, ,

Latest Updates in Romania: B2B E-invoicing Mandate for High-risk Products and E-transport System

Enis Gencer
January 24, 2022

With the most significant VAT gap in the EU (34.9% in 2019), Romania has been moving towards introducing a continuous transaction control (CTC) regime to improve and strengthen VAT collection while combating tax evasion.

The main features of this new e-invoicing system, e-Factura, have been described in an earlier blog post. Today, 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:  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.

Take Action

Need to ensure compliance with the latest Romanian regulatory requirements? Speak to our team. Follow us on LinkedIn and Twitter to keep up-to-date with the latest regulatory news and updates.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Enis Gencer

Enis Gencer is Regulatory Counsel at Sovos and is based in Istanbul, Turkey. With experience in compliance and legal consultancy he currently undertakes the legal monitoring and analysis of the regulations regarding electronic documents. Enis graduated from Istanbul University Faculty of Law.
Share This Post
Share on facebook
Share on twitter
Share on linkedin
Share on email

E-Invoicing Compliance EMEA
May 20, 2022
What Businesses Need to Know About the Romanian E-Transport System

Romania is introducing a mandatory e-transport system from 1 July 2022 to monitor the transport of certain goods in the national territory, an initiative that will operate in parallel with the newly launched continuous transaction controls (CTCs) system for e-invoicing. This means that in a little over a month’s time, the issuance of an e-transport document […]

North America ShipCompliant
May 18, 2022
Marketing Strategy 2022: Key Elements for Successful Wine e-Commerce

By Chloe Cristallini, Marketing Manager for Bloom Studio Recently, one of our webinar attendees asked, “What advice would you give someone who is first starting to sell alcohol DtC, or who wants to grow their DtC channel?” Buying a bottle of wine should be as easy for people as buying a pair of shoes. Other […]

EMEA
May 18, 2022
Trends in VAT Audits – EU Focus on E-commerce

Continuing our series on VAT audits, we take a closer look at the trends we’ve seen emerging in the activities of the EU Member States’ independent tax administrations throughout the European Union. In a recent report from the European Commission (EC) specific guidelines were published not only on best practices but also on how EU […]

EMEA IPT
May 18, 2022
Deep Dive – Insurance Premium Tax in France

France is known for its challenging Insurance Premium Tax (IPT) filing system. Understanding which tax authorities you need to register with, file with and talk to when you have questions is essential to meeting your business’s IPT compliance obligations. In this blog, we identify France’s IPT tax authorities and explain what makes IPT so different […]

EMEA VAT & Fiscal Reporting
May 17, 2022
VAT for Virtual Events – Exemption, Hybrid Events and Reduced Rates

In a recent blog, we considered the upcoming changes to the VAT treatment of virtual events. Today, we will consider some of the issues that may arise. Exemption from VAT Many hosts currently use the available educational or fundraising exemptions, especially where the delegates are private individuals without the right of deduction, e.g., doctors. For […]