EU VAT guide – Romania

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How much is VAT in Romania?

The Standard VAT Rate (Taxa pe valoarea adaugata (TVA)) în Romania is 19%.

Some supplies are exempt from VAT. This applies to business activities like education, health care, insurance, and banking services.

Romania VAT Rate	Rate Type	Coverage and imposition
19%	Standard	This applies to all taxable supplies of goods and services, with exceptions, e.g. those types of supplies to which reduced rates are applicable;
9%	Reduced Rate	Accommodation in the hotel sector or sectors with a similar function, including the rental of land set up for camping;restaurant and catering services, with the exception of alcoholic beverages other than beer;the services of access to pools, amusement parks and recreational parks, fairs, exhibitions, cinemas, and cultural events other than those exempt from the tax;
5%	Reduced Rate	school textbooks, books, newspapers, and magazines, with the exception of those intended exclusively or mainly for advertising
0%	Zero Rate	Intra-community supplies; export of goods to third countries

The exact list of taxable transactions and allocated Romania VAT rate can be found in VAT Romania regulations.

VAT thresholds in Romania

Valuable information about the VAT threshold in Romania and applicable provisions can be found in the VAT legislation. Also, a helpful source of information is an interpretation of the appropriate information shared by Tax Authority officials.

VAT registration threshold for resident businesses: Resident businesses and/or those with a permanent establishment in Romania can benefit from a threshold of RON 300,000. However, voluntary registration for VAT purposes is available when there is a valid reason for voluntary registration.

VAT registration threshold for non-resident businesses: No registration threshold for specific types of activities

VAT registration threshold for intra-EU distance sales of goods and B2C supplies of services: EU-wide harmonized threshold of EUR 10,000

VAT registration threshold for non-EU established suppliers of Electronically Supplied Services: No registration threshold

VAT Taxable Activities in Romania

A taxable person by Romania VAT Law is a legal person or individual who carries out economic activity independently, whatever the purpose or results.

Types of taxable activities that trigger the imposition of Romania VAT:

The supply of goods and rendering of services in Romania for consideration;
Receipt of reverse-charge services by a taxable person in Romania;
Export of goods;
Import of goods.

Other case scenarios exist where domestic or foreign businesses should impose Romania VAT on their transactions.

Tax Representative in Romania

For non-EU-established businesses, having a tax representative for all VAT compliance-related activities is often mandatory.

For EU-established businesses, having a tax intermediary isn’t compulsory. Still, the economic operator could acquire the professional to ease up and streamline compliance challenges for its operations in the country.

VAT on Electronically Supplied Services in Romania

Electronically Supplied Services

Consistent with the European Union’s push towards embracing the E-commerce package, Romania incorporated the most important changes into its national law.

By adopting these updates from the EU’s VAT legislation, Romania has laid a robust groundwork for uniform tax rules within the digital economy. This move should make understanding the tax rules applicable to digital products and services less challenging.

Taxability Rules for ESS

The introduction of the E-commerce regulatory package in July 2021 emphasized the necessity for unified EU VAT rules applicable to cross-border distance sales of goods and services.

This legislative move established standardized VAT regulations throughout the Single Market, covering Electronically Supplied Services (ESS) and the distance selling of goods. It guaranteed more consistency and transparency within taxable operations connected with intra-community distance sales of goods and the provision of ESS to EU residents.

Taxability rules stemming from the E-Commerce package:

B2B Transactions for Electronically Supplied Services: In transactions where a buyer is a taxable person, general rules for the place of supply should be used;
B2C Transactions for Electronically Supplied Services by Non-Resident Companies: Businesses outside the country must adhere to EU-specific VAT regulations, primarily using the VAT rate prevalent in the customer’s country, streamlining tax collection and compliance;
B2C Transactions for Electronically Supplied Services by Non-EU Suppliers: Suppliers based outside the EU must comply with EU standards for determining the place of supply without possibly leveraging the instituted threshold of the EUR 10,000;
VAT Rules for Distance Sales of Goods and B2C ESS: EU-based suppliers generating less than EUR 10,000 annually from distance sales of goods and/ or B2C ESS can opt between applying the VAT rules of their home country or adhering to the One-Stop Shop (OSS) rules, offering flexibility for smaller enterprises;
VAT Rules for Distance Sales of Goods and B2C ESS: For annual turnovers exceeding EUR 10,000, suppliers must apply the VAT rate attributable to the customer’s place of residence. Aligning the applicable tax rules with the place of consumption and ensuring VAT is levied where economic activity occurs.

