Romania comes under the EU VAT regime, and is part of the European Union single market economy. VAT Directives are issued by the EU which lay out the principles of the VAT regime to be adopted by the member states. These Directives take precedent over the local legislation.
Click here to read about the 5% VAT increase to 24%, June 2010
Romanian VAT Law
Romanian VAT law is administered through the Romanian Ministry of Finance.
romanian VAT Registration
Foreign companies may register in Romania for VAT without the need to form a local company – known as non-resident VAT trading. There is no VAT threshold in Romania for the registration of non-resident traders – a VAT number must be in place before the commencement of taxable supplies.
There are strict rules on the situations where a registration is permitted. Common scenarios which require a Romanian VAT registration include:
- Importing/exporting goods into/out of Romania;
- Acquiring goods/services from other EU states into Romania;
- Organising live events, conferences etc in Romania;
- Holding goods in a warehouse in Romania as stock for resale;
- 'Supply and install' services; and
- Distance selling to private individuals in Romania, e.g. internet retailing
romanian VAT Compliance
There are detailed rules controlling the recording and processing of Romanian transactions. These include guidelines on:
- Romanian invoice requirements;
- Use of the 'Reverse Charge' procedure
- Foreign currency reporting and translation;
- Correcting errors from prior returns;
- Credit notes and corrections; and
- What accounting records must be maintained.
romanian VAT Rates
The standard VAT rate in Romania is 24%. There is a reduced rate of 9%. Click her to read about 5% increase 26 June 2010.
There are many variations to the rates above, including exempt taxable supplies. Please contact us to learn more:
ROMANIAN VAT Returns
Companies with a Romanian VAT number must submit periodic returns detailing all taxable supplies (sales) and inputs (costs). Generally, VAT returns submitted by non-resident traders in Romania are submitted monthly by the 25th of the month following the reporting month-end.
romanian FISCAL representative
While it is not necessary to appoint a Fiscal Representative in Romania for EU businesses wishing to VAT register in Romania, it is necessary to have an agent based in Romania who can act for the company and where the Romanian tax authority can, if required, communicate, conduct tax inspections, and examine invoices and book records.
It is however a requirement that non-EU businesses appoint a Fiscal Representative.
romanian RECAPITULATIVE REPORT and intrastat
In addition to VAT returns in Romania, companies may be required to submit additional statistical information.
The Romanian EC Sales List, which is part of the Recapitulative Report, must be completed and submitted monthly by the 25th of the month following, to account for Intra-community despatches of goods and services. The Recapitulative Report also includes a reporting requirement for acquisitions (receipt of goods & services received from other EU states).
For goods only, if certain thresholds are exceeded, either for despatches or arrivals, an Intrastat report must be completed and submitted to the Romanian statistical office. The report must be submitted monthly by the 15th of the month following the reporting month.
romanian VAT Refunds
If a foreign company is providing taxable supplies in Romania, but unable to obtain a Romanian VAT number, or simply incurring Romanian VAT on local goods or services, then Romanian VAT may be recovered through a VAT reclaim.
For more details, click here to read about our VAT Recovery service.
how TMF can help you in romania
If you require assistance with VAT in Romania or beyond, TMF would be delighted to help. Our UK central co-ordination centre can help; they can also put you in touch with TMF Bucharest.
+44 (0)870 067 8881