Registration for VAT purposes
Our team assists foreign and local investors who wish to make this registration, either voluntarily or when the company exceeds the mandatory registration threshold.
The establishment of a company involves several steps, part of which take place before the actual corporate registration, while others must be completed after registration with the Trade Register.
One of the steps that must be taken into account by investors once they register a company in Romania is the subsequent registration for VAT purposes
The value-added tax is one of the most important taxes to which Romanian companies are subject, however, registration for VAT purposes
is not performed automatically.
Companies can register for VAT purposes by option
(voluntarily) or when exceeding the threshold of RON 300,000 for their annual turnover.
Below, we invite you to read about the registration for VAT purposes
If you need more information, or if you require specialized assistance for this registration (through a power of attorney), our team specializing in company formation in Romania
can give you the needed details and can assist you.
VAT registration in Romania for foreign companies
Foreign companies are required to register for VAT purposes in Romania on a mandatory basis, as the registration threshold only applies to taxable companies registered in Romania.
Non-resident companies are expected to register when they engage in certain types of activities, such as the transfer of goods to Romania, Intra-Community acquisition of supply of goods in the country, the export of goods, distance sales (subject to conditions), or other cases involving the dispatch of goods to Romania.
The following issues are relevant to non-resident legal entities:
- a taxable person that has its seat of economic activity outside Romania does not have a fixed seat/s in Romania is obliged to register for VAT purposes in Romania for the operations defined in the Fiscal Code (see below);
- a taxable person whose economic activity is based in Romania and who has branches and other secondary offices on the territory of Romania, without legal personality, is assigned a single registration code for VAT purposes according to art. 316 of the Fiscal Code;
- a non-resident company without a registered office or seat of activity in the country can assign a fiscal representative for the purpose of VAT registration when the said taxable person is not established in an EU Member State;
- the foreign company will observe the VAT filing and reporting requirements set forth by the authorities (you can read more about these below) and the appointed tax agent, if applicable, will handle the submissions.
A taxable person who has the headquarters of economic activity outside Romania, but has a fixed seat in Romania must register for VAT purposes as follows:
- before the receipt of the services, in those situations in which the company will receive, at its fixed headquarters in Romania, services for which it is obliged to pay the value-added tax in Romania according to the law if the services are provided by a taxable person who is established in another Member State (within the meaning of the applicable laws);
- before the provision of the taxable services, in the situation in which the foreign company will provide the services from its fixed headquarters in Romania to a beneficiary who is a taxable person in another Member State and who is required to pay VAT in another Member State, according to the equivalent laws in that respective Member State;
- before carrying out certain economic activities from its respective fixed headquarters under the conditions established by law, activities that involve the following:
- the delivery of taxable and/or exempt goods with the right to deduct, including intra-Community supplies exempt from VAT;
- services that are either subject to or exempt from value-added tax, with deduction right, other than those provided for in letters a) and b);
- operations exempt from tax, when the company opts for their taxation, according to art. 292 paragraph (3) of the Fiscal Code;
- intra-Community acquisitions of taxable goods.
The provisions briefly listed above do not apply to a person treated as a taxable person only because they occasionally make intra-Community supplies of new means of transport.
VAT registration requirements in 2022 for local companies
National Agency for Fiscal Administration (NAFA/ANAF) President’s Order no. 239 of February 17, 2021, published in the Official Gazette no. 182 of February 23, 2021, offers the legal context for the Registration Procedure approved for value-added tax purposes, according to the provisions of art. 316 paragraph (1) letter. a), b) or c) of Law no. 227/2015 on the Fiscal Code, with its subsequent amendments and additions.
According to the legal procedure, any taxable person having its seat of economic activity in Romania, that carries out or intends to carry out an economic activity that involves taxable operations, is exempt from VAT with the right of deduction, and/or operations that have the place of delivery of the service outside Romania, but which give the right to deduction, must be registered for VAT purposes according to article 316 paragraph (1) letter a), b) or c) of the Fiscal Code.
According to law, registration for VAT purposes
takes place before or after the commencement of economic activity in Romania.
can assist with this registration.
Voluntary VAT registration in Romania
Voluntary registration for VAT purposes in Romania is the situation in which the taxable person submits the VAT registration request before the start of its economic activity, upon declaring that it will exceed the standard registration threshold of RON 300,000 for the fiscal year.
