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E-invoicing: An Overview

Turkey was an early adopter of electronic invoicing when considering the global landscape of tax digitization. As part of its larger e-Transformation initiative, the country mandated e-invoicing in 2014.

Understanding the complexities of Turkey e-invoicing and its other electronic systems can be challenging, however, and that’s why this page exists. Be sure to avoid penalties for non-compliance by exploring this mandate overview – and bookmark the page to ensure you are always on top of any regulatory changes.

Want to speak to a tax expert? Get in touch with our compliance team.

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Table of contents

1. At a glance: E-invoicing in Turkey

2. Who needs an e-invoice in Turkey?

3. How to issue an e-invoice

4. What are the benefits of e-invoicing in Turkey?

5. Legal requirements for an e-invoice in Turkey

6. E-invoicing software

7. The future of e-invoicing

8. Additional obligations for VAT compliance in Turkey

9. FAQ

10. How to be compliant with Sovos

11. Related resources

At a glance: E-invoicing in Turkey

Turkey B2B e-invoicing

CTC Type

• E-invoice clearance with two-way application

Network

• GIB portal

Format

• UBL-TR 1.2

eSignature Requirement

• Fiscal stamp or qualified electronic signature required

Archiving Requirement

• 10 years

Turkey B2G e-invoicing

CTC Type

• E-invoice clearance with two-way application

Network

• GIB portal

Format

• UBL-TR 1.2

eSignature Requirement

• Fiscal stamp or qualified electronic signature required

Archiving Requirement

• 10 years

Who needs e-invoicing in Turkey?

The scope that mandates e-invoicing usage in Turkey has evolved over time. Considering the cost of non-compliance, it is important to know if you fall under the requirements of the regulation.

Companies with turnovers exceeding TRY 3 million are required to use electronic invoices, though there are also sector-based parameters for the mandate that ignore the turnover threshold. This turnover exception includes:

• Companies licensed by the Turkish Energy Market Regulatory Authority
• Middlemen or merchants that trade fruits or vegetables
• Online service providers that facilitate online trade
• Importers and dealers

How to issue an e-invoice?

Before getting started with issuing and receiving electronic invoices in Turkey, taxpayers are required to register on the tax authority’s GIB portal. They need their Vergi Kimlik Numarasi – a 10-digit tax identification number – for a successful registration.

Once registered, taxpayers have a few options for issuing electronic invoices. They can either use the GIB portal, integrate the portal with their own internal applications or use a vendor like Sovos (which has its own Turkey e-invoice solution).

 

 

What are the benefits of e-invoicing in Turkey?

Besides the fact that e-invoicing is mandatory for many businesses and all public administrations in Turkey, there are several benefits of invoicing electronically.

• Cost-saving: Reducing paper, postage and manual labour saves money
• Time-saving: Using structured, automated electronic systems and processes saves time
• Compatibility: The universal format of e-invoices and systems increases interoperability
• Security: The automation, validation and authentication of e-invoices maintain integrity

Legal requirements for an e-invoice in Turkey

The e-invoice mandate in Turkey requires taxpayers to include specific information on electronic invoices. These requirements include:

• Invoice date
• Invoice reference number
• Description and specification of goods and services delivered
• Total net amount and gross amount for the order
• Supplier details (name, address, tax ID, etc)

E-invoices are required to be secured with an eSignature. Individuals must use a Qualified Electronic Signature (QES), a more secure version of an electronic signature.

From September 2023, it will also be mandatory to include a QR code on electronic invoices (as well as other electronic document types).

E-invoicing software

E-invoicing software allows you to create and send electronic invoices online. Solutions need to meet the specifications set forth by the Turkish Revenue Authority, either integrating into your existing system or serving as a cloud platform.

Sovos’ e-invoice compliance solution allows customers to meet their compliance requirements, both in Turkey and globally. If you are part of an international organisation, our platform allows you to stay compliant wherever you do business.

The future of e-invoicing

Turkey is well ahead of most when it comes to the digitization of its tax system. This includes utilising electronic invoices, with the country mandating the use of e-invoices for specific companies on 1 April 2014. Find out more about Turkey’s e-Transformation.

That said, tax digitization is still developing globally. In the EU, the VAT in the Digital Age initiative aims to digitize tax across the region. If passed, this proposal could produce major changes to how businesses operate across the European Union – including using e-invoices and digital reporting.

The rapid yet fragmented digitization of tax worldwide only increases the importance of working with a global compliance partner like Sovos. It’s vital to take a long-term view when dealing with compliance.

Additional obligations for VAT compliance in Turkey

Turkey has a vast digital tax system comprised of many electronic systems and documents. It stepped up its tax system in 2012 with its e-Transformation initiative and produced a host of potential compliance requirements for taxpayers.

As well as e-invoicing, there are other related requirements organisations must be aware of. These include:

• e-Arşiv Fatura
• e-İrsaliye
• e-Defter
• e-Mutabakat
• e-Müstahsil Makbuzu
• e-Serbest Meslek

FAQ

What is e-invoicing?

Turkey e-invoicing is a mandate that requires certain taxpayers to issue and receive invoices electronically. According to the TRA’s regulations, taxpayers with annual revenue of over 3 million TL must register in the e-invoicing system.

For whom is e-invoice mandatory?

Within the scope of the communiqué published by the Revenue Administration; as of July 1, 2022

• Taxpayers with a turnover of 5 million TL for the 2018, 2019 and 2020 accounting periods, 4 million TL for the 2021 accounting period and 3 million TL or more for the 2022 and subsequent accounting periods,
• Service providers who have a gross sales revenue of 1 Million TL for 2020 or 2021 account periods, 500 thousand TL or more for 2022 and subsequent account periods;
  • Service providers who provide electronic commerce environment for the execution of commercial activities on the internet to mediate the purchase, sale, rental or distribution of goods or services,
  • Owners or operators of websites that publish advertisements related to the sale or rental of real estate, motor vehicle vehicles belonging to real and legal persons on the internet, and internet advertising service agents who are engaged in mediating the publication of advertisements on the internet,
• Those who have a gross sales revenue of 1 Million TL for the 2020 or 2021 account periods, 500 thousand TL or more for the 2022 and subsequent accounting periods;
  • Those who sell goods or services on their own or their intermediary service providers’ websites or any other electronic environment,
• Taxpayers who have a gross sales revenue of 1 Million TL for the 2020 or 2021 accounting periods, 500 thousand TL or more for the 2022 and subsequent accounting periods
  •  Those who make real estate and/or motor vehicle, construction, manufacturing, purchase, sale or rental transactions and taxpayers who are in mediatory activities for these transactions,

• Hotel businesses that provide accommodation services by obtaining investment and/or operating certificates from the Ministry of Culture and Tourism and municipalities, which have a gross sales revenue of 1 million TL for 2020 or 2021 accounting periods, 500,000 TL or more for 2022 and subsequent accounting periods, must switch to e-invoice.

Also:

• EMRA licensed taxpayers in the list numbered ÖTV I (Special Consumption Tax),
• Taxpayers who manufacture, build, and import the goods in the list numbered ÖTV III,
• Taxpayers who trade fruits and vegetables as brokers or traders,

• Health service providers who have signed a contract with the Social Security Institution and all taxpayers who supply medical materials and drugs/active substances (hospitals, medical centers, branch centers, dialysis centers, other specialized treatment centers licensed from the Ministry of Health, diagnosis, examination and imaging centers, laboratories, pharmacies, medical device and material suppliers, optician institutions, hearing center, spas, private law legal entities that offer and/or produce human medical products/products and their branches that do not have legal personality, pharmaceutical warehouses, etc.) also have to use e-Invoice.

How to cancel an e-invoice?

The cancellation and return process of an e-invoice is the same as the paper invoices when viewed technically. However, in practice, some processes vary.

Find out more about cancelling and refunding electronic invoices in Turkey.

Should the e-Invoice be printed out after it is issued?

After switching to the e-invoice application, you cannot issue a paper invoice for e-invoice users. After switching to the e-invoice system, the option period granted to you is limited to seven days. During this time, you can continue to issue paper invoices.

Do I need to archive an e-invoice?

In Turkey, e-invoices must be archived for 10 years.

Penalties for not complying with e-invoicing in Turkey

Failure to comply with Turkey’s e-invoicing mandate may result in a financial penalty which equates to 10% of the value of the missed electronic invoice(s) in question. The maximum amount a taxpayer can be penalised in a year changes annually. Currently, the maximum is TRY 1,700,000.

How to switch to e-Invoice?

1. Direct Integration: Businesses can prepare their own computing infrastructures within the framework of the infrastructure and quality certifications specified by the Revenue Administration Department with technical guidelines. They can carry out their processes with their own infrastructures that work integrated with the GIB. 
2. GİB Portal: The application can be used by entering invoices through the Revenue Administration Portal served by the Revenue Administration. 
3. Special Integratorship: Companies such as Sovos, which have received a special integrator permission from the Revenue Administration, can be easily started by quickly switching to the e-Invoice application.

Is e-invoice easy to use?

It is very easy to use e-invoices with Sovos. If taxpayers who will electronically invoice with the special integrator method prefer the Sovos solution, they are given all kinds of support for an easy transition to e-invoice.

How are e-invoices backed up and stored?

Unlike the GİB Portal method, there is no additional process required for e-invoice backup and storage with Sovos. If taxpayers who use e-invoice with the private integrator method prefer the Sovos solution, all incoming and outgoing invoices are stored securely in our developed infrastructure without paying an additional fee. (This retention is provided retrospectively for 10 years during the period of being a Sovos customer.)

Who is an e-invoice issuer?

Being obliged to use the e-invoice application within the framework of the conditions determined by the Revenue Administration is a term used for taxpayers. The regulations made regarding these conditions and limitations are announced by the notifications published by the GIB at regular intervals. In this context, many companies become e-invoice taxpayers within the scope of these requirements.

Can I continue to issue paper invoices after switching to the e-invoice application?

After switching to the e-Invoice application, you cannot issue a paper invoice for e-invoice users. After switching to the system, you are granted an option period of seven days. During this time, you can continue to issue paper invoices.

What should be the e-invoice sending time?

Since e-invoices are subject to the same provisions as paper invoices, the provision valid for paper invoices in Article 231 of Tax Procedure Law (VUK) No. 213 also applies to e-invoices. Accordingly, the issuance period for e-invoices is determined as seven days. According to the article, e-invoices must be created on the system and forwarded to the recipient within seven days.

How to integrate with ERP/Accounting software?

Companies using SAP can benefit from Sovos’ SAP Packages for an end-to-end e-Transformation solution and start using the product without additional integration. Companies that use other ERP/Accounting Software can use their products without additional integration with the Sovos ERP Adapter solution. In integration situations where the Sovos Adapter is not covered, companies can use the Sovos API Documents to integrate with the Sovos APIs. They can access and start integration via https://api.fitbulut.com/servis/#/eInvoice.

How do I manage incoming e-Invoices?

The management of e-invoices that come with the Sovos solution is in your hands. Thanks to our user-friendly interface, you can easily access the invoice you want and archive the invoices you make transactions with in a few clicks. In addition, by providing increased control over certain invoices with the colour, display and business rules you will determine on the invoices; you can facilitate the invoice management processes of your users.

To whom should the e-invoice be issued?

E-invoices are issued and received only between taxpayers who fall under e-invoicing obligations. The recipient and the sender must be registered in the GİB e-invoice application.

How can I understand that my customers are e-invoice users?

You can check whether your customer is registered on the electronic invoice from the e-Invoice-registered users list of the Revenue Administration. As another method, a query is made with VKN/TCKN from the e-invoice-registered user inquiry screens from the portal.

