Romania becomes another EU country to introduce mandatory e-invoicing for domestic business to business transactions. Read more about the steps and implementation of this fiscal policy in the article.
Mandatory e-invoicing for B2B transactions in Romania from July 2024 - what it means and what led to this
Romania is in the midst of a fiscal revolution, transforming the way businesses manage their finances. The rapid move towards e-invoicing and e-reporting, driven by the National Tax Administration Agency (ANAF), is changing the financial landscape in the country.
With a recently published draft law, Romania is preparing for mandatory e-reporting and e-invoicing to come into force on 1 January 2024.
Let us go into the details and the profound impact the changes will have on Romanian business.
Current situation
RO e-Factura and the obligation of businesses to the government for electronic invoicing
The basis for this modernisation is the Romanian RO e-Faktura system, established in accordance with Regulation No 120 of 4 October 2021, which governs the administration, operation and implementation of the system.
As of 1 July 2022, Romanian economic operators are obliged to issue electronic invoices and transmit them via the national RO e-Factura system when transacting with public sector undertakings. In order to participate in this transition, companies 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 use the IT application provided by the Ministry of Finance, ensuring that it is easy to get up and running.
Extension of the obligation to certain business-to-business transactions
Further expanding its e-invoicing obligations, Romania is mandating the use of RO e-Factura for companies dealing with high tax risk products such as vegetables, fruit, alcoholic beverages, new constructions and minerals. Also effective from 1 July 2022, the obligation applies to all transactions, regardless of the recipient's registration status in the system.
Invoices shall be validated and, when compliant with the specific structure of the RO_CIUS standard, a Treasury electronic signature shall be applied and communicated immediately to the recipient. As the use of RO e-Factura is not yet mandatory for all enterprises in the country, in cases where the recipient is not registered in the system, the issuer still has to deliver the invoice outside the platform.
Derogation from the VAT Directive
Perhaps the most significant event is when on July 25, 2023. Romania secures a derogation from Articles 218 and 232 of the VAT Directive. This landmark development paves the way for mandatory e-invoicing in domestic business-to-business (B2B) transactions from 1 January 2024 to 31 December 2026.
Electronic invoicing and electronic reporting obligations under the draft law on fiscal and budgetary measures
The Bill has a clear and key objective: to combat tax evasion through targeted measures and sanctions against illegal activities and commercial activities. In order to achieve this, it introduces a phased implementation approach involving electronic reporting first, followed by electronic invoicing.
Electronic reporting from 1 January 2024 - penalty grace period
This phase introduces strict deadlines: all invoices issued by companies established in Romania, regardless of their VAT registration status, as well as non-established companies with VAT registration in Romania, must be reported to the RO e-Factura system within five working days of their issue. This approach is closely in line with the Hungarian and Spanish (almost) real-time reporting systems already in place. Failure to comply with these provisions will result in penalties, with different fines depending on the classification of the legal entity. However, there is a grace period from 1 January to 31 March 2024 during which non-compliance is not penalised.
* It is important to note that this electronic reporting requirement will not apply to exports and intra-Community supplies of goods.
Electronic reporting from 1 April 2024 - penalties imposed
After the grace period, failure to comply with the e-reporting mandate will result in penalties and fines, with the amount varying depending on the size of the company.
Electronic invoicing from 1 July 2024
From July 2024 onwards, all Romanian taxpayers carrying out domestic business-to-business (B2B) transactions must adopt the national RO e-Factura invoice exchange platform. The Romanian model is inspired by the systems implemented in Italy and soon in Poland, characterised by a centralised exchange approach.
Ensuring compliance with electronic invoicing
For businesses not only in Romania, but around the world, mandatory e-invoicing is fast becoming a reality.
To ensure that your business is compliant with all tax laws, it's important to partner with an e-invoicing provider that is constantly on the lookout for changes.
Banqup operates in over 60 countries and tracks legislative tax changes in each country where it operates and works in accordance with the most up-to-date requirements. Try Banqup for free here.
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