Regulatory updates - Romania

The Romanian government has circulated draft legislation on the upcoming obligation to report invoices for B2C transactions. Legislation passed in June 2024 established the requirement for taxpayers engaging in business-to-consumer transactions to transmit electronic invoices as of January 2025. The draft legislation supplements and clarifies select aspects related to the expansion of the mandate.

To begin with, the inclusion of simplified invoices differs from previously published information. Starting January 2025, the previously exempt simplified invoice, defined by the Fiscal Code as invoices with a value of 100 EUR or less, will be in the scope.

Furthermore, addressing previous GDPR concerns, the requirement for beneficiary information to be on the invoice has been removed. Invoice issuers may now use an arbitrary all zero 13-digit value in the field associated instead.

Pagero continues to monitor developments in Romania and analyze the requirements.

The announcement made by the Ministry of Finance mentions new changes being implemented, as well as the extension of grace periods to adopt the systems.

Previously, the grace period for compliance with the RO e-Transport system, in which no penalties were to be levied, was to end on 1 July 2024. The grace period has now been extended until 1 January 2025.

Authorized economic operators are explicitly mentioned in connection with the new measures and timelines associated with the RO e-Transport system. The remaining changes for the digital systems have been passed into law by this Emergency Ordinance.

The Romanian Minister of Finance announced the plan to extend e-invoicing requirements from 1 January 2025, with optional use becoming available from 1 July 2024 for B2C transactions. The extension will facilitate ANAF’s (Romanian Tax Authority) reception of accurate invoice data. This data will be further used in pre-filled e-vat returns, a vital tool in Romania’s fight against tax evasion.

The extended requirements encompass all taxable persons issuing invoices directly to consumers. The B2C transactions will have to be reported in the RO e-Factura system. B2C transactions related to tourism and holiday vouchers have required the reporting of electronic invoices since April 2022, so it seems that the extension of regulations will be applied to the remainder of the sector. However, more information is yet to come.

Parties exempted from the e-invoicing obligation in this context include:

• Taxable persons issuing invoices for transactions not subject to VAT;
• Diplomatic missions and consular offices;
• Branches of the Romanian armed forces;
• The European National Bank;
• And more.

Specific associations, foundations, and farmers operating under the special regime will also be required to adhere to the new requirements, beginning 1 July 2025.

Pagero closely monitors these developments. Once the Romanian government clarifies further reporting requirements and timelines, our stakeholders will be notified in due time.

The draft emergency ordinance extends the grace period from 31 March to 31 May. The sanctions for which the grace period applies are for not complying with the 5-working-days invoice reporting requirement of a taxable event/initial issuance of an invoice.

The draft legislation also clarifies the context in which the penalties will be levied. Previously, it was unclear if non-compliance sanctions would be applicable per invoice. Now, it is stated that for one or more invoices in each calendar month, the following penalties will apply:

• RON 1000 to 2500 (ca. EUR 200 to 500) – small taxpayers, legal persons, and ‘other’ legal entities;
• RON 2500 to 5000 (ca. EUR 500 to 1000) – medium taxpayers;
• RON 5000 to 10000 (ca. EUR 1000 to 2000) – large taxpayers.

While the draft law still needs to be approved, it is anticipated this will happen soon.

Reporting on the transportation of high-risk fiscal goods in the RO e-Transport system has been required since July 2022. The scope of required users and scenarios for use of the system has now been expanded to include instances of international transport, regardless of whether goods are considered high risk. International road transport encompasses transport to and from both Member States and third countries.

According to Emergency Ordinance 115/2023, as of 1 March 2024, the following goods will now be considered high fiscal risk:

• Meat and edible organs (CN codes from 0201 to 0210);
• Fish and crustaceans, molluscs, and other aquatic invertebrates (CN codes 0302, 0304 and 0306);
• Milk and dairy products; bird eggs; natural honey; edible animal products, not specified and not included elsewhere (CN codes from 0401 to 0407 and 0409);
• Unprocessed tobacco; raw tobacco and tobacco waste (CN code 2401);
• Other processed tobacco and tobacco substitutes; homogenized or reconstituted tobaccos; tobacco extracts and essences (NC code 2403);
• Tobacco products or tobacco and/or nicotine substitutes, tobacco intended for inhalation without burning; other products containing nicotine intended for the absorption of nicotine in the human body (NC code 2404).

For the transport of both high-risk fiscal goods and international transport, the requirement to obtain an ITU code remains, as well as the requirement to adhere to the telecommunication requirements associated with the system.

Penalties for non-compliance with the new RO e-Transport system requirements will take effect on 1 July 2024.