Can retroactive e-invoices be issued?

According to the Tax Procedure Law, the invoice must be issued within seven days from the date of service or delivery of the goods. It is possible to retroactively issue e-invoices if the seven-day period rule is followed. Technically, the portal has no restrictions.

Can I make changes to an e-invoice I sent?

No changes can be made to the e-invoice sent. In this case, a new electronic invoice is created upon the rejection of the invoice from the other side. Cancellation and refund transactions vary in basic e-invoicing and commercial e-invoicing scenarios.

How to be compliant with Sovos

Sovos has software that was built specifically to help customers meet their e-invoicing obligations in Turkey. Whether you integrate it into your system or use our cloud platform, it speeds up processes and provides immediate clarity for the status of your invoices.

As well as your organisation’s need to meet requirements in Turkey, the global tax digitization continues. If you operate internationally or plan to do so in the future, it’s becoming increasingly important to choose a compliance partner that monitors regulatory changes around the world. This is where Sovos steps in.

Organisations of all shapes and sizes trust Sovos with tax – including e-invoicing compliance – allowing them to focus more time and energy on their core business.

Get in touch with us

Related resources

Stay on top of the tax transformation with these resources.

What is Turkey's E‑Transformation?

While many governments and tax authorities are now on an e-Transformation journey, this trend began in Latin America in the early 2000s. Turkey followed suit a decade later when it began the digitization of its tax system.

Learn more

E-invoicing: Your Guide

E-invoicing isn’t new. It has existed for over three decades. Globally, e-invoicing adoption is growing with new mandates appearing each year and many tax authorities continuing to announce intentions to introduce measures.

Learn more

Keeping up with e-invoicing requirements has never been a bigger task, especially if you operate internationally. Join us as we share the latest information necessary to successfully navigate the latest updates to the global e-invoicing landscape. This webinar will cover:

• Expansion of Romania’s e-transport mandate since December 2023
• Development of Spain’s SIF/Verifactu requirement
• Postponements in Portugal
• The legislative process for B2B Public Administration mandatory e-invoicing in Germany and Belgium
• Important dates to be aware of in Poland
• Recent changes to Malaysia’s e-invoicing mandate
• Date changes and key features in Israel

Sovos​, the always-on compliance company,​ today announced a joint business relationship with the Belgian PwC Firm PwC Business Advisory Services bv/srl (hereinafter: “PwC​”),​ leveraging the companies’ complementary tax and advisory service expertise and solutions to address vital e-invoicing and e-reporting needs.

Through this joint business relationship, Sovos and PwC clients can access comprehensive services to adeptly tackle the ever-evolving regulatory challenges linked to e-invoicing and e-reporting, as additional countries look to join the more than 80 countries worldwide with existing e-invoice requirements.

Through implementation of the Sovos Compliance Cloud, organisations will be able to identify and document client e-invoicing regulatory requirements across various markets, evaluate existing processes and technology, and align business objectives. Introduced in February, the Sovos Compliance Cloud is the industry’s premier unified, cloud-based tax compliance and regulatory software platform that provides a holistic system of record for global compliance.

“As companies navigate an increasingly interconnected and dynamic marketplace, the need for ​a ​more integrated e-invoice process has never been more crucial,” said Ellen Cortvriend, partner, of PwC in Belgium. “The Sovos joint business relationship allows us to deliver excellence in an e-invoicing-led global tax compliance project today, with the ability to streamline the e-invoice process even more over time.”

“With many clients of PwC ​in ​Belgium facing imminent e-invoicing mandates, the Sovos Compliance Cloud platform ensures a quick and successful integration,” said Alice Katwan, president of revenue, Sovos. “Rapid and complex compliance changes create both tax and IT challenges, from needing immediate tax determination at the point the invoice is raised, to the integration of validated e-invoices with periodic and SAF-T reporting. By reducing the operational burden and providing a singular data view into their compliance posture, Sovos and PwC allow companies to unlock tremendous business value.”

For business leaders seeking to understand more about the events driving regulatory changes and strategies to stay ahead of the compliance risk curve, PwC and Sovos compliance experts will host a complementary webinar, Have We Hit a Tipping Point for Global Indirect Tax?, on 11 April 2024 at 2 p.m. GMT. Registration is now open.

About Sovos 
Sovos is a global provider of tax, compliance and trust solutions and services that enable businesses to navigate an increasingly regulated world with true confidence. Purpose-built for always-on compliance capabilities, our scalable IT-driven solutions meet the demands of an evolving and complex global regulatory landscape. Sovos’ cloud-based software platform provides an unparalleled level of integration with business applications and government compliance processes.

More than 100,000 customers in 100+ countries – including half the Fortune 500 – trust Sovos for their compliance needs. Sovos annually processes more than 11 billion transactions across 19,000 global tax jurisdictions. Bolstered by a robust partner program more than 400 strong, Sovos brings to bear an unrivaled global network for companies across industries and geographies. Founded in 1979, Sovos has operations across the Americas and Europe, and is owned by Hg and TA Associates. For more information visit https://sovos.com and follow us on LinkedIn and Twitter.

About PwC
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 151 countries with more than 364,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
© 2024 PwC. All rights reserved.

Stay updated on VAT Reporting and SAF-T with Sovos’ webinar. Explore legislative changes, prepare for VAT Recovery deadlines, and gain insights into SAF-T updates for Portugal, Bulgaria and Poland. Understand recovery claims essentials, crucial with the nearing 13th Directive deadline.

Malaysia CTC e-invoice Reporting:

From August 2024, e-invoicing in Malaysia will become mandatory for taxpayers with an annual turnover or revenue of more than RM100 million. The mandate will follow the continuous transaction control (CTC) model and will require e-invoices to be validated by the country’s tax authority, as well as reporting certain transactions. Rollout to all other taxpayers undertaking commercial activities in Malaysia will follow in 2025.

Read on for an overview of Malaysia e-invoicing requirements and bookmark this page to stay updated with the latest mandate developments.  

Table of contents

1. At a glance: Malaysia e-invoicing

2. E-invoicing in Malaysia: Key requirements and regulations

3. E-reporting regulations in Malaysia

4. Implementation timeline

5. Setting up e-invoicing and e-reporting in Malaysia

6. FAQ

7. Additional resources

At a glance: Malaysia e-invoicing

The issuance of an electronic invoice and submission for validation to the IRBM’s Platform (MyInvois) will be mandatory in Malaysia for certain determined transactions (e.g. automotive, aviation, construction).

For transactions where e-invoicing is mandatory, and in all other transactions where the buyer requests the issue of an e-invoice, the supplier will need to issue an e-invoice in XML or JSON format and submit it to the IRBM´s MyInvois platform for validation.

To comply with this e-invoicing requirement, taxpayers can use the MyInvois platform through the free solution offered by IRBM or integrate through specific APIs. A Software Development Kit has been released by the IRBM for this purpose.

The platform will perform certain validation checks, not only to the e-invoice structure but also to Taxpayer Identification Numbers (TIN). Once the e-invoice receives validation from IRBM, buyers are allowed to submit rejection requests stating the rejection reason.

On the other hand, suppliers can agree to such rejections and issue cancellations of the e-invoice during a 72-hour period.  

Following validation, suppliers handle the exchange of validated e-invoices. The exchanged e-invoice should include the original validated e-invoice, the validation link provided by the IRBM in the form of a QR code and a PDF copy.

The QR Code enables the verification of the existence and status of the e-invoice through the MyInvois portal.

Malaysia B2B e-invoicing

CTC Type
E-invoice reporting.

Network
E-invoices are processed via the MyInvois portal, however, they should be exchanged out-of-band.  

Format
XML or JSON.

eSignature Requirement
Mandatory. Use of local certificates required.

Malaysia B2G e-invoicing

CTC Type
E-invoice reporting.

Network
E-invoices are processed via the MyInvois portal, however, they should be exchanged out-of-band.

Format
XML or JSON.

eSignature Requirement
Mandatory. Use of local certificates required.

E-invoicing in Malaysia: Key requirements and regulations

From August 2024, Malaysian taxpayers with an annual turnover or revenue of more than RM100 million will be required to submit and clear e-invoices for certain transactions.

Malaysia e-invoicing adopts a continuous transaction control (CTC) approach. E-invoices must be submitted and cleared via MyInvois, the e-invoicing portal of the Inland Revenue Board of Malaysia (IRBM).

As of the 9 February 2024, the IRBM guidelines state that mandatory e-invoicing will be for specific sectors and transactions.

Sectors in-scope of mandatory e-invoicing include:

• Automative
• Aviation
• Luxury good and jewellery
• Construction
• Licensed betting and gaming
• Payments to agents, dealers and distributors

For cross-border transactions, Malaysian taxpayers must issue a self-billed e-invoice to document the expense, but foreign parties do not need to implement the Malaysia e-invoicing system.

B2C transactions fall outside of the mandatory e-invoicing scope. Any e-invoices for transactions not in scope are subject to the buyer’s request.

What is an e-invoice in Malaysia?

An e-invoice is a digital representation of a transaction between a supplier and a buyer that replaces all paper or electronic documents serving as invoices, credit notes and debit notes.

An e-invoice under the new framework is a structured file created in a defined format that can be automatically processed by the relevant systems.  The e-invoice structure includes 53 mandatory fields and must be submitted in either XML or JSON format.

An e-invoice will contain the same essential information as per current practices, such as supplier’s and buyer’s details, item description, quantity, price excluding tax, tax, and total amount.

Following the validation process, e-invoices must include an embedded QR code.  

PDFs, Doc, JPG and paper will not be considered as e-invoices.

What is the process flow of an e-invoice in Malaysia?

E-invoice issuance: Taxpayers must submit e-invoices to the IRBM via the MyInvois portal or through a third-party e-invoicing software API in XML or JSON format.

Validation: Once submitted, the e-invoice is validated in real-time and a Unique Identification Number, validation link (QR Code) and PDF format of the cleared e-invoice are sent to the supplier.

Validation notification: The IRBM performs certain validation checks on the e-invoice structure and on taxpayers identification numbers and notifies the buyer and supplier of the validated invoice.

E-invoice sharing: Suppliers should share the validated e-invoice and a visual representation with a QR code embedded. The QR code allows buyers to validate the existence and status of the e-invoice via MyInvois. It’s the supplier’s responsibility to share the document with the buyer.  

Rejection or cancellation: Optional rejection (buyer side) and optional cancellation (supplier side) requests have a 72 hour time limit, after which the invoice is considered valid. Any corrections or amendments made after the 72 hour limit will need to be made through credit, debit or refund notes.

Transaction Summary: A summary of the transaction can be viewed via the portal.

What are the types of e-invoices in Malaysia?

In Malaysia, the e-invoice mandate covers the below document types:

• Invoice
• Credit note
• Debit note
• Refund invoice
• Self-billed invoice

E-reporting regulations in Malaysia

For all other transactions that fall outside of the mandatory e-invoicing scope, and where the buyer did not request an e-invoice to be issued, suppliers can issue an invoice or receipt as per the current practices (e.g. paper).

However, in these cases, suppliers are required to instead issue a consolidated e-invoice aggregating all invoices and receipts on a monthly basis, within 7 days of the month end-. Consolidated e-invoices are common in Malaysia today, and this requirement allows this practice to continue, while still giving the IRBM access to aggregated transaction data. These consolidated invoice reports are issued to a ‘general public’, without specification of each buyer, and a general TIN is provided.

A description of the products or services is provided by the summary of each receipt presented as separate line items in the consolidated e-invoice and/or the list of receipts (in a continuous receipt number) presented as line items.

