Tag VAT returns

If you run a business in Romania, you might be wondering whether you need to register for VAT (value-added tax) and how to do it. VAT is a type of consumption tax that is added to the price of goods and services sold by businesses. It is collected by the businesses on behalf of the government and paid to the tax authority.

Registering for VAT is not only a legal obligation for some businesses, but also a smart move that can boost your credibility, expand your market, and save you money. In this article, we will explain everything you need to know about getting a VAT number in Romania, from the eligibility criteria to the registration process, and from the obligations to the advantages of being a VAT payer.

As an experienced accountant office in VAT procedures, we have helped many small and medium-sized businesses obtain a VAT number in Romania and navigate the complex tax system. We will share with you some tips and tricks that will make your life easier and your business more successful.

Who needs to register for VAT in Romania?

The first question you need to ask yourself is whether you need to register for VAT in Romania at all. The answer depends on several factors, such as:

• Your turnover: If your turnover exceeds 300,000 RON (about 62,000 EUR) in a calendar year, you are obliged to register for VAT in Romania. If your turnover is below this threshold, you can choose to register voluntarily or opt for a simplified tax regime that exempts you from VAT.
• Your intra-community transactions: If you perform intra-community acquisitions or supplies of goods or services, meaning that you buy or sell goods or services from or to other EU countries, you are obliged to register for VAT in Romania, regardless of your turnover. This also applies if you provide electronic services (such as software, e-books, online courses, etc.) to non-VAT payers (such as individuals or non-profit organizations) in other EU countries.
• Your location: If you are established in another EU country and only perform occasional transactions in Romania, you are not obliged to register for VAT in Romania, but you might need to appoint a fiscal representative who will handle your VAT obligations on your behalf.

Of course, there are some exceptions and exemptions that apply to certain types of businesses or activities.

For example, if you only perform exempt supplies of goods or services, such as education, health care, financial services, etc., you are not obliged to register for VAT in Romania. However, this also means that you cannot deduct or reclaim any VAT paid on your purchases or expenses related to your business activity.

How to register for VAT in Romania?

If you have determined that you need to register for VAT in Romania, the next step is to follow the registration process. The good news is that the process is mostly online and relatively straightforward.

The bad news is that it can take up to 30 days for your registration request to be approved or rejected by the competent tax authority.

Here are the steps involved:

• Fill out and submit the online form 088 (Declaration on the intention and ability to carry out economic activities involving operations within the scope of VAT) on the ANAF website (National Agency for Fiscal Administration). This form is mandatory for all businesses that want to get a VAT number in Romania and aims to verify their economic substance and credibility. You will need to provide information about your business activity, your associates, your bank account, your premises, your suppliers and customers, etc. You will also need to attach some supporting documents, such as the certificate of incorporation or registration of your business, the identity documents of the legal representative and the associates, the lease contract or proof of ownership of the business premises, etc.
• Fill out and submit the online form 010 (Declaration on tax registration / Statement for amending tax registration data) on the ANAF website. This form is used to request the issuance of a VAT number in Romania and certificate. You will need to provide information about your business name, address, legal form, fiscal regime, etc. You will also need to attach some supporting documents, such as the contracts or invoices related to the intra-community transactions or electronic services.
• Wait for the approval or rejection of your registration request by the competent tax authority. This can take up to 30 days from the date of submission of the forms and documents. You will receive a notification by email or post informing you about the outcome of your request. If your request is approved, you will receive your VAT number in Romania and certificate. If your request is rejected, you will receive an explanation of the reasons for rejection and instructions on how to appeal or resubmit your request.

Start charging and collecting VAT from your customers at the applicable rate (19%, 9%, or 5%, depending on the type of goods or services) and issuing invoices compliant with the legal requirements.

What are the obligations and advantages of being a VAT payer in Romania?

Once you have your VAT number in Romania, you will have some obligations and advantages that you need to be aware of. Here are the main ones:

• You will need to file monthly or quarterly VAT returns and pay any VAT due to the tax authority by the 25th day of the following month or quarter. The VAT returns are submitted online on the ANAF website and contain information about your VAT-related transactions, such as the total value of your sales and purchases, the amount of VAT charged and collected, the amount of VAT paid and deducted, etc. You will also need to submit recapitulative statements for your intra-community transactions and electronic services.
• You will need to keep accurate and complete records of all your VAT-related transactions and store them for at least 10 years. You will also need to issue invoices compliant with the legal requirements, such as including your VAT number in Romania, the date and number of the invoice, the name and address of the customer, the description and quantity of the goods or services, the unit price and the total price, the VAT rate and the amount of VAT, etc.
• You will be able to deduct and reclaim any VAT paid on your purchases or expenses related to your business activity from the VAT collected from your customers. This means that you will only pay the difference between the input and output VAT to the tax authority. If the input VAT is higher than the output VAT, you will be entitled to a refund of the excess amount. However, you will need to prove that your purchases or expenses are necessary and justified for your business activity and that you have valid invoices from your suppliers.
• You will benefit from simplified procedures and lower costs when trading with other EU countries or applying for EU funds. For example, you will not need to pay customs duties or import VAT when importing goods from other EU countries, you will not need to register for VAT in other EU countries where you perform occasional transactions, you will not need to charge VAT to your customers in other EU countries (except for electronic services), you will be able to use the reverse charge mechanism for certain transactions, etc.

Getting a VAT number in Romania is not as complicated as it might seem at first glance. If you follow this step-by-step guide, you will be able to complete the registration process smoothly and efficiently. However, if you encounter any difficulties or have any doubts, we recommend that you consult a professional accountant specializing in VAT procedures who can assist you with your specific situation.

Being a VAT payer in Romania can bring you many benefits for your business, such as increased credibility, access to EU markets, and tax savings. However, it also comes with some responsibilities that you need to fulfill diligently and accurately. By doing so, you will avoid any penalties or audits from the tax authority and ensure that your business complies with the tax regulations in Romania.

If you have any questions or feedback, please feel free to contact our specialized VAT accountants.