will be followed.
 
Taxable persons not established in Romania, who are established in another Member State, not registered and who are not obliged to register for VAT purposes in Romania, may benefit from the refund of VAT related to imports and purchases of goods/services, made in Romania. The EU taxable person is entitled to recover Romanian VAT if certain conditions are satisfied during the VAT refund period.
 
To request a VAT refund in Romania, the claimant must submit a refund request by electronic means in its member state of establishment. That member state will forward the request to the Romanian tax authorities through its electronic portal.
 
Taxable persons who are not registered nor obliged to register for VAT purposes in Romania, not established in the European Union, may request a refund of the VAT related to imports and purchases of goods/services made in Romania, if, according to the laws of the country where they are established, a taxable person esta­blished in Romania would have the same right of refund in respect of VAT or other similar taxes/duties applied in that country.

 

5. Invoicing

According to Romanian VAT legislation, the invoice shall include the following mandatory information:
  • Registration number, based on one or more series that uniquely identifies the invoice;
  • Date of issuing of the invoice;
  • Date of supply of goods/services or the date when the advance payment was cashed-in, if the invoice is issued after this date;
  • Name of the supplier which is not established in Romania and which has appointed a tax representative and the name, address and registration code for VAT purposes of his tax representative;
  • Name and address of the beneficiary of the goods or services and the registration code for VAT or tax identi­fication code of the beneficiary, whether it is taxable or non-taxable legal person;
  • Name of beneficiary who is not established in Romania and has appointed a tax representative and the name, address and VAT registration code of the tax representative;
  • Name and the quantity of delivered goods, name of the provided services, as well as the particularities for defining the goods, in the case of the intra-Community delivery of new means of transportation;
  • Taxable base of the goods and services or, by the case, invoiced advances, for each rate, exemption or non-taxable operation, the unitary price, exclusively the tax, as well as the discounts, rebates, returns and other price reductions, if they are not already included in the unitary price;
  • The applicable VAT rate and the amount of output VAT, expressed in RON, for each applicable VAT rate;
  • If the invoice is issued by the beneficiary in the name and on behalf of the supplier, the wording “autofactura” (“self-billing invoice”);
  • If a VAT exemption is applicable, a reference should be made to the applicable provision of the Romanian Fiscal Code, the EU VAT Directive, or any other wording indicating that the supply of goods/services is subject to a VAT exemption;
  • If the beneficiary is the person liable to account the VAT, the wording “taxare inversa” (“reverse charge”);
  • Where the special scheme for travel agencies applies, the wording “regimul marjei – agentii de turism” (“margin scheme – travel agencies”);
  • If one of the special regimes for second-hand goods, works of art, collectors’ items and antiques is applied, one of the following wording “margin scheme – second hand goods” (“regimul marjei – bunuri second-hand” in Romanian language), “margin scheme – works of art” (“regimul marjei – opere de artă” in Romanian language) or margin scheme – collectors’ items and antiques (“regimul marjei – obiecte de colecție și antichități” in Romanian language), as appropriate;
  • Where the VAT tax point occurs when the full/partial value of supply of goods/services is cashed-in, the wording “VAT cash accounting system” (“TVA la incasare” in Romanian language) should be inserted (valid only for suppliers who apply the VAT cash accounting regime);
  • Reference to other invoices or documents previously issued should be made if multiple invoices/documents are issued for the same transaction.

 

6. Others

Under the conditions and within the limits provided by law, a group of taxable persons established in Romania which are independent from the legal point of view, but are in close relationship with each other from the organizational, financial and economic point of view, may choose to form a unique fiscal group.

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