Additionally, when consolidated- e-invoices are issued, MyInvois will send notifications back to the supplier only. Rejections are not allowed from the buyer side and suppliers are not required to share the validated e-invoice with buyers.

Consolidation cannot be used for self-billed invoices.

Implementation timeline

2015: Malaysia introduces voluntary e-invoicing

October 2022: The Malaysian Ministry of Finance announces plans for e-invoicing pilot program for select taxpayers

November 2023: Mandatory e-invoicing implementation timeline is delayed to August 2024

February 2024: Inland Revenue Malaysia publishes Software Development Kit and e-invoicing guidelines

August 2024: Mandatory e-invoicing and clearance in Malaysia for taxpayers with an annual turnover or revenue of more than RM100 million (aprox. 20 million euros)

January 2025: Mandatory e-invoicing for taxpayers with an annual turnover or revenue between RM25 million (aprox. 5 million euros) and RM100 million

July 2025: Mandatory e-invoicing for all taxpayers

For the latest updates and in-depth timeline bookmark our Malaysia e-invoicing system blog.

Setting up e-invoicing and
e-reporting in Malaysia

Malaysia’s e-invoicing mandate allows submission of e-invoices via a third-party API. Sovos’ e-invoice and e-reporting compliance solutions are suitable for Malaysia and other international tax requirements.

Speak with a Sovos expert to set-up e-invoicing in Malaysia.

Complete the form below to speak with one of our e-invoicing experts

FAQ

Is e-invoicing mandatory in Malaysia?

E-invoicing will become mandatory for certain transactions for taxpayers with an annual turnover or revenue of more than RM100 million from August 2024. Additional taxpayers will be in scope from 2025 with all taxpayers included by July 2025.

Is e-reporting mandatory in Malaysia?

There is a consolidated e-invoice requirement for transactions where e-invoicing is not mandatory, and the buyer does not request an e-invoice to be issued. Taxpayers must aggregate all invoices and receipts issued and issue a consolidated e-invoice via the MyInvois, on a monthly basis (within 7 days from the month end).

Should I use e-invoicing in Malaysia?

E-invoicing is currently optional for taxpayers in Malaysia but an upcoming mandate will make it a requirement for all taxpayers by 2025. The first group of taxpayers need to comply by August 2024.

What is the e-invoicing authority in Malaysia?

The Inland Revenue Board of Malaysia (IRBM) is the e-invoicing authority in Malaysia. The IRBM is responsible for the MyInvois Portal, the platform used to submit, clear and validate e-invoices in the country.

How will businesses use e-invoicing in Malaysia?

Taxpayers within scope of the e-invoicing mandate submit documents via the country’s MyInvois Portal for validating, before sharing with the buyer. The real-time e-invoicing process saves time and resources for businesses and facilitates cross-border and international trade.

Where else is e-invoicing available in Asia-Pacific?

Malaysia is one of many countries in Asia Pacific to adopt e-invoicing including , China, South Korea, Singapore, Japan and the Philippines.

Additional resources

Asia Pacific E-invoicing

Learn about e-invoicing initiatives in Asia Pacific including current and upcoming requirements

Learn more

Continuous Transaction Controls Software

Discover how continuous transaction control software can help businesses remain compliant with global tax requirements

Learn more

The First Global Solution For E-Invoicing Compliance

Learn how Sovos eInvoice is simplifying global e-invoicing compliance for businesses

Learn more

Norway has an indirect tax that applies to elements of coverage under a motor insurance policy. This blog details everything you need to know about it.

As with our dedicated Spain IPT overview, this blog will focus on the specifics in Norway. We also have a blog covering the taxation of motor insurance policies across Europe.

Which taxes are payable in relation to motor insurance policies in Norway?

In 2018, Norway replaced the collection of traffic insurance tax with a new fee known as the Traffic Insurance Fee (TRIF). This fee is collected by the insurance companies on behalf of the Norwegian State, together with the premium for third-party motor liability insurance coverage.

The annual insurance tax needed significant administration. As such, implementing a new tax scheme on mandatory automobile third-party liability insurance policies aimed to streamline and speed up tax and excise administration. With the new approach, insurance companies must invoice TRIF together with the premium amount sent to registered vehicle owners. The fee is clearly stated on the invoice in a distinct line aptly named “Traffic Insurance Fee”.

How is TRIF on motor insurance policies calculated in Norway?

In Norway, the TRIF is charged for all registered cars that weigh under 7,500 kg. The Norwegian Tax Office collects the so-called weight-year tax on heavier vehicles, in which the TRIF is not due.

Norway charges the fee for insurance contracts on compulsory third-party liability insurance regarding motor vehicles registered domestically. The fee also applies to the sum received by the Norwegian Motor Insurers’ Bureau for uninsured motor vehicles or when the new owner has not taken out insurance for the motor vehicle.

There is no insurance premium tax on insurance policies covering Class 3 policies.

As stated above, insurance companies collect TRIF at the same time as the premium, so the fee is distributed in accordance with the frequency of premium payment. This can be monthly, quarterly, semi-annually or annually.

TRIF is a daily fee based on the type and usage of the vehicle. Vehicles are classified into five classes, from a) to f).

• Group a) covers passenger cars, vans, camper vans, buses, combination cars, lorries, and tow trucks with a maximum total weight of 3,500 kg or higher
• Group b) covers diesel-powered automobiles out of group a) that do not have a factory-installed particulate filter
• Group c) comprises annual tests identifying markings for motor vehicles
• Group d) covers motorcycles
• Group e) covers other vehicles, including taxis, mopeds, tractors, vehicles that transport disabled people and vehicles that are over 30 years old
• Group f) covers electric-powered vehicles

The new rates take effect on 1 March each year. This means that if the policy is issued or renewed on or after this date, the new rates will apply. The rates for 2024 range from NOK 0.37 (approx. EUR 0.032) for group e) to NOK 9.11 (approx. EUR 0.80) for group b).

What vehicles are exempt from tax in Norway?

Exemptions from TRIF occur based on the car’s usage or the owner. For example, motor vehicles registered at the Nordic Investment Bank that are used for official bank operations are exempt from TRIF. Vehicles registered at NATO or NATO headquarters, forces or personnel, as defined by international agreements, are also excluded. The exemption also applies to stolen cars.

The Ministry has the authority to issue regulations for implementation, delimitation and exemption criteria.

It is also worth mentioning that if liability insurance is not compulsory to take out, for example, in the case of the Norwegian state, municipalities or local institutions, the person responsible for the motor vehicle will be considered “self-insured”. In these circumstances, TRIF is not due.

Read our IPT Guide to learn more about Insurance Premium Tax compliance.

Have questions about the taxation of motor insurance policies or IPT in Norway? Speak to our experts.

VAT Compliance in Poland: An Overview for Businesses

Poland VAT compliance can be a tall task for those yet to devise a future-proof strategy. Considering legislation changes frequently and the ongoing phased implementation of e-invoicing, it takes a lot of time, money and energy to meet your obligations.

This is your overview of all the tax compliance rules applicable in Poland, covering mandates and requirements such as VAT, SAF-T (JPK) and e-invoicing via KSeF. Add this page to your compliance toolbelt so you can understand and meet your obligations – both now and in the future.

Table of Contents

• VAT obligations in Poland
• Poland: Insurance Ombudsman Contribution
• Import VAT in Poland
• Invoicing requirements in Poland
• Registration for OSS in Poland
• Registration for IOSS in Poland
• Intrastat and EC Sales list in Poland
• FAQ VAT compliance in Poland
• Help for VAT compliance in Poland

VAT obligations in Poland

There are several tax obligations in Poland that taxpayers must be mindful of. These include:

Poland e-invoicing

Electronic invoicing is a subject of its own when discussing Poland’s tax rules. E-invoicing is currently in development in the country; however, due to the recent postponement announced on 19 January 2024, mandatory e-invoicing via KSeF for B2B and B2G sectors will not start from 1 July 2024.

Subsequently, the voluntary phase that started on 1 January 2022 is still applicable. Certain benefits for issuing invoices via KSeF still apply in this phase so taxpayers are encouraged to begin integrations.

Find out more about Poland e-invoicing.

Poland SAF-T

Poland was one of the first European countries to streamline tax compliance and reporting for businesses by using the Standard Audit File for Tax (SAF-T) in place of traditional VAT returns. Known as Jednolity Plik Kontrolny (JPK), Poland made monthly SAF-T submissions compulsory for all taxpayers in 2018.

Read our dedicated Poland SAF-T overview.

Requirements to register for VAT in Poland

If your business in Poland involves VAT-taxable activities, you must register for VAT purposes. VAT registrations must be submitted before the first sale of goods or services is made, providing a VAT exemption is not in place.

Taxpayers looking to register for VAT in Poland are required to submit a host of documents to the tax authority. The required documents and information include:

• VAT-R application form
• Certificate of Incorporation
• Tax identification number from your established country

Registering for VAT in Poland typically carries a process time of up to 30 days from the submission date.

If you need help, please contact us.

Poland: Insurance Ombudsman Contribution

While Poland does not have an Insurance Premium Tax (IPT) regime, it does have some parafiscal charges that are applicable to the insurance premium.

The Fire Brigade Tax (FBC) is applicable in special cases. There is also a so-called Financial Ombudsman Charge (FOC) to be settled online and paid to the Polish Financial Ombudsman Office on a yearly basis. This charge is applicable for all insurance companies operating under Freedom of Services (FOS) or Freedom of Establishment (FoE) in Poland as well as for Domestic Insurance Companies.

Previously, Insurer Ombudsman Charge (IOC) applied to all 18 classes of non-life insurance and life insurance policies. It was replaced by the Financial Ombudsman Charge (FOC) in January 2023.

Import VAT in Poland

The act of importation is a taxable event for which VAT is chargeable in Poland.

There is an option to use postponed accounting on imports. Poland introduced the option to defer import VAT as of 1 July 2020, enabling businesses to declare the tax through the VAT return without any cash payment. This mechanism is a great cash flow for the company as it doesn’t have to advance the VAT at Customs.

Taxable persons can use the mechanism, irrespective of whether the goods are subject to simplifications from the EU Customs Codes. To use the deferment mechanism, taxpayers must have a clear history of recent VAT compliance.

Invoicing requirements in Poland

Polish VAT invoices must be issued no later than the 15th day of the month after the taxable supply, and no earlier than 30 days before the supply of goods or completion of a service.

The electronic invoice will be considered issued on the day it is sent to KSeF, i.e. at the moment when it enters the system. When a structured invoice is assigned a KSeF number (unique ID), which contains the date of issue, it becomes legally valid. The issuance date is also in the Official Receipt Certificate (UPO).

To learn more about e-invoicing requirements in Poland, read our dedicated Poland e-invoicing overview.

Registration for OSS in Poland

One Stop Shop (OSS) has been effective in Poland since 1 July 2021, aiming to simplify VAT obligations for companies involved in distance selling.

Its main benefit is that a supplier can choose to account for the VAT due under OSS, which can be used for intra-EU cross-border supplies of goods and all cross-border supplies of services made to final consumers in the EU.

As a result, the company is required to register for VAT in only one EU Member State instead of registering for VAT in all EU Member States in which it operates – provided that the pan-EU threshold of EUR 10,000 in intra-EU distance sales to consumers is exceeded.

OSS can be used by businesses established in and outside the EU. If a supplier or a deemed supplier decides to register for OSS, it must declare and pay VAT for all supplies (goods as well as services) that fall under OSS.

