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VAT Returns & Recovery in Romania

In Romania, every business registered for VAT, including both resident and non-resident entities, is obligated to file periodic preliminary VAT reports. These reports detail taxable transactions and reverse charge invoices.

The frequency of submitting VAT returns typically depends on the sales turnover of the taxable person. Taxable entities with an annual turnover below EUR 100,000 and without intra-community acquisitions are required to file their VAT returns on a quarterly basis. In contrast, all other taxpayers must submit their VAT returns monthly.

Read more about VAT recovery and VAT returns in Romania in our comprehensive guide below.

VAT guide romania

VAT Returns in Romania

Filing deadlines

In Romania, VAT returns must be submitted by the 25th day of the month following the conclusion of the taxable period. The payments associated with these returns should also be completed within this filing deadline and are typically made through banks, treasuries, or other authorized institutions.

Not adhering to the filing deadline can lead to a penalty ranging between RON 1,000 and RON 5,000. Additionally, failing to make payments by the legal deadline incurs an interest charge of 0.01% for each day of delay, along with a separate late payment penalty of 0.02% per day of delay.

Electronic Filing

 In Romania, electronic submission of VAT returns is mandatory for all medium and large taxpayers operating within the country. The criteria used to determine whether a legal entity is considered medium or large include factors such as their annual turnover and tax obligations declared to the State Budget.

A list of medium and large taxpayers is compiled annually by the President of ANAF and published on the Ministry of Finance’s website via the ANAF Portal. However, small taxpayers established in Romania and non-resident taxpayers who have either registered directly for VAT in Romania or have a VAT representative in the country have the option to use the electronic filing system.

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VAT Recovery in Romania

In Romania, businesses have the ability to reclaim input tax from the government. This input tax is the VAT that businesses have paid on their purchases of products and services. The VAT that is collected from customers is referred to as output tax. To successfully claim back input tax, businesses must possess the following documentation:

 

  • For domestic acquisitions above EUR 100 – An invoice that is compliant with the Romanian VAT requirements and the proof of payment for the acquisitions made.
  • For domestic acquisitions below EUR 100 – A cash receipt indicating the same information that can be found in a simplified invoice.
  • For acquisitions subject to reverse charge – invoice or self-invoice.
  • For imports not subject to VAT deferment – import declaration or survey report issued by the customs authority and proof of payment and for the importers, a copy of the import declaration for VAT and excise duties.
  • For import subject to VAT deferment – import declaration or survey report issued by the customs authority. The import VAT must also be recorded in the VAT return of the reporting period.
  • For intra-community acquisitions – an invoice or self-invoice.
  • For employee transportation and hotel accommodation expenses – invoices issued in the employee’s name as well as the travel expense account.

In certain situations, businesses in Romania might not be able to fully recover input tax or might not be eligible to recover it at all. Examples include:

  • VAT paid on alcoholic beverages and tobacco products, which is non-reclaimable unless these items are used for marketing purposes or are intended for use or resale.
  • VAT related to the purchase of passenger vehicles can only be recovered up to 50%, unless they are used exclusively for business purposes.

Various forms of input tax include:

  • VAT charged on goods and services supplied within Romania.
  • VAT paid on imports of goods.
  • VAT assessed on intra-Community acquisitions of products.
  • VAT charged on purchases of goods and services where the reverse-charge procedure is applicable.

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VAT Refunds 

When a taxable entity in Romania accumulates a refundable VAT amount over RON 5,000, they have the option to either offset this amount against VAT due in future periods or reclaim it from the State Budget. However, entities deemed to be of high fiscal risk must undergo an audit before they are eligible for VAT refunds. The qualifications that may categorize a taxable person as a high fiscal risk include:

 

  • The tax authorities have received official documents relating to any or all of the following issued encountered during the previous audits:
    • Transactions made to evade VAT obligations.
    • Incorrect reporting or omission of VAT base or VAT payable, be either by error or in bad faith.
    • Omission of certain transactions.
    • Falsification of revenues and transactions.
    • Retaining fictitious transactions.
  • The taxpayers with a history of criminal tax offenses have been identified during the audit process.
  • The refunds claimed have been found to exceed the amount due by 10% of the refunded amount, whose value does not exceed RON 50,000 for each VAT return.
  • There are significant inconsistencies between the transactions reported by the taxpayer and by its business partners on their returns.

Filing Procedures:

In Romania, tax authorities mandate that large and medium-sized taxpayers submit their returns electronically. Small taxpayers and non-resident taxpayers, however, have the option to file electronically as well. The categorization of taxpayers as large or medium is based on specific criteria, including their annual turnover and the tax obligations they have declared to the State Budget, as determined by the tax authorities.

 

Last Updated: 03/01/2024

 

Disclaimer

The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax

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