The President of Romania has issued a Decree by which the previously implemented law for mandatory B2G e-invoicing has been amended due to the expansion of the mandate for e-invoicing and e-reporting for B2B transactions.
After obtaining the derogation from the Council to introduce mandatory B2B electronic invoicing, this July, the President gave his final blessing by enacting the law, which stipulates that starting from January 1, 2024, the electronic invoicing mandate will cover B2B transactions.
Timeline
| Starting dates and accompanying sanctions | ||
| January 1, 2024 – March 31, 2024 | April 1, 2024 – June 30, 2024 | July 1, 2024 |
| The first three months of 2024, as regards the e-invoicing and e-reporting for both issuers of invoices and recipients, will be treated as non-penalty months. The economic operators can continue to issue invoices as they mostly do nowadays, in paper form, PDF, or using another format of electronic or digital invoices. The grace period covers both resident and non-resident businesses operating in Romania. | Resident companies should electronically report issued invoices within five working days of their issuance. A penalty between RON 1000 and 10,000 can be expected if not. | Resident recipient ↓ Starting from this date, the compliance burden as regards the electronic invoicing is shifted to the recipient of the invoice. The recipient should exclusively accept structured XML e-invoice. If it agrees to other types of invoice, the penalty should be taken. |
| Non-resident economic operators registered in Romania for VAT purposes can continue to issue Tax Invoices like they do today, but they should electronically register that invoice. If the e-reporting procedure isn’t followed, the supplier can expect a penalty between RON 1000 and 10 000. | Non-resident VAT-registered economic operators can continue accepting traditional invoices from their suppliers. Still, they must electronically report each invoice they issue within five working days from its issuance. If the e-reporting procedure isn’t followed, the supplier can expect a penalty between RON 1000 and 10 000. | |
Impact
As we can witness, Romania is following the legislative global rhythm of mandatory shifts towards electronic invoicing and electronic reporting. The Government sees in this move great potential for combating the gray economy and reducing that hurtful national VAT Gap. The EU institutions have welcomed this move by Romanian authorities because the country is one of the “biggest contributors” to the EU VAT gap.
Affected businesses, if they haven’t started already, should as soon as possible initiate the preparation of their tax technology tools for complying with the new mandate, which mandatory operationalization will begin very soon.
Aleksandar Delic
1stopVAT Indirect Tax Researcher (Global Content)