Where the Member State of identification is Poland, the taxable person is entitled to file a notification to II Urzad Skarbowy Warszawa Srodmiescie by electronic means.

The forms for the EU OSS procedure are as follows:

• VIU-R – notification form
• VIU-DO – Form of the return for VAT settlements, filed for each quarter by the end of the month following a given quarter

The forms for non-EU OSS procedure are as follows:

• VIN-R – Notification form
• VIN-DO – Form of the return for VAT settlements, filed for each quarter by the end of the month following a given quarter

If you need help, please contact us or find more information on our dedicated guide.

Registration for IOSS in Poland

Import One Stop Shop (“IOSS”) is effective as of 1 July 2021 and applies to B2C distance sales of goods from outside the EU.

Under the standard procedure, VAT is due on all commercial goods imported into the EU Member State (the country of destination).

The purpose of IOSS is to facilitate the declaration and payment of VAT due on the sale of low-value goods of consignment valued at less than EUR 150. If the IOSS is used, the importation into the EU is exempt from VAT.

When using IOSS in Poland, a taxable person without a registered seat in the territory of the EU must indicate Poland as the Member State of identification. The taxable person in charge of the supply, or the intermediary, is entitled to file a notification with the II Urzad Skarbowy Warszawa Srodmiescie electronically.

The forms for the IOSS procedure are as follows:

• VII-R – Notification form of taxable person
• VII-RP – Notification form of intermediary
• VII-DO – Form of the return for VAT settlements, filed for each month by the end of the month following a given month

If you need help, please contact us or find more information on our IOSS overview.

Intrastat and EC Sales list in Poland

Intrastat is an obligation for certain businesses that trade internationally in the European Union, relating to the movement of goods across EU Member States.

While the requirements remain similar across the region, certain Member States have implemented rules differently and each has its own Intrastat threshold for reporting. Poland’s declaration threshold for 2024 is PLN 6.2 million for arrivals and PLN 2.8 million for dispatches.

Find out more with our Intrastat guide.

VAT compliance in Poland FAQ

How do VAT returns work in Poland?

The standard procedure for VAT returns in Poland includes monthly filing. Taxpayers deemed as ‘small’, however, can file VAT returns quarterly if they meet specific requirements. VAT returns can be submitted by the official portal or through approved software.

VAT returns need to be filed by the 25th of the month following the accounting period. This is of utmost importance as taxpayers can be financially penalised for failing to meet the deadline, as well as the potential to accrue statutory interest and potentially face legal proceedings.

Since October 2020, there has been a Uniform Control File (JPK_VAT) that is made up of a record section and a declaration section. This consolidates data that was included in VAT returns prior to the file’s introduction.

What is required on a VAT invoice in Poland?

There is a host of required information that must be included on invoices, including (but not limited to):

• Date of issuance
• Customer’s VAT ID number
• Full name and address of both the supplier and customer
• Description of quantity and type of goods supplied, or type and extent of services rendered
• Date of transaction (or payment)
• VAT rate applied and VAT amount payable

With the implementation of mandatory e-invoice, additional data points are required to comply with the invoice schema.

Unit price of goods or services

What is the VAT rate in Poland?

The standard VAT rate in Poland is 23%, though certain goods and supplies have reduced rates of 8% and 5% and some services are exempt from VAT altogether.

What is the VAT registration threshold in Poland?

The VAT registration threshold for companies established in Poland is PLN 200,000.

There is no threshold on the VAT registration for foreign companies not established in Poland; they are required to register for VAT prior to making their first VAT-relevant supply in the country.

When does VAT liability apply?

VAT applies to the supply of goods and rendering of services in Poland for consideration. VAT liability is money owed to the tax authority and is calculated by subtracting credits from the total amount of VAT a taxpayer has collected at the moment the VAT becomes chargeable.

The deadline for making the relevant VAT payment is the same as for submitting the VAT return part of the SAF-T, i.e., by the 25th day of the month following the month in which the tax point arises. VAT liabilities must be paid by bank transfer and in Polish zloty.

Do I need a fiscal representative in Poland?

The Polish Tax Authorities require businesses established outside of the EU and having a VAT registration in Poland to appoint a fiscal representative in Poland. The fiscal representative can be an individual or a company, such as Sovos. The fiscal representative is jointly and severally liable with the taxpayer for the tax liability, which the fiscal representative settles on behalf of and for the benefit of that taxpayer in Poland.

It is worth noting that, since 23 February 2021, taxpayers established in Norway or Great Britain have not been obliged to appoint a fiscal representative when operating in Poland. The companies established in both Norway and Great Britain can register directly for VAT purposes in Poland. This entails that the legal representative of the company can sign the registration form without any involvement from the Polish established Company or an individual acting in the capacity of a fiscal representative.

An EU business is not required to appoint a fiscal representative to register for VAT in Poland, but it may choose to do so.

What is the scope of taxation in Poland?

VAT applies to the following transactions in Poland:

• The supply of goods and services within Poland for consideration
• The export of goods outside of the EU
• The import of goods from non-EU Member States
• Receipt of reverse-charge services by a taxable person in Poland
• Intra-Community supply of goods
• Intra-Community acquisitions of goods from another EU Member State by a taxable person

The following activities are outside the scope of Polish VAT:

• Transactions that cannot be subject to legal agreements (illegal transactions)

• Sales of businesses (transfers of going concerns or part thereof)

Should you register for VAT in Poland?

The threshold for VAT registration for Polish-established businesses is PLN 200,000 (about EUR 46,000).

The VAT registration limit may apply either:

• Retrospectively: The value of supplies of goods or services exceeded PLN 200,000 in the preceding tax year
• Prospectively: At the start of business, the value of supplies of goods or services is expected to exceed PLN 200,000

Businesses operating in Poland may additionally opt to register for VAT regardless of reaching the threshold or if their operations comprise only VAT-exempt activities.

Non-established businesses – foreign businesses without a place of business in Poland – must register for VAT in Poland when making taxable supplies of goods or services in Poland. They are exempt from registration when they exclusively supply the following services:

• Services and goods where the Polish purchaser pays tax under the reverse charge mechanism
• Certain services that are subject to a zero rate (e.g., services supplied within Polish seaports, connected with international transport, services of air traffic control rendered for foreign providers of air transportation)

How Sovos can help with VAT compliance in Poland

The varied nature of tax obligations in Poland means compliance can be a resource-heavy task – especially when you consider the high probability of future updates and implementations. Choosing Sovos, a single vendor with global and local tax expertise, allows you to future-proof compliance.

Reclaim your time so you can focus on growing your business by speaking with our expert team today. Compliance is our concern.

Get in touch now

Liechtenstein is one of many countries with Insurance Premium Tax (IPT) requirements, specifically the Swiss Stamp Duty and Liechtenstein Insurance Levy.

This blog provides an overview of IPT in Liechtenstein to help insurance companies remain compliant.

What kind of taxes are applicable in Liechtenstein on insurance premium amounts?

In Liechtenstein, there are two types of taxes that apply to premium amounts received by insurance companies:

1. Swiss Stamp Duty (CHSD)
2. Liechtenstein Insurance Levy (LIL)

These taxes complement each other. LIL is only applicable if CHSD is not applicable.

Swiss Stamp Duty is applicable in Liechtenstein based on Customs Union Treaty of March 29, 1923, which regulates the federal rules of stamp duties. Liechtenstein levy on Insurance premium amounts only applies if the Swiss stamp legislation does not apply.

It is necessary to highlight that Liechtenstein is a member of the EEA. As a result, the Location of Risk provisions outlined in the Solvency II Directive apply to LIL.

Therefore, to determine whether a premium amount triggers LIL, the rules of the referred Directive should be applied. This is not the case for Swiss Stamp Duty.

Premium payments made by Liechtenstein resident policyholders and/or to insurance companies based in Liechtenstein are generally subject to Swiss Stamp Duty.

What are the tax rates in Liechtenstein?

Premiums on non-life insurance policies are taxable at the rate of 5% and life policies at a rate of 2.5%, unless one of the exemptions listed in the regulations apply. These rates and exemptions apply to both CHSD and LIL.

Examples  of exemptions include:

• Policies covering accident
• Transport of goods
• Unemployment insurance
• Hail insurance
• Livestock insurance risks
• Reinsurance policies

What is the basis of a CHSD and LIL calculation in Liechtenstein?

For the Liechtenstein Insurance Levy, the taxable basis is the premium payments based on an insurance relationship created by an insurance policy where the location of risk is deemed to be in Liechtenstein.

Whereas, for the Swiss Stamp Duty, the taxable basis is the premium payments for insurance:

1. based on a domestic portfolio of a domestic Liechtenstein insurer
2. that are paid by a domestic policyholder having an insurance contract with a foreign insurer

What are the CHSD and LIL filing and payment frequencies in Liechtenstein?

CHSD is filed on a quarterly and paid alongside the submission of the tax return. On the other hand, LIL is due biannually.

Each return is due within 30 days following the last day of the reporting period.

What are the penalties and interest for CHSD and LIL in Liechtenstein?

In case of late payment, a default interest should be paid on the amounts paid late. The interest rate is determined by the Swiss Federal Department of Finance.

What are the challenges for Insurance Premium Tax in Liechtenstein?

The main challenge is to determine which tax is due, CHSD or LIL. Secondly, it is challenging to determine whether the premium amount and the risk covered are exempt from taxation. The list of exemptions is long.

If LIL is due, these returns can only be filed by a fiscal representative based in Liechtenstein. It can be challenging to find one locally.

Want to learn more about Insurance Premium Tax?

Read more about IPT in general here: IPT Guide

Find your solution: Complete IPT Compliance for Insurers

Questions on location of risk? Download our Location of Risk Rules eBook

Want help for IPT in Liechtenstein?

Contact our team of experts today.

VAT Compliance in Romania: An Overview for Businesses

Romanian VAT Compliance can be described as a layered system conflated with different declarations and requirements, from SAF-T obligations to electronic invoicing. In this page, businesses aiming to remain compliant and looking to know the most up to date news, can find an overview of the main Romanian VAT rules. Scroll down to learn about Romanian VAT compliance requirements and how to remain compliant.

Table of Contents

• Romania: General VAT information
• VAT rules in Romania
  • Romania e-invoicing
  • Romania SAF-T
• Requirements to register for VAT in Romania
• When does VAT liability apply in Romania?
• Invoicing requirements in Romania
• Registration for OSS in Romania
• Intrastat, EC Sales list and local listing (Form 394) in Romania
• FAQ
• Help for VAT compliance in Romania
• Additional resources

Romania: General VAT information

Romania is a complex country for VAT rules, with many elements that companies need to be aware of. These include:

Periodic VAT return (Decont de taxa pe valoarea adaugata)	Monthly 25th day of the month following the end of the tax period
	Quarterly 25th day of the month following the end of the tax period
Romanian Domestic Supplies & Purchase listing (Declaraţie informativă privind livrările/prestările şi achiziţiile efectuate pe teritoriul national – D394)	Monthly 30th day of the month following the end of the tax period
SAF-T (Declarației informative D406)	Monthly/Quarterly
SAF-T Stocks (Declarației informative D406)	On-demand – a minimum 30-day deadline
SAF-T Assets (Declarației informative D406)	Deadline for the submission of Financial Statements for the year
EU Sales and Purchases List	Monthly 25th day of the month following the end of the tax period
Intrastat	Monthly 15th day of the month following the relevant month
VAT rates	19% 9% 5% 0% and Exempt
Intrastat thresholds	Arrivals: RON 1 million Dispatches: RON 1 million

VAT rules in Romania

Romania is at the forefront of VAT compliance, having implemented a broad range of requirements, from SAF-T obligations to e-invoicing. You can find more information on the various rules and requirements here:

Romania e-invoicing

A hybrid e-reporting and e-invoicing system, the Romanian CTC mandate has been introduced gradually since 2022 - with the broader requirements applicable from January 2024. The mandate is complex, requiring impacted taxpayers to be aware of the various applicable obligations.

