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Romania is in the midst of a fiscal revolution, transforming the way businesses handle their finances. The rapid shift towards electronic invoicing (e-invoicing) and electronic reporting (e-reporting), driven by the National Tax Administration Agency (ANAF), is reshaping the country's financial landscape.
With a law published in October 2023, Romania is gearing up for mandatory e-reporting and e-invoicing, set to take effect from the 1st of January 2024. Let’s delve into the details and the profound impact the changes will have on Romanian businesses.
The Current Landscape
The RO e-Factura system and business-to-government (B2G) e-invoicing obligation
At the core of this modernisation journey lies the RO e-Factura system, established under Ordinance no. 120 of October 4, 2021 - which governs the system’s administration, operation and implementation.
From the 1st of July 2022, Romanian economic operators became obliged to issue electronic invoices and transmit them through the national RO e-Factura system when conducting transactions with public-sector entities. To participate in this transition, businesses need a qualified digital certificate and SPV (Serviciul Spațiul Privat Virtual) access, available through the ANAF portal.
This system aims to make e-invoicing accessible to all. Even economic operators registered in the RO e-Factura Register without an automated solution, can leverage the IT application provided by the Ministry of Finance, ensuring inclusivity and ease of adoption.
High fiscal risk business-to-business (B2B) transactions
Further expanding its e-invoicing obligations, Romania mandated the use of RO e-Factura for companies dealing with high tax risk products, such as vegetables, fruits, alcoholic beverages, new constructions, and mineral products. In effect also since the 1st of July 2022, the obligation applies to all transactions, regardless of the recipient's registration status in the system.
The invoices are validated and, if they comply with the specific structure according to the standard RO_CIUS, the electronic signature of the Ministry of Finance is applied and communicated immediately to the recipient. Since the use of RO e-Factura is not yet mandatory for all businesses in the country, in cases where the recipient is not registered in the system, the issuer must then still deliver the invoice outside of the platform.
Plans of expanding the obligation to business-to-consumer (B2C) invoices
The Ministry of Finance continues measures against tax evasion and introduces mandatory, electronic invoicing for the relationship between companies and final consumers (B2C) from the 1st of January 2025. Consequently, all taxable persons issuing invoices to consumers will have to report them in the RO e-Invoice system
VAT directive derogation
Perhaps the most game-changing development came on the 25th of July 2023, when Romania secured a derogation from VAT Directive articles 218 and 232. This landmark development paves the way for mandatory e-invoicing in domestic B2B transactions from the 1st of January 2024, until the 31st of December 2026.
E-invoicing and e-reporting obligations under the draft law on fiscal and budgetary measures
The law has a clear and crucial purpose: to combat tax evasion through targeted measures and sanctions against illegal acts and trade activities. To achieve this, it introduces a phased implementation approach, encompassing first e-reporting, followed by e-invoicing.
E-reporting from 1st of January 2024 - penalties grace period
This phase introduces strict deadlines: all invoices issued by Romanian established businesses, regardless of their VAT registration status, as well as non-established businesses with Romanian VAT registration, must be reported to the RO e-Factura system within five working days from their issuance. This approach aligns closely with the Hungarian and Spanish (near) real-time reporting systems already in place. Non-compliance with these provisions will result in penalties, with varying fines contingent on the legal entity's classification. However, there is a grace period extending from 1 January to 31 May 2024 (initially only until the 31st of March 2024), during which non-compliance is not penalised.
It’s important to note that this e-reporting requirement will not apply to exports and intra-community supplies of goods.
E-reporting from 1st of June 2024 - penalties imposed
The initially stipulated grace period until the 31st of March was extended and, based on a recent emergency order issued by the Romanian Government, the penalties for businesses not complying with the e-reporting regulation will now be imposed from the 1st of June 2024.
Following the grace period, non-compliance with the e-reporting mandate will incur penalties and fines, with the amount varying based on company size.
E-invoicing from 1st of July 2024
From July 2024, all Romanian taxpayers conducting domestic B2B transactions must adopt the national RO e-Factura platform for invoice exchange. The Romanian model is inspired by the systems implemented in Italy and, coming soon, in Poland, characterised by a centralised exchange approach.
Ensuring e-invoicing compliance
For businesses not only in Romania, but all over the world, mandatory electronic invoicing is fast becoming a reality.
To ensure your business becomes and remains compliant, it is vital to partner with an electronic invoicing provider who complies with many global countries. At Banqup Group, we are tax compliant in over 60 countries around the globe, a figure that is growing day by day.
We work with your business to create the most ideal compliant e-invoicing solution for your needs, where you can tap into value added benefits to make business transactions even easier.
Take a look at our compliant e-invoicing solution today, and start having a conversation with a member of our local team.