Update: 3 January 2024 by Inês Carvalho
Romania Issues Last-Minute Amendments to B2B E-invoicing Regulations
After the implementation of Romania’s new B2B e-invoicing regulations, effective January 2024, the country introduced Government Emergency Order No. 115/2023 with last-minute amendments.
We can summarise the key amendments from the new legislation in three categories:
1. Exemptions from the e-reporting and e-invoicing mandate are clarified
The e-reporting mandate explicitly excludes the following transactions:
- Intra-community supplies and exports
- Supplies of goods or services made to taxable entities not registered or established in Romania
- Simplified invoices issued for supplies of goods or services
- Provisions of services for which the invoice is not subject to invoicing rules applicable in Romania
2. New five-calendar-day deadline to report e-invoices from July 2024
From July 2024 onwards, the requirement to issue e-invoices for transactions between established entities persists. The amendment states that in the event of a taxpayer’s failure to generate an electronic invoice, they are obligated to submit it to the RO e-Factura platform within five calendar days.
3. Penalties for businesses in the scope of e-invoicing
From July 2024, established entities that fail to comply with the issuance and receipt of e-invoices will receive a fine equal to 15% of the total invoice amount.
Additionally, those who fail to report the invoice which was not issued and automatically transmitted to the RO e-Factura within the additional five calendar days will be fined:
- RON 5,000 (€1k) to RON 10,000 (€2k) for legal entities classified as large taxpayers
- RON 2,500 (€500) to RON 5,000 (€1k) for legal entities classified as medium taxpayers
- RON 1,000 (€200) to RON 2,500 (€500) for other legal entities and individuals
Read our dedicated Romania e-invoicing page for more information on the mandate or see this overview on VAT Compliance in Romania.
Update: 20 September 2023 by Inês Carvalho
Romania Publishes Draft Legislation For B2B E-invoicing Mandate
The Romanian Ministry of Finance has published draft legislation proposing new budgetary measures, among which is the implementation of the highly anticipated electronic invoicing mandate.
Even though the draft legislation maintains the January 2024 roll-out date previously approved by the EU Council, it proposes an invoice reporting system to operate in the first six months with the electronic invoicing system (RO e-factura) being fully implemented in July 2024.
Additionally, a three-month grace period – from January 2024 to March 2024 – is foreseen where penalties are not imposed.
For more information see this overview about e-invoicing in Romania.
Romania’s new B2B e-invoicing mandate timeline:
- January 2024 – Established taxable persons, as well as VAT-registered taxable persons, must submit their invoices in the RO e-factura system within five days of issuance for the purpose of reporting the invoice data
- April 2024 – Fines will become applicable to non-compliant taxpayers
- July 2024 – The system shifts to an invoice clearance system which also transmits the invoice to Romanian-registered trading parties
The first phase of implementation where taxpayers report invoices to the RO e-factura system – instead of issuing the invoices directly through that system – is an addition of the draft law.
This reporting obligation is a transitional measure to help businesses prepare and adapt their systems to the new e-invoicing requirements. Between January and June 2024, the draft legislation also foresees an obligation for the supplier to send the cleared invoice out-of-band to the buyer whenever the latter is not registered with the RO e-factura system.
The scope of the new B2B draft mandate applies to all B2B transactions carried out by established or VAT-registered suppliers deemed to take place in Romania.
Looking to better understand e-invoicing regulations ahead of Romania’s mandate? Our guide can help.
Update: 28 July 2023 by Enis Gencer
Romania Authorised to Implement Mandatory B2B E-Invoicing
The EU Council has approved the proposal from the EU Commission to authorise Romania to introduce mandatory e-invoicing starting from January 2024. The decision was adopted on 25 July and published in the Official Journal of the EU on 27 July.
Romania’s e-invoicing journey
Romania has been progressing towards implementing a continuous transaction controls (CTC) e-invoicing regime for some time now. The country introduced the e-invoicing requirement for B2B transactions of high-fiscal risk products in December 2021 and B2G transactions in May 2022, both implemented as of July 2022.
In addition to these requirements, Romania aims to make e-invoicing mandatory for all B2B transactions. To this end, the country applied to the European Commission on 14 January 2022, requesting authorisation for a special measure to derogate from articles 218 and 232 of Directive 2006/112/EC, which was granted on 25 July. This measure would allow for the introduction of mandatory electronic invoicing for all transactions carried out between taxable persons established in Romania.
Key takeaways from the derogation decision
- The derogation will be effective from 1 January 2024. This means that Romania can enforce mandatory e-invoicing for all B2B transactions starting from January 2024, following the amendments in the local legislation.
- The derogation will remain valid until 31 December 2026, or until the national transposition of the VAT in the Digital Age (ViDA) directive into Romanian law.
- The introduction of mandatory e-invoicing will replace the current obligation to report information on domestic supplies.
What’s next?
The Romanian authorities will need to make the necessary amendments to local legislation to implement mandatory e-invoicing, following the derogation decision received by the EU Council.
The Romanian tax authority, ANAF, is expected to issue an order within 30 days from the date of the derogation which will define the scope and timeline for the implementation of the mandate. The order will provide more specific details about the upcoming mandate.
Considering the mandate could come into effect as early as January 2024, it’s crucial that taxpayers start preparing their systems for mandatory e-invoicing from now.