Find out more about Romania e-invoicing

Romania SAF-T

SAF-T obligations have been a reality in Romania since 2022. Using the Declaratiei Informative D406, taxpayers report transaction and accounting data to the local tax authorities.

Learn more about Romania SAF-T

Requirements to register for VAT in Romania

Taxable persons established in Romania are required to register for VAT purposes if their annual turnover exceeds the threshold RON 300,000 (EUR 88,500). Established entities that don’t meet the threshold may opt to register for VAT purposes.

Non-established entities are required to register for VAT purposes, regardless of annual turnover, when practicing certain activities such as Intra-Community transactions or exports.

When does VAT liability apply in Romania?

In Romania, VAT liability encompasses various transaction types – including, but not limited to, the following:

• Supplies of goods and services for consideration with place of supply in Romania
• Imports of goods
• Intra-Community acquisitions of goods

Invoicing requirements in Romania

Legislation in Romania states that invoices, paper or electronic, must include the following information:

• Invoice unique serial number
• Invoice/delivery date
• Supplier identification
• Recipient identification (when they are taxable subjects as well)
• Description of the goods or services provided
• Taxable amount
• Applicable tax rate

Since January 2024, the Romanian B2B e-invoicing and e-reporting mandate has applied to established taxpayers and VAT registered entities – concerning all B2B transactions with place of supply in Romania.

From January 2024, VAT-registered entities must report their invoices (regarding domestic B2B transactions) to the RO e-Factura platform within five working days of issuance.

Established taxpayers are equally required to electronically report their invoices from January 2024.

The tax authority provided a three-month grace period where no penalties will apply, meaning that penalties will be imposed from April 2024.

From July 2024, the e-reporting obligation will shift to an e-invoicing requirement for transactions between established taxpayers. If established taxpayers fail to issue the invoice electronically, the invoice must be reported within five calendar days to the RO e-Factura platform.

In addition to the invoicing content requirements, which must also be included in electronic invoices, the e-invoice must comply with certain technical requirements as well.

You can find more information about Romania’s e-invoicing rules on our dedicated Romania e-invoicing page.

Registration for OSS in Romania

The EU established the One Stop Shop (OSS) in July 2021, implementing an EU-wide 10,000-euro threshold for VAT and simplifying cross-border online sales in the region simpler. This is part of the EU VAT e-commerce package.

Following the applicable Romanian VAT rules, the following fall within the scope of the OSS regime:

• Entities established in Romania
• Non-EU taxable persons with a fixed establishment in Romania
• Entities which have fixed establishments in more than one EU Member State including Romania)

These entities may choose Romania as their Member State of registration for OSS purposes.

Non-EU entities, which do not have a fixed establishment in the European Union, may also register in Romania for OSS purposes – only if carrying out distance sales of goods when the goods are dispatched from Romania or any other EU Member State.

In addition to the OSS registration, taxable persons may also apply to the Import One-Stop Shop (IOSS) in Romania which concerns B2C distance sales of goods from outside the region.

Intrastat, EU Sales and Purchases List and Domestic Supplies & Purchase listing (form 394) in Romania

Intrastat returns – which are related to the movement of goods in the European Union – are submitted in Romania if the taxable person exceeds the provided threshold.

Even though Intrastat requirements remain similar across the EU, each Member State may implement rules differently. Our Intrastat Guide is a useful tool for navigating cross-border trading in the EU.

In Romania, the Intrastat threshold for both arrivals and dispatches of goods is RON 1,000,000 (around EUR 201,000). The Intrastat return must be submitted by the 15^th day of the following month.

The EU Sales and Purchases List is submitted in Romania by taxable persons carrying out Intra-Community supplies or purchases of goods or certain services. The return must be submitted by the 25^th day of the following month and is not required to be submitted in tax periods where no transactions occurred.

The Domestic Supplies & Purchase listing (form 394), first implemented in July 2014, is an additional return to be submitted periodically by all VAT-registered entities in Romania. The return includes data on domestic supplies and purchases between VAT-registered entities and must be submitted by the 30^th day of the month following the end of the tax period.

FAQ VAT compliance in Romania

What is a VAT number in Romania?

In Romania, any entity subject to taxation (not just VAT) shall receive a tax identification number.

The number of digits in the VAT number may vary.

How do VAT returns work in Romania?

The Romanian periodic VAT return – Decont de taxa pe valoarea adaugata – is submitted on a monthly or quarterly basis, if the taxpayers’ annual turnover remains below the equivalent in RON of 100.000 EUR. The returns must be submitted electronically by the 25^th day of the month following the end of the applicable tax period.

The VAT return must include the amount of the deductible VAT as well as the VAT charged in the tax period.

What is the VAT registration threshold in Romania?

Taxable persons established in Romania are required to register for VAT purposes if the RON 300.000 (EUR 88.500) annual turnover threshold is exceeded. There is no threshold for non-established entities.

What is the VAT Act in Romania?

The Romanian VAT Act is part of the Fiscal Code (Codul Fiscal) of 8 September 2015, adopted by Law no. 227/2015.

What are the VAT rates in Romania?

The applicable VAT rates in Romania are 19%, 9%, 5% and 0%.

As a rule, the standard rate of 19% applies to all supplies of goods and services.

The reduced rates of 9% and 5% are only applicable to certain specifically identified goods and services. The 9% rate applies to:

• Medicines for human and veterinary use
• Food supplies
• Hotel accommodation
• Restaurant and catering

The reduced rate of 5% is applicable to:

• Books, newspapers, magazines and school manuals
• Access to museums, castles, cinemas, zoological and botanical gardens
• Passenger transport

Exceptionally, certain transactions are taxable at a 0% rate, namely:

• Exports of goods
• Intra-community supplies of goods

What is the reduced VAT rate in Romania?

Romania’s VAT rules provide reduced VAT rates of 9% and 5%, depending on the goods and services in question.

Do I need a fiscal representative in Romania?

Taxable persons not established in the EU that fall under the obligation to register for VAT purposes in Romania are obliged to appoint a fiscal representative.

Does Romania use an e-transport system?

Yes. Since January 2023, Romania‘s mandatory e-transport system has monitored the transport of certain goods in the national territory. The e-transport system operates in parallel with Romania’s e-invoicing system. For more information read our in-depth blog about the e-transport system in Romania.

Help for VAT compliance in Romania

Looking back at this overview, it becomes clear just how fast-paced Romania’s developing VAT compliance requirements are. Sovos helps customers navigate difficult VAT compliance landscapes worldwide, by leveraging our global coverage.

We take care of compliance so you can concentrate on growing your business.

Contact our expert team today

Additional resources

SAF-T eBook

A deep-dive on OECD’s international accounting standard

Download now

VAT digitization in Eastern Europe eBook

A comprehensive overview of VAT digitization trends in Eastern Europe

Download now

Guide to EU VAT compliance

Your guide to making VAT Compliance simple

Download now

E-invoicing guide

What you need to know about e-invoicing.

Read now

Dominican Republic e-invoicing

The Dominican Republic is just one of the many nations that are turning to e-invoicing. From 2024, established taxpayers will be required to meet strict new rules for how they execute business transactions.

Understanding what’s to come is vital, as is choosing a partner with the technical know-how and foresight to ensure compliance during change. Bookmark this page to stay updated with developments in e-invoicing in the Dominican Republic, written by regulatory experts.

Table of contents

1. At a glance: e-invoicing in the Dominican Republic

2. E-invoicing regulations in Dominican Republic

3. Timeline: e-invoicing adoption in the Dominican Republic

4. Who must use an e-invoice in the Dominican Republic?

5. How to choose the right e-invoicing software in the Dominican Republic

6. FAQ

At a glance: e-invoicing in the Dominican Republic

Dominican Republic B2G e-invoicing

CTC Type
E-invoice clearance according to the calendar, starting with the first group in May 2024

Network
The system’s web services are a set of protocols and standards that, using extensible markup language (XML) and REST API, allow the exchange of data between the heterogeneous invoicing software of taxpayers and the tax authority through an environment defined as {Environment}, finding various services in electronic invoicing

Format
Electronic invoices will be sent in an XML file, which consists of a plain text record that uses a series of custom tags to describe both the structure and other characteristics of the document

eSignature Requirement
A digital certificate for Tax Procedure, issued and signed digitally, by a certification entity authorised by INDOTEL or a certificate with an institutional link is required

Archiving Requirement
10 years

Dominican Republic B2B e-invoicing

CTC Type
E-invoice clearance according to the calendar, starting with the first group in January 2024

Network
The system’s web services are a set of protocols and standards that, using XML and REST API, allow the exchange of data between the heterogeneous invoicing software of taxpayers and the tax authority through an environment defined as {Environment}, finding various services in electronic invoicing

Format
Electronic invoices will be sent in an XML file, which consists of a plain text record that uses a series of custom tags to describe both the structure and other characteristics of the document)

eSignature Requirement
A digital certificate for Tax Procedure, issued and signed digitally, by a certification entity authorised by INDOTEL or a certificate with an institutional link is required

Archiving Requirement
10 years

E-invoicing regulation in the Dominican Republic

The electronic invoicing regulation in the Dominican Republic was published on 17 May 2023 and lays out the specific expectations and requirements for taxpayers.

Firstly, the e-invoicing regulation applies to natural and legal persons, both public and private. It also applies to entities without legal personality domiciled in the Dominican Republic that carry out the transfer of goods, delivery in use or provision and lease of services for consideration or free of charge.

All issuers of electronic invoices are to be recognised and authorised as such by the DGII and have a digital certificate for Tax Procedure issued by an entity authorised by the Dominican Institute of Telecommunications (INDOTEL).

Electronic invoices must be compliant with a set format and are to be sent to the authority and electronic receiver. Each e-invoice will have a Printed Representation (RI) of the electronic tax receipts (e-CF) which will be delivered physically to exceptional non-electronic receivers.

The regulation outlines three forms of acceptable e-CF issuance:

• Using self-developed systems, following authorisation from the DGII
• Using e-invoicing service providers that have been certified for compliance
• Using the DGII’s free technological facility (known as free billing)

Find more details on the e-invoicing regulation in the Dominican Republic.

Timeline: e-invoicing adoption in the Dominican Republic

It can be difficult to stay informed about the changes to e-invoicing’s implementation in the Dominican Republic. This simple timeline details the key developments:

• February 2019: Pilot phase for e-invoicing commences with 11 large companies
• September 2022: Draft law filed for the Senate’s approval
• 17 May 2023: The Electronic Invoicing Law of the Dominican Republic was published in the Official Gazette
• 18 May 2023: The e-invoicing mandate became applicable across the nation
• 15 January 2024: Group 1 of large national taxpayers need to have implemented e-CF by now
• 15 March 2024: Group 2 of large national taxpayers need to have implemented e-CF by now
• 15 May 2024: Group 3 of large national taxpayers and Government Institutions classified as Large National Taxpayers need to have implemented e-CF by now
• 15 May 2025: E-invoicing will become a requirement for large local and medium-sized taxpayers
• 15 May 2026: E-invoicing will become a requirement for small, micro, unclassified taxpayers and the remaining Government Institutions

Who must use an e-invoice in the Dominican Republic?

