Understanding eInvoicing in Romania

by | Aug 19, 2024 | E-invoicing

Updated on August  19th, 2024

 

Why Romania Decided to Implement B2B eInvoicing

Romania decided to implement eInvoicing to reduce tax evasion and close the VAT gap, which was the largest in the EU in 2019. The digitization of invoices is in line with the EU eInvoicing Directive 55/2014/EU and the VAT in the Digital Age (ViDA) proposal. The introduction of eInvoicing is also part of Romania’s broader strategy to embrace the digital age.

Romanian e-Factura has important advantages for both the public administration and the private sector:

  • It provides a real-time overview of budget execution and, in the next step, of business-to-business (B2B) transactions;
  • It contributes significantly to the reduction of VAT fraud at national level and within the European Union. It’s also going to reduce losses related to tax evasion;
  • Its system is going to be interconnected with the other systems of the EU Member States;
  • It ensures the possibility for any entity from any Member State of the European Union to participate in the public procurement process;
  • The system will provide real-time data, which will lead to the efficiency of the collection process and, implicitly, to ensure the investment needs of the Romanian State;
  • Efficiency, predictability and transparency in the expenditure of funds by public institutions;
  • Will contribute to the development of the documentary verification mechanism (desk – audit – ANAF control – remote antifraud) for compliance and prevention actions;
  • The data collected through this system will support more detailed predictive analyses of economic evolution, identifying asymmetries in the economy and implementing relevant fiscal policies that ensure a natural framework for the development of the business environment;
  • Eliminate the weaknesses of the old paper accounting system.

The implementation of the pre-filled RO e-VAT declaration was approved in August 2024 for taxable persons registered for VAT purposes in Romania. The pre-filled RO e-VAT declaration must be sent to taxpayers, for each reporting period, electronically, by the 5th of the month following the legal deadline for submitting the VAT return (D300).

The legal provisions regarding the pre-filled RO e-VAT return come into force on January 1, 2025, and for taxable persons applying the VAT on collection system, the provisions will apply from August 1, 2025 (Source PwC Romania).

Important Aspects of eInvoicing in Romania

The e-Facture implementation process will be carried out in two phases, as follows:

In the first stage, between January 1, 2024 and June 30, 2024, economic operators – taxable persons established in Romania, whether or not they are registered for VAT purposes, have the obligation to report in the national electronic invoicing system RO e-Factura all invoices issued in the B2B relationship and in the relationship with public institutions, with the exception of those issued in the B2G relationship, for which there is an obligation to use RO e-Factura from July 1, 2022.

The Ministry of Finance has issued an Emergency Ordinance extending the soft landing period for electronic reporting until May 31, 2024. As of July 1, the mandate evolves into a full B2B e-invoicing exchange mandate (a centralized clearing and exchange model). The period of no sanctions/penalties is now extended to support companies in “…further adapting their procedures/systems for the transmission of invoices in the national electronic invoicing system RO e-Factura”.

In the second stage, starting from July 1, 2024, the issuers of electronic invoices have the obligation to transmit them to the recipients, using the national electronic invoice system RO e-Factura.

Also, as of January 1, 2024, the non-established taxable persons registered for VAT purposes in Romania will be obliged to register in the national electronic invoicing system RO e-Factura all the invoices issued in the B2B relationship for the supply of goods and services with the place of delivery or supply in Romania.

The following transactions are exempted from the obligation to use the national electronic invoicing system RO e-Factura:

  • Supplies of goods dispatched or transported outside the European Union by the supplier or another person on his behalf;
  • supplies of goods dispatched or transported outside the European Union by the purchaser who is not established in Romania, or by another person on his behalf, with the exception of goods carried by the purchaser himself and used to equip or supply boats and recreational craft or other means of transport for private use;
  • intra-Community supplies of goods.

Archiving Period: Electronic invoices and messages communicated between the issuer and the recipient will remain available in the RO e-Factura system for 60 days and will then subsequently be archived electronically and obtained only on request. Senders and receivers must keep all invoices (issued and received) for at least 10 years.

Electronic Signatures: Romania already has existing rules in place around digital signatures. No electronic signature is required for eInvoices.

Romanian National eInvoicing Platform: The RO eInvoicing platform has been available since November 2021 for both the exchange of invoices with public administrations (B2G) and between private companies (B2B).

Digital reporting requirement: From 2022, all Romanian companies and all foreign companies registered in Romania for VAT purposes have to report their tax and accounting information in SAF-T format. More about SAF-T we explained in our previous blog post.

Relevant Romanian Governmental Websites:

B2G e-invoicing in Romania

As of July 1, 2022, eInvoicing became mandatory for Business-to-Government (B2G) transactions according to Law 139/20224. All transactions with Romanian public bodies must issue electronic invoices through the national invoicing system RO e-Factura.

Looking Ahead

The eInvoicing landscape in Romania is evolving rapidly. By staying informed about regulations and exploring available solutions, businesses can prepare for the transition and reap the benefits of electronic invoicing.

eInvoicing is becoming increasingly important in both B2B and B2G transactions across Europe. A few years ago, it was mostly voluntary and only those who were aware of the security, convenience and data automation benefits of eInvoicing took advantage of it. Today, if you are a company registered in Romania or have Romanian business partners, you need to comply with B2B e-invoicing regulations both in Romania and in your country of registration.

If you need to comply with eInvoicing requirements not only in Romania, but also in other countries, you need to choose an international eInvoicing provider. At SPS Commerce, we elevate more than 120,000 companies around the globe with secure and compliant solutions.

Aleksandra Vovchenko
Latest posts by Aleksandra Vovchenko (see all)

RELATED POSTS