Tax Representation SRL can act as your agent in dealing with the tax authorities in Romania, can register your company as a Romanian VAT payer, can prepare and submit all VAT returns, EU sales reports, INTRASTAT and other documents for VAT refunds, and can assist with transaction planning and practical assistance in finding the most efficient solutions for logistics and non-EU and intra Community transactions.
Name of the tax – Value Added Tax
Local name – Taxa pe Valoare Adaugata
Date introduced – January 1, 1993
Date of membership in EU – January 1, 2007
Administered by – Ministry of Finance (www.mfinante.ro)
Standard – 24%
Reduced – applied for certain supplies, including textbooks, books, newspapers and magazines (except those used solely or principally for advertising), admissions to castles, museums, exhibitions etc., the supply of prosthesis and related accessories, the delivery of orthopedic aids, hotel or similar accommodation, bread and bakery products.
5% – applied to social housing, under certain conditions;
Other – Exempt with and without credit supplies: VAT exempt supplies include medical care and dental services, certain financial and banking services, insurances and reinsurance services and most exports.
Effective January 1, 2016, the standard rate will be reduced to 20% and effective January 1, 2017 to 19%.
VAT registration is required for persons carrying out taxable operations in Romania. Taxable persons with an annual turnover of less than EUR 65000 may be eligible for a special VAT-exempt regime.
For distance sellers in Romania, the threshold is of EUR 35000.
Taxable persons established in the Community, apart from taxable persons from Romania, with the obligation to register for VAT purposes, have the option to register directly or by appointing a VAT tax representative. Taxable persons not established in the Community have the obligation to register in Romania for VAT purposes by appointing a VAT fiscal representative.
Cancellation of VAT Registration – under specific situations, the tax authority may cancel VAT registrations, e.g. if the VAT returns filed for 6 consecutive months during a six month period (for taxpayers that have the calendar month as their VAT period), or for two consecutive quarters (for taxpayers that have the calendar quarter as their VAT period) submitted by the taxpayer, did not include any acquisitions / supplies of goods / services, i.e. if the taxpayer did not carry out taxable transactions during the reporting periods.
VAT Number Format – RO 123456789
Filing and Payment – VAT returns must be submitted on a monthly basis; Quarterly filing and payment are available for taxable persons with an annual turnover under 100000 EUR. However, if a taxable person performs at least one intra-Community acquisition of goods, VAT returns must be submitted monthly.
VAT returns may be submitted bi-annually/ annually, under certain conditions (approval of the relevant tax authority).
No annual Romanian VAT returns are to be submitted.
The VAT reporting and payment deadline is of 25th of the month following the fiscal period (i.e. month / quarter).
VAT Cash Accounting System – Am optional VAT cash accounting system is available, under which local suppliers established in Romania with an annual turnover under EUR 500000 are required to collect VAT only when their invoices have been paid, but no later than 90 days from the date of issuance.
Invoicing – Council Directive 2010/45/EC on invoicing rules has been transposed into Romanian VAT law, according to which, any documents or messages on paper or in electronic format, if in compliance with the provisions of the Romanian Fiscal Code, are to be considered invoices.
Intra-Community Operators Registry – Romanian VAT payers performing intra-Community transactions (either purchases or sales or both) are also required to register in the Intra-Community Operators Registry.
Intrastat Reporting – For goods only, if certain thresholds are exceeded – either for dispatches or arrivals – an Intrastat report must be completed and submitted to the Romanian statistical office. The report must be submitted monthly by the 15th of the month following the reporting month. The threshold are as follows:
• For dispatches: 900000 RON;
• For arrivals: 500000 RON.
EORI Registration – Provided that the company imports goods in Romania it needs to obtain an EORI number from the customs authorities.
VAT Grouping – A consolidated VAT return is submitted by the members of a VAT group. VAT grouping is no longer limited to large taxpayers. However, VAT grouping can be applied only when the taxpayers that are managed by the same fiscal authorities (meaning that no VAT grouping can be applied for taxpayers established in different counties).
VAT Refund – Romanian taxable persons can generally recover the VAT with which they are charged on their purchases of goods and services, subject to conditions and possible limitations and exceptions.
As of January 1, 2007, based on the relevant EU Directives, foreign companies established in or outside the EU which incur VAT in Romania are entitled to claim back the VAT on all eligible business expenses, such as conferences, events, training, hotel accommodation, meals, fuel and transportation services.
Similarly, Romanian established companies may request the refund of input VAT incurred on their expenditure made abroad (e.g. hotel accommodation, fuel costs, training) through a claim form submitted in that respective country.
EU companies do not require a fiscal representative for refund purposes in Romania as the refunded VAT could be paid directly into the company’s bank account in the country of origin. Non-EU companies require a fiscal representative for refund purposes and a bank account in Romania. However, a non-EU company may recover the VAT incurred in Romania only in case it is established in a country with which Romania has signed a reciprocity agreement.
©TRA – Tax Representative Alliance