Both issuing and receiving electronic invoices are currently voluntary for both B2B and B2G transactions in the Dominican Republic. This will change in 2024 when the first wave of mandatory requirements rolls out, specifically to large taxpayers.

View the timeline below to find out exactly when e-invoicing will be obligatory for different taxpayer groups.

How to choose the right e-invoicing software in the Dominican Republic

The impending launch of electronic invoicing in the Dominican Republic brings along the need to find a system and strategy that works. Strategy isn’t one-size-fits-all; compliance is imperative and, subsequently, so is finding a solution that understands your company.

Sovos is a global compliance partner for organisations of all shapes and sizes, and our solutions not only help you to comply but also free up resources so you can focus on what really matters.

Another aspect of compliance to be mindful of is that requirements change. It’s unavoidable. Instead of jumping between solutions, organisations that partner with Sovos have peace of mind that they will be compliant in the present and meet any new demands that come in the future.

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FAQ

What is an e-CF?

e-CF, otherwise known as an electronic tax receipt, is the Dominican Republic’s version of an electronic invoice. Taxpayers must submit e-CFs to the nation’s tax authority, DGII, for approval.

How do I request an interval number so I can identify my electronic invoices?

Once you have issued an electronic invoice, request an e-CF sequence and the DGII will validate the file. Once the tax authority has validated the e-CF, you will receive authorised versions.

What are the different e-CF statuses on the Internal Revenue Service website?

The different statuses for e-CF are as follows:

• Accepted e-CF – The document has been received and is valid
• Rejected e-CF – The document has been received but is not valid
• e-CF not found – The sequence is valid but has not been submitted to the Internal Revenue Service
• In process – The document is being validated by the DGII

How do Acknowledgment of Receipts and Commercial Approvals differ?

Regarding e-invoicing in the Dominican Republic, the Acknowledgement of Receipt only confirms that the electronic invoice has been received. The Commercial Approval indicates whether the e-CF has been accepted or rejected.

In less than six months, Poland is going to introduce its long-awaited CTC clearance e-invoicing mandate – a tax reform that will impact a large amount of businesses.

It has been possible to issue and receive e-invoices voluntarily via Krajowy System E-Faktur (KSeF) since January 2022, but from 1 July 2024 it will become mandatory for suppliers and buyers that are in scope of mandatory e-invoicing to do this via KSeF.

A detailed understanding of the new regime, plus timely and proper preparation, is critical for compliance. Whilst there is a six-month grace period on financial penalties, non-compliance can negatively impact your business in many other, often unexpected, ways.

In this 45-minute deep-dive webinar, Marta Sowińska from our Regulatory Analysis and Design team will cover:

• Introduction to the mandatory e-invoicing reform in Poland
• Scope of the clearance mandate: domestic vs. cross-border transactions 
• Key challenges:
  • B2B vs. B2C transactions
  • Latest updates on QR codes
  • Emergency models – also known as offline modes
• Key dates and implications of non-compliance

Join us on 8 February at 2pm GMT | 3pm CET for a thorough review of the Polish KSeF e-invoicing mandate and the opportunity to submit your questions.

Register today

As tax authorities continue to digitize processes in their mission to reduce fraud and close their VAT gaps, they are introducing requirements that provide greater visibility into a company’s financial operations in the form of Continuous Transaction Controls (CTC).

It would be a mistake to think that being prepared to meet obligations in one of the countries where you operate can simply be replicated in another – CTCs are far from a ‘one-size-fits-all’ solution.

Join us on 24 January 2024 in our latest quarterly VAT Snapshot webinar series where regulatory experts Dilara Inal and Marta Sowinska will examine how tax authorities in Poland, Romania, Israel, Greece and Spain – all simultaneously implementing CTC regimes – are doing so with different sets of requirements.

Don’t miss this opportunity to learn more about these unique regimes and what they mean for your business.

Register now.

Monaco is one of many countries with Insurance Premium Tax (IPT) requirements, specifically the Special Annual Tax and Fire Brigade Tax. This blog provides an overview of IPT in Monaco to help insurance companies remain compliant.

What kind of taxes are applicable in Monaco on insurance premium amounts?

In Monaco, there are two types of taxes that apply to premium amounts received by insurance companies. These taxes apply to domestic as well as foreign insurance companies who write business in Monaco, whether or not they have a branch office there.

It is necessary to highlight that Monaco is not a member of the EU/EEA. As a result, the Location of Risk provisions outlined in Directive 2009/138/EC, often referenced as the Solvency II Directive, do not apply. Therefore, determining whether a premium amount triggers Monegasque insurance premium tax or not requires understanding the local territorial rules.

The Monegasque insurance premium taxes are:

• Special Annual Tax (SAT)
• Fire Brigade Tax (FBT)

What are the tax rates in Monaco?

SAT rates vary based on the risks covered. The lowest rate is 0.20% for policies covering export credit risks, while the highest rate is 25% for policies covering property risks with a fire element. Most taxable insurance is subject to a 7% rate.

There are various exemptions from SAT, such as life insurance and related contracts, reinsurance, and risks located outside of Monaco.

There is a fixed rate of 9% for Fire Brigade Tax.

What is the basis of SAT and FBT calculation in Monaco?

The taxable premium is the taxable basis for both SAT and FBT. It is defined as the sum stipulated for the benefit of the insurer, including any extra fees or charges paid directly or indirectly by the insurer. The taxable basis for FBT can be different from SAT.

What are the SAT and FBT filing and payment frequencies in Monaco?

SAT and FBT are filed quarterly on one return. The payment must be made alongside the filing. The settlement deadline is the tenth day of the third month after the reporting period ends.

In addition to the quarterly return obligation, insurance businesses must file an annual return by 31 May of the year after the reporting year.

What are the penalties and interest for SAT and FBT in Monaco?

Penalties are imposed for payment delays, as well as inaccuracy, omission, inadequacy, or any other violations that may cause damage to the Monegasque treasury.

The late payment interest rate is 6%, and is charged on the entire month, regardless of when in the month the late payment becomes due. For every other error, the default penalty is EUR 150 or EUR 1,500. The latter applies if the violated legal provision is punishable.

What are the challenges for Insurance Premium Tax in Monaco?

The fiscal representation regulations are the most difficult aspect of Monegasque insurance premium taxation. A foreign insurance business must have a representative authorised by the Minister of State to declare taxes in Monaco.

This representative should be a private individual and is fully liable for the payment of any Monegasque duties and fines. In addition, a certain amount of guarantee is payable if the representative is not based in Monaco.

Want to learn more about Insurance Premium Tax?

• Read our Insurance Premium Tax guide
• Navigate Location of Risk rules with our ebook
• Understand IPT compliance with our ebook, written by our regulatory experts

Want help with IPT in Monaco?

Speak to our IPT experts

Poland SAF-T framework

Poland is one of many countries to use the Standard Audit File for Tax (SAF-T) to streamline tax compliance and reporting for businesses. The country was one of the first in Europe to replace the traditional VAT return with SAF-T.

Poland introduced its version of SAF-T, known as Jednolity Plik Kontrolny (JPK), in 2016, making monthly submissions of JPK_VAT compulsory for all taxpayers in 2018.

In 2020, JPK_VAT combined with the VAT return and is submitted with a declaration per the frequency of the VAT Return (monthly or quarterly).

Submission of the remaining seven JPK structures is upon request of the tax authority in the event of an audit.

Please note: JPK_VAT with the declaration is in the process of changing as a result of the introduction of mandatory e-invoicing via KSeF in Poland.

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Table of contents

1. The legal framework of SAF-T in Poland

2. Timeline SAF-T in Poland

3. Understanding JPK VAT and SAF-T in Poland

4. Implementing SAF-T as a business

5. Other requirements for VAT compliance in Poland

6. FAQ

7. How Sovos can help

8. Related resources

The legal framework of SAF-T in Poland

The Poland SAF-T framework consists of eight JPK structures:

JPK_V7M/K

declaration for records of VAT purchases and sales combined

JPK_FA

for VAT and VAT invoices

JPK_WB

for bank statements

JPK_PKPIR

for revenue and expense ledger

JPK_EWP

for revenue account

JPK_KR

for accounting books

JPK_MAG

for warehouses

JPK_FA_RR

for flat rate VAT invoices

Other than the monthly or quarterly periodic submission of JPK_V7M/K, submission of all other JPK structures is on demand.

However, from 1 January 2025, reporting of JPK EWP, JPW PKPIR, and JPK_KR will become a periodic reporting obligation.

Timeline SAF-T in Poland

• 1 July 2016: SAF-T introduced in Poland in the form of JPK files
• 1 January 2018: Poland mandated JPK_VAT for all taxable persons
• 1 July 2018: Taxpayers must be able to produce accounting documents in JPK structures
• 1 October 2020:  JPK_VAT with declaration consolidates the VAT Return and JPK_V7M/K
• 1 July 2021: Amendments to the mandatory JPK_V7M/K adopted
• 1 January 2022: Amendments to the JPK_V7M/K structure including changes to better align it with the EU VAT e-Commerce package
• 1 January 2025: Reporting of JPK EWP, JPW PKPIR, and JPK_KR becomes a periodic obligation

Understanding JPK VAT and SAF-T in Poland

One of the eight JPK structures in Poland is JPK_VAT, a declaration combining VAT purchase and sales records. As of 2020, JPK_VAT must be sent alongside VAT returns to the tax authority.

JPK_VAT with the declaration has two variants, depending on the submission frequency of the VAT return:

• JPK_V7M for taxpayers settling VAT monthly.
• JPK_V7K for taxpayers who settle VAT quarterly.

Submission of JPK_V7M and JPK_V7K is on the 25^th of the month following the reporting period.

The other SAF-T JPK structures for VAT are JPK_FA for VAT invoices and JPK_FA_RR for flat-rate VAT invoices. JPK_FA and JPK_FA_RR are both submitted on demand.

Implementing SAF-T as a business

SAF-T requires additional data to analyse and authenticate the accuracy of documentation. All data submitted in the SAF-T consolidated submission must be accurate and complete to ensure compliance.

Data for SAF-T requirements is often extracted from multiple sources for a single report and combining this data can be difficult.

The data required for SAF-T differs significantly from other reporting obligations that businesses might be familiar with. The XML format required for reports makes it difficult to review, compare or test reports ahead of submissions.

Sovos SAF-T Solutions

Sovos’ SAF-T software solutions help businesses manage their SAF-T requirements across multiple jurisdictions, including Poland.

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Sovos SAF-T Extraction

Sovos SAF-T Extraction automates processes to seamlessly extract required data.

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Sovos SAF-T Generation

Sovos SAF-T Generate maps data accurately to SAF-T structures in the latest legal formats for timely SAF-T reporting.

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Sovos SAF-T Analysis

Sovos SAF-T Analysis performs deep analysis on SAF-T output generated. Sovos’ managed services is available for non-EU businesses selling in Poland requiring fiscal representation.

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Other requirements for VAT compliance in Poland

As well as Poland’s SAF-T requirements, taxpayers need to also be aware of the KSeF e-invoicing mandate. Poland’s continuous transaction control (CTC) e-invoicing system is mandatory as of 1 July 2024, expanding to VAT-exempt taxpayers in 2025. Read this overview for a general introduction to Poland VAT compliance.

FAQ

What is JPK_VAT?

JPK_VAT with a declaration is an electronic document that includes both VAT records, combining information on purchases and sales and VAT returns (VAT-7M and VAT-7K).

When to submit JPK_VAT in Poland?

JPK_VAT is submitted on a monthly or quarterly basis.

Is SAF-T mandatory in Poland?