Discussion between Romanian Prime Minister Marcel Ciolacu and advocacy groups for SMEs has yielded a decision and progress toward developing a mobile application suited to address the recently implemented e-invoicing requirements.

Since the commencement of the first wave of the e-invoicing mandate, there have been ongoing discussions between taxpayers and the Ministry of Finance regarding improvement of the RO e-Factura platform. A mobile application is the third in a series of significant platform upgrades.

The previously implemented removal of duplicate invoices and the introduction of self-billing were large strides forward for the platform. The introduction of the mobile application continues to bolster the system.

As of 1 January, the requirements for issuing invoice data to the RO e-Factura began. The Ministry of Finance has proactively made improvements to the national e-invoicing system to address the concerns of taxpayers within the jurisdiction. These changes include removing the possibility of issuing duplicate invoices, which will be outright rejected, and introduce the option for self-billing. 

The introduction of self-billing allows taxpayers to apply under a wide array of use cases, including the ability for beneficiaries to invoice on behalf of their suppliers. 

Press releases on these updates can be found on the Ministry of Finance Website. 

On 14 December 2023, the Romanian government passed an emergency ordinance that included updated information on different aspects and requirements regarding the use of the RO e-Factura regarding the different obligations for taxpayers. While the timelines for reporting and transmission of electronic invoices remain the same, as well as those that exist for the grace period for the application of penalties, the following changes will now be introduced from 1 July 2024:

• Sanctions for non-compliance with the requirement to report invoices within 5 working days of a taxable event/initial issuance of an invoice, and no later than 5 days after the deadline to issue invoices, between 1000 to 10000 lei for legal entities depending on the taxpayer’s size;
  • 1000 to 2500 lei – small taxpayers, legal persons, and ‘other’ legal entities
  • 2500 to 5000 lei – medium taxpayers
  • 5000 to 10000 lei – large taxpayers
• Sanctions for non-compliance with the requirements to issue and receive invoices via the RO e-Factura platform equal to 15% of the total value of the invoice.

These remaining aspects are applicable as per the commencement of the e-invoicing obligations:

• Transactions with simplified invoices are exempt from transmission obligations;
• If the RO e-Factura system is not functional for more than 24 hours, transmission obligations are suspended until the platform is operational again; and
• Taxpayers may issue invoices based on Fiscal Code provisions while the RO e-Factura platform is not functional, provided that the electronic invoices are subsequently submitted to the platform.

The Romanian Ministry of Finance has also provided a user guide to further assist taxpayers in adapting to the requirements and using the platform to fulfill their obligations.

On 26 October 2023, President Klaus Iohannis signed into force fiscal-budgetary measures for ensuring Romania’s long-term financial stability. The legislation largely includes VAT and other tax-related matters, but importantly, makes the future issuance and reception of electronic invoices obligatory.

The timelines stipulated in the draft law remain the same with the new published legislation as follows:

• Phase 1: Effective 1 January 2024 - B2B e-reporting for both established and non-established companies
• Phase 2: Effective 1 July 2024 - B2B e-invoicing (centralized CTC approach) for established companies while non-established ones remain subject to e-reporting.
• Grace period: No penalties will be levied from 1 January to 31 March 2024.

The deadline for submitting invoices during Phase 1 is 5 days from the date of issuance or taxable event with administration of an invoice.

Penalties for non-compliance levied against taxpayers can range from 1000 LEI to 10000 LEI (ca. EUR 200 to EUR 2000 ).

The draft law, which Romanian legislators announced on the Ministry of Finance website, introduces how they plan to implement the countrywide e-invoicing CTC mandate after receiving derogation from the European Commission. As previously notified by Pagero, this derogation allowed Romania to start a countrywide obligation from 1 January 2024 but required domestic legislation.

The draft law proposes to establish the following important milestones:

• 1 January 2024 – The use of RO e-invoice system (Clearance-type CTC approach) becomes mandatory for all taxpayers established in Romania that already are subject to the existing e-Transport obligations
• 1 January 2024 – The use of RO e-invoice system (Clearance-type CTC approach) becomes mandatory for all established and non-established in Romania, having RO VAT registration (referred to as “e-reporting” obligation)
• 1 April 2024 – Sanctions and penalties become applicable for non-compliance.
• 1 July 2024 – The mandatory exchange (send and receive) of e-invoices through the RO e-invoice system (Centralized Exchange-type CTC approach) for all B2B transactions and all taxpayers established in Romania.

These timelines are unprecedently short, and businesses have very little time to comply; however, further discussions and amendments are still possible. As Romania has previously stuck to short timelines, we encourage businesses to prioritize this project and not leave it at the bottom of the drawer.