Romania Moves Forward with Mandatory B2B E-Invoicing

By official letter registered with the European Commission on 30 September 2022, Romania asked for authorization to derogate from Articles 218 and 232 of the EU VAT Directive as a mandatory procedure for being able to implement the mandate of B2B e-invoicing for domestic  transactions. 

The European Commission has submitted a Proposal for issuance of the Implementing Decision by the Council, authorizing Romania to introduce a special measure derogating from Articles 218 and 232 of the EU VAT Directive on 23 June 2023.   

Timeline 

If the Council of the European Union adopts the Implementing Decision following the Proposal from the EU Commission on the derogation request, Romania can impose the mandate for mandatory B2B E-Invoicing starting from 1 January 2024.    

Background 

Romania introduced the mandatory B2G e-invoicing system in November 2021 by developing a National IT platform called RO e-Invoice. The Ministry of Finance manages the platform.  In its origins, the platform was developed according to the clearance model and fully aligned with Directive 2014/55/EU of the European Parliament and the Council.  Each e-invoice should be first sent to the RO e-Invoice platform, where the service will handle the verification procedure, e.g., authentication of the origin of the issued invoice. If the verification procedure ends in a positive result, the supplier and buyer will only have a chance to download-review the invoice in question.  The platform has been developed and organized to be able to handle  B2G, as well as different types of B2B transactions between domestic taxpayers.   

Impact

The established RO e-invoice system and related national IT platform will be used at least in the first period as the only validation service for validating and registering national e-invoices for B2B transactions.  The clearance model should cover only transactions between taxable persons established in Romania.  The Implementing Decision of the Council should apply starting from 1 January 2024, and it will be applicable until the earlier of the following two dates: 

1. 31 December 2026 or 
2. Until the date when Romania should be mandatory to adopt into national legislation changes of the EU VAT Directive, which are expected to be transposed as part of the upcoming VAT in the Digital Age reform (ViDA).

Following the expected adoption of the Implementing Decision by the EU Council, through which Romania will be authorized to derogate from the articles mentioned earlier of the EU VAT Directive, taxpayers should start preparing their IT systems for the upcoming invoicing reform. 

While the publication of Implementing Decision by the Council is still pending, regarding some parts of the mandatory procedure, the National Tax Authority still hasn’t expressed that there would be or wouldn’t be some sort of a “grace” period for domestic taxpayers which will be obliged to adhere to the e-invoicing system, and from when exactly the mandate shall be applicable. 

Based on the initial overview, there is a chance that the roll-out of the mandate will start from the asked derogation, i.e., 1 January 2024. 

If you have any questions about e-invoicing, reach out to our team, and we will help you with this and other VAT-related questions!