Yes, SAF-T is mandatory in Poland. JPK VAT with a declaration must be sent to the tax authority on a periodic basis, while other types of JPKs are sent on demand.

What are the penalties for non-compliance with SAF-T in Poland?

Failure to comply with the SAF-T requirements in Poland can lead to penal and fiscal sanctions, based on a misdemeanor or a felony. If the value of the reduction of the tax liability exceeds PLN 10,000, it is a crime.

What are the submission deadlines for SAF-T in Poland?

Submission of JPK_VAT with the declaration (JPK_V7M and JPK_V7K) is on the 25th day of the month following the reporting period. Other JPKs are submitted to tax authorities within three days after receiving a request from the tax authority.

Our Solution capabilities for Poland SAF-T

Data Extraction

Painlessly aggregate and consolidate data from a wide range of source systems complying with Poland’s SAF-T requirements including JPK files.

More about data extraction

Data Analytics

Check the accuracy, integrity and quality of complex data structures required by Poland SAF-T to give you peace of mind before you submit your JPK files to the tax authority.

More about data analytics

File Generation

Ensure that all required data sets from accounting entries, sales and purchase transactions, asset depreciation, stock movements and more, are mapped seamlessly into Poland’s JPK schema, ready to be analyzed and submitted to the tax authority.

More about file generation

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Related resources

VAT Digitization in Eastern Europe

Free ebook including country cards for VAT compliance

Learn more

Poland: E-Invoicing

An overview for e-invoicing obligations in Poland

Learn more

SAF-T International Standards

Your ebook for all things SAF-T

Read now

Romania e-invoicing

E-invoicing in Romania is developing fast. With a current B2G and High Fiscal Risk B2B mandate already in place and a new obligation facing all companies with operations in Romania from 1 Jan. 2024, it can be hard to stay on top of your business’ requirements. Failing to comply with Romania’s e-invoicing and e-reporting mandates will result in penalties, but more importantly, it will lead to invalid tax invoices – which don’t allow for VAT deduction – and, ultimately, may also trigger protracted tax audits, so it is crucial that you are aware of your requirements.

Read on to learn about the current state of Romania e-invoicing – from continuous transaction controls (CTC) and e-Factura to B2B e-invoicing developments – and what’s to come.

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Table of contents

1. At a glance: Romania e-invoicing
2. E-invoicing regulations in Romania
3. Benefits of e-invoicing
4. How to choose the right e-invoicing software in Romania
5. Future of e-invoicing in Romania
6. Additional obligations for VAT compliance in Romania
7. FAQ
8. Setting up e-invoicing and e-reporting in Romania with Sovos
9. Additional resources

At a glance: Romania e-invoicing

Romania B2G e-invoicing

CTC Type
E-invoice clearance coupled with e-reporting requirements for transactions carried out between January and July 2024 with public institutions

Network
Centralised network where the e-invoice exchange is primarily processed through the RO e-Factura platform

Format
UBL 2.1 XML format file following CIUS RO national validation rules

eSignature Requirement
Digital Seal applied by the Ministry of Finance

Romania B2B e-invoicing

CTC Type
E-invoice clearance coupled with e-reporting requirements for transactions carried out by VAT-registered entities

Network
Centralised network where e-invoice exchange is primarily processed through the RO e-Factura platform

Format
UBL 2.1 XML format file following CIUS RO national validation rules

eSignature Requirement
Digital Seal applied by the Ministry Of Finance

Archiving Requirement
10 years

E-invoicing and e-reporting regulations in Romania

Romania introduced e-invoicing on a voluntary basis in November 2021 for B2G and April 2022 for B2B transactions. Romania’s Government Emergency Order no. 120/2021 implemented the RO E-Factura platform, the country’s e-invoicing system.

From July 2022, e-invoicing became mandatory for B2G and B2B transactions of so-called ‘high fiscal risk products’ following article II of Law no. 139/2022.

Romania applied for a derogation from the EU VAT Directive, aiming to implement a broader B2G and B2B e-invoicing and e-reporting mandate. The EU Council granted derogation in July 2023, allowing Romania to implement mandatory e-invoicing from 2024. The enacting of Law no. 296/2023 provides a new B2G and B2B e-invoicing mandate coupled with e-reporting requirements.

What is RO e-Factura?

RO e-Factura was officially launched in November 2021 as a voluntary clearance program for e-invoices, devised in an effort to streamline Romania’s tax collection. Users of e-Factura issue and submit their electronic invoices in a structured XML format through the system. Invoices are then cleared (following certain schema checks) and a digital seal is applied.

The RO E-Factura platform enables the automatic exchange of electronically issued invoices between entities registered in the system.

Romania B2B e-invoicing and e-reporting

B2B e-invoicing is already in play for transactions that include products deemed a high tax risk, including:

• Fruit and vegetables
• Alcoholic beverages
• Mineral products
• Construction materials
• Clothing and footwear

Following the recently published mandate, B2B e-invoicing requirements will extend to all products. From January 2024, established and VAT-registered entities are required to report B2B domestic transaction invoices to the RO E-Factura platform within five days of issuance. From July 2024, invoices issued in transactions between established entities must be issued electronically through the RO E-Factura platform.

If, however, taxpayers fail to issue the invoice electronically through the RO E-factura platform, they are obligated to submit it to the RO e-Factura platform within five calendar days.

Romania B2G e-invoicing

From 1 July 2022, Romanian taxpayers were obliged to issue e-invoices, submitting them through the RO e-Factura system, when conducting business with the public sector. This obligation was namely within the context of certain public procurement contracts.

Romania’s e-invoicing mandate has expanded the scope of B2G invoicing in Romania which will apply to all transactions with public institutions from 2024.

Romania e-Transport system

Romania’s e-Transport system, often referred to as RO e-Transport, is used to monitor products when they are being transported. Coupled with the implementation of the CTC mandate, this is another reform that the nation has devised as part of its plan to combat tax fraud and evasion.

The application procedure of the RO e-Transport system has been approved by the joint Order of the National Agency for Fiscal Administration (ANAF) and the Romanian Customs Authority (AVR) no. 1190/4625/2022, with penalties applicable from October 2022.

The RO e-Transport system requires taxpayers to declare the movement of goods from one location to another, in advance of said movement. Once declared, it issues a number on the transport documents which is to be verified by authorities en route.

Read more about the e-transport system.

Timeline: e-invoicing & e-reporting adoption in Romania

The implementation of e-invoicing in Romania has been done in stages. This is a brief timeline of its adoption:

• March 2020: E-invoicing system e-Factura is launched as a pilot program.
• October 2020: Government Emergency Ordinance (GEO) no. 120/2021 introduced the legal framework for the implementation of e-Factura.
• November 2021: Start of the voluntary phase for issuance of e-invoices for B2G transactions.
• April 2022: Invoices for B2B transactions of high fiscal risk transactions can be voluntarily submitted in e-Factura.
• July 2022: It is now mandatory to issue invoices for B2B transactions of high fiscal risk products through the RO e-Factura platform.
• January 2024: For B2B transactions, established taxable persons and VAT registered entities must report invoices in the e-Factura system within five days of issuance.
• April 2024: End of three-month grace period for e-invoicing mandate. Penalties will apply to non-compliant taxpayers.
• July 2024: The system will shift to an invoice clearance system for B2B transactions between established taxpayers.

Benefits of e-invoicing

From a business perspective, e-invoicing offers several benefits when compared to traditional invoicing. Benefits may include:

• Saving costs by reducing paper, postage and manual labour
• Saving time by using structured, automated electronic systems and processes
• Increased compatibility and interoperability across businesses with initiatives like PEPPOL
• Enhanced security can be achieved with the validation and authentication of systems like e-Factura

How to choose the right e-invoicing software in Romania

Considering the ever-evolving nature of regulations and mandates surrounding newer technologies and platforms like RO e-Factura, it is important that your business identifies and utilises the right software. The cost of using e-invoicing software that does not update with changes to regulations is not desirable for any organisation.

Setting up e-invoicing and e-reporting in Romania with Sovos

Get in touch with a Sovos expert to explore setting up e-invoicing and e-reporting in Romania.

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Future of e-invoicing in Romania

The future of e-invoicing in Romania has already arrived. Following the EU Council’s derogatory decision to allow Romania to implement mandatory e-invoicing, Romania published a more comprehensive B2B mandate with a 2024 roll-out date. The new law requires businesses to issue structured electronic invoices for transactions to both business and public sector entities, and it applies to established and VAT-registered entities.

The looming implementation of VAT in the Digital Age in the EU may deliver more changes in Romania, however. Aiming to digitise the European VAT system, this proposal is generating a lot of uncertainty for businesses that conduct operations in the EU as it includes requirements for digital reporting and e-invoicing – as well as changes to VAT registration

While the future of tax in the European Union may be uncertain, you can rely on Sovos to help you navigate the digital landscape. Bookmark this page to stay up to date with the latest developments.

Additional obligations for VAT compliance in Romania

While it’s important to ensure your business complies with Romania’s e-invoicing requirements should it qualify, there are other obligations that require attention – including general VAT Compliance and the Romanian SAF-T mandate.

The cost of non-compliance may be severe, but our materials and experts can be the helping hand you need to ensure you are meeting your obligations.

FAQ

Is e-invoicing mandatory in Romania?

E-invoicing will be mandatory for all B2B transactions in Romania from 1 July 2024, adding to the existing electronic invoicing requirements for B2G and high fiscal risk B2B transactions.

What is the invoice e-reporting obligation in Romania?

Between January and June 2024, established entities are required to report their B2B invoices to the RO e-Factura platform within five days of issuance. This reporting obligation applies to VAT-registered entities from January 2024 onwards.

What do I need for a Romanian invoice?

There are numerous requirements for invoices in Romania, including:

• Date of issuance
• VAT number of both supplier and customer
• Full name and address of both supplier and customer
• Full description of applicable goods or services, including quantities
• The net supply value
• The gross invoice value
• The applicable VAT rate

How does the RO e-Factura platform work?

The Romanian e-Factura is a clearance system which sees e-invoices sent, cleared and received through the central platform.

What are the penalties for non-compliance?

Should a taxpayer in scope of the e-invoicing and e-reporting mandate not comply with its e-invoicing obligations, they may receive a fine. From April 2024 (at which time the 3-month grace period ends) 2024, large non-compliant taxpayers may be fined between 5,000-10,000 RON, and others may expect a financial penalty between 500-2,500 RON, when failing to meet the e-reporting requirements set forth. From July 2024, non-compliance with the with the issuance and receipt of e-invoices will result in a fine equal to 15% of the total invoice amount.

E-invoice and e-report in Romania with Sovos

Sovos’ continuous transaction controls (CTC) software was purpose-built to help customers stay on top of their obligations, wherever they do business, even as the rules change.

As CTCs and e-invoicing continue to grow in global adoption, it is vital to partner with a provider that closely monitors the decisions of tax administrations and understands the regulations you face. Sovos can help.

One of the largest spirits companies in the world, Brown-Forman turned to Sovos for help with several challenges it was facing surrounding changing e-invoicing regulations. The company needed a solution that would monitor and implement the fiscal requirements of the countries it operated in.

With Sovos e-invoicing compliance in place, Brown-Forman was able to redeploy its resources to core business functions knowing that its e-invoicing requirements were being met – both in the present and the future.

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Additional resources for e-invoicing compliance

E-invoicing: A Guide

Use this guide about e-invoicing in Europe to learn more about e-invoicing compliance in general.

Read now

VAT Digitization in Eastern Europe

Download this ebook for e-invoicing and real time reporting in Eastern Europe.