This type of voluntary registration can also take place if the taxable person declares that they will have a turnover below the threshold, but opts for the registration, nonetheless.
The applicant has two options:
- submit the application for registration for VAT purposes (Form 098) when the legal entity is an SRL or SA company that is subject to mandatory registration with the National Trade Register;
- submit the application for registration (Forms 010, 070) for taxable persons that are not subject to registration with the National Trade Register (associations, foundations, etc.); in this case, the registration form is submitted at the same time as the first fiscal registration, usually upon establishment, and the request of registration for VAT purposes is done by filling in the information on the fiscal vector (found within the section concerning VAT within the form).
The registration for VAT purposes
is valid starting with the date on which the registration certificate for VAT purposes is communicated to the applicant.
The registration process was simplified through Emergency Ordinance 69/2020 through which locally registered companies can be registered for VAT purposes and are no longer subject to risk analysis, irrespective of whether they request the VAT code upon their initial registration or afterward.
For these companies, the risk analysis is to be performed following the VAT registration, during the company’s activities.
Our team can help you throughout the VAT registration procedure
We also provide accounting services upon request and you can find out more information about our VAT-submission-related services by reaching out to us.
Our team will handle all of the aspects concerning the business formation
, including VAT registration for legal entities such as SRL and SA companies, and also for entities that are not subject to compulsory registration.
Registration for VAT purposes after exceeding the threshold in 2022
Once the threshold of 300,000 lei has been exceeded, a company will have the obligation to register for VAT purposes in Romania. The steps for obtaining the VAT code both at the optional registration and at exceeding the ceiling include:
- submitting the statutory statement of the administrators or associates, according to the type of company (this is usually done online);
- filing in the required information, along with the data concerning the company’s directors and associates;
- submitting the forms and other documents;
- waiting for the verification of the documents submitted both online and in physical format with NAFA;
- receiving the decision approving the registration for VAT purposes.
It is good to keep in mind that the National Agency for Fiscal Administration can reject the application if the submitted documents are non-compliant.
We advise company owners in Romania to reach out to our team if they wish to verify the list of documents that need to be submitted for VAT registration purposes.
By working with us, you can rest assured that the registration process will be straightforward.
We can also help you obtain the EORI code which will be useful in intra-Community economic activities.
Other information about registration for VAT purposes in Romania
If the taxable person applying for registration for VAT purposes is declared inactive for fiscal purposes, the specialized department will draw up the Decision to cancel the registration for VAT purposes;
Our team can give you more details about particular situations and can provide you with counseling as needed, according to the type of company, its economic activities, and the projected annual turnover.
VAT rates in Romania
Value-added tax is an indirect tax applied to the provision of certain types of goods and services.
The following rates were in force at the time this article was written:
- 19% standard tax rate applicable to the provision of most types of goods and services, other than those explicitly exempted or subject to lower rates;
- 9% first reduced tax rate applicable in case of medicines for human and veterinary use, certain foodstuffs (except for alcohol), fertilizers, seeds, and other types of agricultural products;
- 5% second reduced tax rate applicable in case of books, newspapers, magazines, restaurant and catering services, access to museums, and in other cases;
- Exempt under specific rules: the export of goods, the intra-Community supply of goods, international passenger transport, some banking and financial operations, and medical and educational services.
Our team can give you more details about the conditions for the VAT exemptions in Romania.
VAT reporting and submission requirements
As in all other countries that impose this indirect tax, local and foreign companies in Romania are not only required to observe the VAT registration threshold and mandatory requirements, but also those for periodic VAT reporting, filing and payments.
VAT returns are submitted monthly and taxable legal entities with an annual turnover below EUR 100,000 are required to submit quarterly filings and make quarterly payments.
VAT submissions are to be made no later that the 25th
day of the month following the one for which the return is made or following the period for which the return is submitted.
Working with an accountant is the common practice, and VAT reporting and filing will be handled accordingly.
Our team assists local and foreign companies operating in Romania that engage in transactions that are subject to the standard or reduced value-added tax rates.
For help in setting up a company and registering for VAT purposes
in 2022, please contact us
We can also provide you with more details about the micro-company
regime and how companies can prepare for the upcoming changes to this regime.
You can always reach out to us for updated information about corporate compliance in Romania.