Romania – SAFT Reporting New Obligation for Foreign Sellers

Romanian Tax Authorities introduced a new tax reporting requirement for domestic businesses in 2022, the Standard Audit File for Tax(SAF-T). The introduction of this new reporting mandate has been gradual, as is generally the case when a new tax reporting system is mandated. 

The gradual roll-out was pegged to the taxable person’s category. For large taxpayers, the obligation started in 2022, with the grace period, which gave them the possibility that for “some” types of infringements regarding the SAF-T reporting obligation, they could stay outside the penalty or fine zone until January 1, 2023. 

The last group of taxable persons obliged to create, generate, and transmit a SAF-T RO file shall be small taxpayers(domestic businesses) and foreign vendors who don’t have a permanent or fixed establishment in the country but are VAT registered under Romanian regulations. 

Timeline 

Starting January 1, 2025, local small taxpayers and non-resident taxable persons registered for Romanian VAT will be obliged to collect the necessary data for the SAF-T accounting-reporting file. 

What does this change mean for foreign vendors or providers of services? 

Non-resident taxable persons who are VAT registered in Romania should be aware that, starting January 1, 2025, they will have an additional, important tax reporting obligation. Accordingly, they should begin collecting all the necessary information to generate the SAF-T RO file by the deadline. 

The SAF-T RO file does not exclude the obligation to submit VAT returns. In XML format, this file will serve as an additional source of tax-related information that tax authorities can use to verify the taxable person’s submitted data. 

The Standard Audit File for Tax is an accounting file with different sections pre-defined by the international standard. Like many other countries implementing this reporting obligation, Romania has modified the file to some extent to add personal country-based requirements. 

The file could be generated-extracted in different manners: 

• In the cases of taxable persons using an ERP or accounting software, in most cases, a simple add-on to this file could be generated by extracting collected data.
• The tax authority has developed a SAF-T validation and generation tool. Through a manual process, a responsible economic operator can simply submit all the necessary data for generating the SAFT file and upload it as the next step through the tax authority portal’s UI. 

Does SAFT reporting influence all foreign sellers? 

Non-resident taxable persons registered for Romanian VAT are obliged to generate and submit an SAFT report according to the predefined deadlines. The obligation to collect mandatory data should start on January 1, 2025. 

From a compliance perspective, foreign service providers or intra-community sellers registered for Romanian VAT must generate a SAFT report. This obligation doesn’t exclude the non-resident’s responsibility to submit a VAT return (if it already has this obligation).

Non-resident taxable persons registered for VAT Romania should know the new reporting duty effective January 1, 2025. This means they should update their accounting system(a software solution or reach out to the external service provider) to collect all the necessary information to create the SAFT file that should be submitted to the tax authority portal.