Learn more

E-invoicing Strategy with SAP

Learn how to solve the e-invoicing dilemma.

Learn more

The convergence of traditional Value Added Tax (VAT) and transactional compliance regimes is creating new obligations and responsibilities for companies doing business around the world. When it comes to VAT, compliance is so much more than just reporting.

Here are six pitfalls you should avoid in the pursuit of VAT compliance:

1. Making the wrong VAT decision at the outset

Companies with multijurisdictional supply chains must ensure their VAT determination decisions are accurate every time. Managing the validation process with VAT Determination software that checks validity before invoices are cut can save time and improve data accuracy from the outset.

It’s also best practice to complete your buyer VAT ID checks at this point in the process to avoid nasty surprises later. Checking manually can be incredibly resource-intensive so using a solution that can automate this for you can save both time and hassle.

2. Not having a legally valid invoice

To be considered legal for VAT purposes, invoices need to meet a specific set of requirements which vary by jurisdiction. Without legally valid invoices, you may be presented with a host of problems when the time comes to reclaim input VAT. If you have accepted an invoice that doesn’t tick the boxes that make it legal for VAT purposes, you invite the scrutiny of the tax authorities.

Aside from possible fines, the delay while anomalies are reviewed can impact your cash flow and cause reputational damage. Even in a paper world, VAT deduction is not permitted for improperly formatted invoices.

3. Missing reporting deadlines

With VAT obligations always growing and adapting, the pressure on internal tax teams is greater than ever. Each government has its own approach to penalties for late submissions or overdue payments. Manual processes can no longer be relied upon to meet the demands of the authorities on time, and with accuracy.

It’s possible to streamline the reporting process using software, outsourced services or a hybrid approach; what’s best for your business depends on how your tax team is organised.

4. Manual error

With new requirements coming thick and fast, teams are working harder and faster. As a result, opportunities for manual error are at an all-time high.

Manually processing VAT invoices can be incredibly time-consuming and leaves room for oversight and human error. Even individual errors can lead to bigger problems down the line, attracting the attention of the authorities and impacting your ability to do business.

5. Challenges with data extraction and mapping

Extracting the right data from the appropriate system modules, and then processing and mapping it so that it can be summarised, is a complicated and detailed task. To complicate matters further, each jurisdiction has its own unique reporting requirements you must meet. Automating these processes can improve accuracy and your ability to comply.

6. Not reviewing data prior to submission

Preparing VAT Returns, EC (European Commission) Sales Lists, Intrastat Declarations and other country-specific reports for regular submission can be demanding. Add in the need to prepare a SAF-T (Standard Audit File for Tax) report and the complexity intensifies. SAF-T requirements differ by country, including transactional data (about sales and purchases) and accounting data at a minimum, but often need information about assets and inventory as well.

Combining detailed data from different source systems with an exacting submission format means the report cannot be easily eyeballed to check for possible errors. Tax Authorities use software to analyse the SAF-T filings   they receive and decide where to follow up with further auditing. To safeguard the quality of the submission and avoid a call from the tax authority, it’s essential that data is thoroughly analysed before it’s submitted – ideally using tools of the same calibre that each Tax Authority is using.

It’s never been more important to seek the right advice for VAT. Admitting you need help can be a daunting but crucial step, but the fear of non-compliance should be a bigger concern.

Simply put, there comes a time for every multinational organisation when managing complex tax obligations in-house just isn’t viable anymore. Consolidating your compliance with Sovos gives you access to industry-leading software, consulting services and regulatory experts, all of which are focused on ensuring you’re compliant now and will remain so in the future.

To find out more, get in touch today.

Romania SAF-T declaration

Since 2022, medium and large taxpayers in Romania have had to report their VAT electronically to the tax authority under the international standard known as SAF-T (Standard Audit File for Tax).

Romania implemented SAF-T to improve the data it receives in VAT returns, requiring more granular detail that is reported in real time. As well as benefiting the Romanian tax authority, the electronic submission of the D406 streamlines tax compliance and reporting for businesses.

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Table of contents

 

1. The legal framework of SAF-T in Romania

2. How to declare tax information with the SAF-T system in Romania

3. What information must be declared to the ANAF?

4. When to submit a SAF-T declaration in Romania

5. Timeline SAF-T in Romania6. Understanding SAF-T D406 in Romania

7. Implementing SAF-T as a business

8. Other requirements for VAT compliance in Romania

9. FAQ

10. Our Solution

11. Related resources

The legal framework of SAF-T in Romania

The SAF-T mandate in Romania has been introduced through the amendment of the Fiscal Procedure Code, which foresees the obligation for taxpayers to submit a declaration containing information from the accounting and tax records.

The Fiscal Procedure Code also determines that the submission of the SAF-T file must be done electronically, leaving the remaining conditions to be determined by order of the ANAF.

Accordingly, ANAF has issued Order No. 1783, of 4 November 2021, which introduced the SAF-T reporting requirement from 1 January 2022. The Order provided the SAF-T Form D406, as well as the legal deadlines for submitting the various SAF-T files and the procedure and conditions for submission.

In these terms, the D406 file must be submitted electronically by generating an XML format file, which is submitted to a validation procedure, and preparing the corresponding D406 Form in PDF format.

The various SAF-T files can be submitted monthly, quarterly, annually and on-demand, depending on the VAT regime applicable to the taxpayer as well as on the type of file being submitted.

How to declare tax information with the SAF-T in Romania

Transaction and accounting data must be reported through Declaratiei Informative D406. Taxpayers are required to submit the information electronically in PDF format with an XML attachment and electronic signature.

What information must be declared to the ANAF?

The Romanian SAF-T file, the D406, is comprised of five sections:

1. General Ledger
2. Accounts Receivable
3. Accounts Payable
4. Fixed Assets
5. Inventory

The SAF-T D406 file to be submitted on a quarterly/monthly basis does not include information on Fixed Assets or Inventory. That data will be part of separate SAF-T files with different filling frequencies, namely the D406 Assets and the D406 Stocks.

Non-resident and small taxpayers will be required to submit a simplified SAF-T file from 2025 that will only account for the purchases and sales carried out through their Romanian VAT ID.

When to submit a SAF-T declaration in Romania

Submission deadlines for SAF-T in Romania can be monthly/quarterly, annual or on demand by the tax authorities.

Monthly or quarterly: The D406 file, except for the ‘Assets’ and ‘Stocks’ sections, shall be submitted monthly or quarterly by resident taxpayers, depending on the applicable VAT regime. The deadline for submission is the last calendar day of the month following the end of the reporting period.

Annual: The ‘Assets’ section can be submitted autonomously and must be filled annually by resident taxpayers within the deadline for submitting the annual financial statements.

On request: The ‘Stocks’ section shall be submitted only if requested by the tax authorities within the deadline established by that request, which cannot be shorter than 30 days.

Timeline of SAF-T in Romania

Romania’s implementation of SAF-T began on 1 January 2022 but only for a specific category of taxpayers. The following dates are when the SAF-T obligation applies to different types of taxpayers:

• September 2021: Voluntary test period began
• 1 January 2022: Large taxpayers included in the tax authority’s list from 2021 must file SAF-T
• 1 July 2022: Large taxpayers who were not in this category on 1 January 2022 must file SAF-T
• 1 January 2023: Medium-sized taxpayers, financial institutions and insurance firms categorised as large taxpayers must file SAF-T
• 1 January 2025: Small taxpayers and non-resident taxpayers registered for VAT in Romania must file SAF-T

Understanding SAF-T D406 in Romania

The SAF-T D406 statement is required to be submitted each month or quarter to the Romanian tax authority (ANAF). The submission frequency is dependent on the company’s VAT regime, and it can either be monthly or quarterly.

There is also an annual SAF-T report under D406 – based on the taxpayer’s financial year – which includes asset information from the previous year, as well as a D406 Stock information report which is to be created based on the ANAF’s request.

The SAF-T file must be submitted electronically, through the tax authorities’ public service “Servicii online – Depunere declarații”​.

Implementing SAF-T as a business

Compliance is important for businesses if they are to avoid fines and other penalties from Romania’s tax authorities. To comply with SAF-T, taxpayers must meet reporting deadlines with relevant and complete information – the use of purpose-built solutions can help with this.

Sovos SAF-T solutions can help your organization save time and effort when ensuring compliance with the mandate. Automating the process of preparing files helps not only with efficiency but also accuracy and compliance, providing peace of mind and freeing up valuable time.

For taxpayers established outside of the EU, complying with Romania’s VAT rules requires the appointment of a fiscal representative should they sell in the country. Sovos can help here too – contact us for more information.

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Other requirements for VAT compliance in Romania

Tax compliance in Romania goes beyond the SAF-T obligation, especially with Romania’s big push into e-invoicing.

The country introduced an e-invoicing requirement for B2B transactions of high-fiscal risk products in December 2021 and followed that up with an obligation for B2G transactions in May 2022. Both were implemented in July 2022.

Romania is aiming to make e-invoicing mandatory for B2B transactions of all types. Following the EU Council’s derogatory decision, allowing Romania to implement mandatory e-invoicing, Romania published a new B2B mandate with a 2024 oll-out date. The new law also introduces a new reporting system that will operate within the first six months of the introduction of the RO e-Factura e-invoicing system in July 2024. Read more in this overview about e-invoicing in Romania or take a look at this overview about VAT compliance in Romania.

Get in touch with our experts if you need help.

FAQ

Is SAF-T mandatory in Romania?

SAF-T became mandatory for large resident taxpayers in Romania in January 2022, and for medium-sized resident taxpayers in January 2023. Small and non-resident taxpayers will be obligated under the SAF-T mandate in January 2025.

How does SAF-T compliance differ in Romania compared to other countries?

While SAF-T has a similar reporting format across countries, each country as its own mandatory fields. In Romania, three different declarations are submitted by taxpayers: the general D406 file, the D406 Assets and the D406 Stocks.

What businesses need to comply with SAF-T in Romania?

SAF-T in Romania currently applies to medium-sized and large resident taxpayers. Small and non-resident taxpayers will need to comply with SAF-T from 2025.

Are there any penalties for non-compliance with SAF-T in Romania?

Taxpayers who fail to comply with SAF-T in Romania by not submitting the D406 report may be fined by the tax authority. There is a three-month grace period for non-submission in which no fines will be issued, but after the period a fine of 1,000-5,000 RON may be imposed. For an incorrect or incomplete submission, taxpayers may receive a fine of 500-1,500 RON.

What are the submission deadlines for SAF-T declarations in Romania?

The submission deadline for SAF-T in Romania ends on the last day of the month following the reporting period, which is either a month or a quarter for information outside of stocks and assets.The D406 Assets declaration is to be submitted within the deadline for the yearly submission of the taxpayer’s financial statements.

The D406 Stocks declaration is to be submitted on demand, within the deadline prescribed by the Tax Authorities (a minimum 30-day deadline).

Our Solution capabilities for Romania SAF-T

Data Extraction

Painlessly aggregate and consolidate data from a wide range of source systems across General Ledgers, Accounts Receivable, Accounts Payable (for monthly or quarterly submissions), Fixed Assets (for annual submissions) and Inventory (submitted on demand) complying with Romania’s standard tax control file, D406.

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Data Analytics

Check the accuracy, integrity and quality of complex data structures required by Romania SAF-T to give you peace of mind before you submit your D406 file to be audited by the ANAF.

More about data analytics

File Generation

Ensure that all required data sets from accounting entries, sales and purchase transactions, asset depreciation, stock movements and more, are mapped seamlessly into Romania’s D406 schema, ready to be analyzed and submitted punctually to the ANAF.

More about file generation

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