This uniformity in VAT regulations simplifies the compliance process for businesses operating within the European Union and extends its benefits to international entities engaging with the EU market.

How much is VAT in Romania for Electronically Supplied Services?

VAT rate Romania: A standard VAT rate of 19% is applied in most cases on sales of Electronically Supplied Services in Romania

Example of taxable ESS in Romania:

Supply of digital products, such as software, connected changes, and updates of the software

Website supply, web-hosting, distance maintenance of programs and equipment

Supply of music, films, and games, including games of chance and gambling games

Supply of distance learning

Access or download of music to a physical device

Access or downloading images, jingles, films, ringtones, and other audio output

E-Commerce VAT Rules in Romania

On July 1, 2021, the European Union made the necessary but highly effective decision to update VAT regulations, responding to the rapidly evolving needs of the digital economy. Legislative realignment was needed, with a primary focus placed on reducing the complexity for businesses involved in cross-border transactions.

Important Aspects of the 2021 E-Commerce VAT Reforms:

Cross-Border Sales of Low-Value Goods: The reforms introduce a unified taxation framework for the importation of low-value goods by EU customers from non-EU territories, guaranteeing in this manner the transparency.
Intra-Community Distance Sales: Removal of Member State-based thresholds that caused fragmentation and serious challenges for businesses operating outside their borders.
Domestic Sales by Deemed Suppliers: The reforms address sales executed entirely within one Member State, defining transactions where both the deemed supplier and the customer are located in the same country, clarifying the VAT responsibilities in such scenarios.
Provision of B2C Services: Expansion of the scope of cross-border services provided to EU-based residents that could be reported under OSS schemes.

These reforms accent the advancements made in the EU’s approach to combat the challenges stemming from the operations handled by the businesses that are part of the digital economy ecosystem.

E-Commerce VAT Simplification:

Far from being just an update, this reform involved a thorough reevaluation of the existing VAT systems and introduced the Import One Stop Shop (IOSS) scheme. The refinement of VAT special schemes, particularly the addition of a new reporting tool – IOSS, represents a key stride in the EU’s strategy towards e-commerce taxation.

This initiative greatly eases the challenge of managing VAT responsibilities for businesses, paving the way for a streamlined and cohesive digital market.

The E-Commerce VAT package made the following special schemes available:

Union One-Stop-Shop Scheme;

Non-Union One-Stop-Scheme;

Import One-Stop-Shop Scheme.

Overview of EU VAT Special Schemes

Non-Union Scheme can be leveraged by

The Non-Union Scheme is tailored for businesses not based in the European Union. This scheme provides an effective solution for non-EU suppliers, enabling them to utilize it as a streamlined method for reporting all their B2C supplies of services that fall within the specified parameters.

Union Scheme can be leveraged by

EU-based businesses: Taxable entities within the EU offering B2C services or engaging in intra-community distance sales of goods can benefit from the Union Scheme. The critical parameter for benefiting from this scheme is offering services or goods to customers in different Member States from where the supplier is established.
Non-EU Based Businesses on Intra-Community Sales: Businesses not based in the EU are also eligible to use the Union Scheme specifically for intra-community distance sales of goods.
Digital Marketplaces: Whether based in the EU or not, digital marketplaces facilitating intra-community distance sales of goods and certain domestic supplies can leverage the Union Scheme.

These schemes, part of the broader VAT regulatory framework, aim to accommodate the diverse structures of businesses engaging in the digital single market, ensuring VAT compliance is manageable and consistent across the European Union.

Import Scheme can be leveraged by:

The Import Scheme is available to any taxable entity involved in the distance selling of goods imported from non-EU countries or territories, provided these goods are shipped in consignments valued at or below EUR 150. This special scheme is accessible to a broad range of users, including EU-established businesses, entities without establishment in the EU, and operators of electronic marketplaces. It offers a simplified method for managing VAT obligations on low-value imports.

OSS Return and Payment

The Romanian tax rules don’t provide a simplified registration or reporting approach tailored explicitly to suppliers of Electronically Supplied Services. Nonetheless, businesses can engage with the EU-wide One-Stop Shop (OSS) schemes, simplifying VAT obligations on a broader scale.

These schemes are designed to simplify things for businesses participating in the cross-border EU supply. The scope of the schemes covers a wide array of services and distance sales of goods.

When foreign businesses cannot profit from the OSS supply schemes to buyers residing in Romania, they need to follow the national registration and reporting rules.