Looking for guidance to comply with Romania’s upcoming e-invoicing mandate? Our expert team can help.
Update: 24 January 2022 by Enis Gencer
Romania’s B2B E-invoicing Mandate for High-risk Products and E-transport System
With the most significant VAT gap in the EU (34.9% in 2019), Romania has been moving towards a CTC regime to improve and strengthen VAT collection while combating tax evasion.
The main features of this new e-invoicing system, e-Factura, are described further down in this blog. Here, we’ll take a closer look at the roll-out for B2B transactions and the definition of high-fiscal risk products, as well as the new e-transport system that was introduced through the Government Emergency Ordinance (GEO) no. 130/2021, published in the Official Gazette on 18 December.
What are high fiscal risk products?
According to GEO no. 120/2021 (the legislative act introducing the legal framework of e-Factura), the supplier and the recipient must both be registered with the e-Factura system. The recently published GEO no. 130/2021 establishes an exception for high fiscal risk products and ensures that taxpayers will use the e-Factura system regardless of whether the recipients are registered.
In line with the GEO no. 130/2021, the National Agency for Fiscal Administration has issued an order to clarify which products are considered high fiscal risk products.
The five product categories are as follows:
- Vegetables, fruits, roots and edible tubers, other edible plants
- Alcoholic beverages
- New constructions
- Mineral products (natural mineral water, sand and gravel)
- Clothing and footwear
High fiscal risk products are defined based on the nature of the products, marketing method, traceability of potential tax evasion and degree of taxation in those sectors. Detailed explanations, as well as product codes, can be found in the Annex of GEO no. 130/2021.
The enforcement timeline of this requirement means that businesses that supply these types of products must be ready to comply with the new Romanian e-Factura system as follows:
- From 1 April to 30 June 2022: It will be voluntary to submit invoices in the Romanian e-Factura system
- From 1 July 2022: It will be mandatory to submit invoices in the Romanian e-Factura system
Looking ahead: introduction of an e-transport system
Another reform that shows the intention of the Romanian authorities to combat tax fraud and evasion is the introduction of an e-transport system.
Taxpayers will be required to declare the movement of goods from one location to another in advance. Once declared, the system will issue a unique number written on the transport documents. Authorities will then verify the declaration on the transport routes.
Moreover, it is stated in the justification letter that the e-transport system will interconnect with the Ministry of Finance’s current systems, Romanian e-invoice, and traffic control, much like similar initiatives in other countries, such as India, Turkey and Brazil.
The introduction of the e-transport system is still pending as the Ministry of Finance has not yet issued the order regarding the application procedure of the system. According to GEO 130/2021, the Ministry of Finance had 30 days to do so after GEO 130/2021 was published in the Official Gazette. However, the deadline expired on the 17 January, and no announcement has been made yet. Therefore, the details of the system are still unknown.
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Update: 16 November 2021 by Joanna Hysi
E-Factura – Romania’s New E-invoicing System
In March 2020, Romania launched an e-invoicing pilot program, e-Factura, to streamline the collection of taxes to improve and strengthen the collection of VAT whilst combating tax evasion.
The decision to launch e-Factura was taken after closely monitoring the Italian e-invoicing model and analysing the economic impact and efficiencies that electronic invoicing has had for both B2G and B2B transactions in Italy.
E-Factura is to implement a new e-invoicing system for B2G transactions but also lays the foundation for the extension of the platform for further developments and provides the necessary know-how to develop an e-invoicing system in B2B.
In October, Government Emergency Ordinance (GEO) no. 120/2021 introduced the legal framework for implementing e-Factura, regulating the structure of the Romanian e-invoice process and creating the framework for achieving basic technical specifications of the e-invoice system.
Further documentation regulating the use and operation of e-Factura and technical documentation such as API specifications and draft e-invoice schemas have also been published.
According to published documentation, the B2B e-invoicing process is not expected to differ from the B2G e-invoicing process, whose framework and relevant requirements are defined to a clearer standard.
Taxpayers can expect the same requirements to apply to B2G and B2B e-invoicing. However, certain aspects for B2B e-invoicing must still be clarified, such as the authentication process and requirements for accessing and using the e-invoicing system through the API for taxpayers and their service providers.
Main features of e-Factura
The Romanian e-Factura went live as a voluntary system on 6 November 2021, just six months from the announcement of the Ministry of Finance of the roll-out of a new e-invoicing system and only one month after publication of enacting legislation. Suppliers in both B2B and B2G transactions may opt to use this new e-invoicing system and issue their e-invoices in the Romanian structured format through the new system.
The Romanian e-Factura is a clearance system where e-invoices are sent, cleared, and received through the central platform. The structured invoice is issued in XML format and sent to the central platform for validation. The validation checks relate to the compliance of the structured invoice with the schema requirements, the authenticity of the origin regarding the identity of the issuer who is authenticated in the system and the integrity of the invoice content after transmission. An XML invoice that passes validation and is signed by the Ministry of Finance is considered the legal invoice.
Final remarks
The initial implementation timeline must be – by international comparison – considered short for the roll-out of an extensive new CTC system. This could be explained by the fact that the roll-out of the voluntary system is not as disruptive as that of a mandatory system.
If, or when, a mandate is announced or relevant e-invoicing incentives are introduced, a longer implementation timeline is likely to follow to facilitate for taxpayers to comply with the new requirements in time.
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