OSS Return – In case Romania is the Member State of Identification(MSI)
VAT Return Name	One Stop Shop Scheme(OSS)
Reporting Period	Quarter
Submission Deadline	Q1-April 30; Q2-July 31:Q3-October 31; Q4-January 31
Payment Deadline	It is the same as for the electronic submission of the declaration
Payment Currency	RON
Language	Romanian or English
Tax Representative	For Union and Non-Union Scheme – No IOSS – if the taxable person is established outside the EU – Yes
Input Tax Credit	Not allowed in the OSS return
Archiving	10 years

Electronic Platform and Deemed Supplier Rules

Aligned with the European Union’s efforts to simplify VAT reporting for cross-border B2C transactions, Romania has adopted the EU’s VAT guidelines within its own legal system. This adoption has enabled the introduction of the “deemed supplier” concept, effectively simplifying the taxation process for specific online sales activities.

Upon meeting predetermined conditions, a digital platform managing the distance sale of goods is designated as the “deemed supplier,” assuming VAT obligations for the transaction.

Notable situations where a marketplace operator assumes the role of deemed supplier include:

The import of goods from outside the EU with a value equal to or less than EUR 150, followed by their sale to EU consumers by the original suppliers;
Distance sales of goods that are in free circulation in the EU from non-EU established vendors.

This integration underscores Romania’s commitment to aligning with EU VAT regulations, enhancing the clarity and consistency of tax rules for digital commerce transactions.

This regulatory framework introduces additional responsibilities for deemed suppliers, vastly changing this sales model’s VAT obligations for taxable entities. In this multi-sided business model, we have two separate transactions:

The initial supply from the original vendor to the digital platform is recognized as a business-to-business (B2B) transaction.
The subsequent supply from the platform to the final consumer is classified as a business-to-consumer (B2C) transaction.

This ensures compliance and facilitates smoother operations under the simplified tax framework provided by the EU.

Invoice Requirements in Romania

General invoice information:

Date of invoice issuance;
Date of the supply of goods or provision of services;
Unique invoice number issued in sequence.

Seller information:

Company name;
Full address(head office);
Billing address if different from company address;
VAT number.

Customer information:

Name;
Full address;
VAT number;
Delivery address;
The billing address is different from the delivery address.

Fiscal Information:

Description and breakdown of the goods or services – quantity, discounts, unit price excl. VAT;
Net amount;
The VAT rate(s) applied and the breakdown of VAT per rate;
Invoice Total.

Additional information required in particular cases:

Exemption reference – guaranteed by precise norm;
Reverse charge – term if applicable;
Self-billing – term if applicable;
Tax Representative information for non-resident business.

Foreign Currency Invoice in Romania

In Romania, it’s permissible to issue tax invoices in foreign currencies, but the VAT amount on the invoice must be shown in local currency.

VAT Return in Romania

Domestic returns

Domestic taxpayers and non-established foreign businesses who conduct business under the national VAT Romania rules should submit monthly or quarterly declarations depending on their turnover.

Penalties for late reporting and omitted declarations

Taxpayers should charge Romania VAT on their transactions when the responsibility rises and submit the VAT return. If they do the return fillings after the deadline, they can expect to allocate more funds than they would if they had filled the return within the permitted time frame.

According to the Fiscal Procedure Code, failing to submit declarations by the legal deadlines is a contravention and is sanctioned with a fine or warning. When the predefined conditions are met, the Romanian tax authorities could issue first-time offenders a warning(without a fine). In other circumstances, the notification will be accompanied by the defined fine.

When the declaration is submitted on the taxable person’s initiative, depending on the timeframe when it’s submitted, the following fines could be expected:

On taxpayer’s initiative(without notification of Tax Authority):

1,000 lei for tardiness of 16-30 days;
1,500 lei for the tardiness of 31-60 days;
1,700 lei for tardiness of 61-90 days;
2,000 lei for more than 90 days.

When the filling is done after receiving the notification:

3,000 lei for tardiness of 16-30 days;
4,000 lei for tardiness of 31-45 days;
5,000 lei for over 45 days.

Additional penalties about which taxable persons should be aware of:

failure to submit VAT recapitulative statements on time and submission of incorrect or incomplete recapitulative statements (fines between 500 and 5,000 lei).
failure to submit, by the deadlines provided by law, declarations for tax registration, cancellation of tax registration, or mentions (fines between 500 and 5,000 lei).

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