Major tax legislation in Romania

For several years, Romania has been preparing for a significant transformation in the area of invoicing. As of January 1, 2024, the electronic invoicing for B2B transactions will be mandatory. This decision was taken by the Romanian Ministry of Finance with the aim of modernizing the country's business and tax practices.

The European Commission has also played a significant role in this transition, authorizing Romania to implement mandatory B2B e-Invoicing for three years, from January 2024 to December 2026, or until the EU decides to adopt the ViDA initiative.

The generalization of e-Invoice is already underway

Since 2021, the Romanian government ordinances succeed one another to lay the foundations for the national e-invoicing system (120/2021) and to gradually introduce requirements to issue electronic invoices.

The mandatory e-Invoicing for B2G transactions

Electronic invoicing for B2G transactions has been mandatory as of July 1, 2022, in accordance with the 139/2022 Law. This decision states that all Romanian public procurement transactions must be invoiced through the RO e-Factura invoicing platform. The authorized formats are the UBL 2.1 format as well as CII XLM on the European semantic standard EN 16931 without any additional extensions.

Requirements for some products

The government Order 130, published in December 2021, had introduced the obligation to issue electronic invoices from July 2022 for companies selling specific categories of products considered to be at "high risk of tax evasion" (fruit and vegetables, alcohol, construction, mineral products, clothing and footwear...).

The RO e-Factura Platform

The key to transition

To facilitate the changeover to e-Invoicing, Romania is introducing the RO e-Factura platform in November 2021. This platform enables the exchange of invoices both with public administrations (B2G) and between private companies (B2B). Invoices must be generated in accordance with the RO_CIUS standard and must be submitted within five working days of its issuance.

After its submission, each invoice are assigned with an identification number and the platform performs validations to ensure compliance in terms of syntax and semantics. Once validated, invoices are signed by the Ministry of Finance to guarantee their integrity.

Issuers and recipients must store electronic invoices signed by the Ministry of Finance (MOF) for at least 10 years, in accordance with regulations.

How the reform works ?

The Romanian and French tax legislation are quite similar with few exceptions:

• Non-domestic B2B invoices are expected to be exchanged via the RO E-Invoicing platform from January 1, 2024 (with a 3-months tolerance period) in a E-Reporting mode. However, this will only apply to invoices from foreign suppliers with a Romanian VAT number.

  After this grace period, companies that fail to comply with the new regulations will be subject to fines, ranging from 5,000 to 10,000 lei (approx. 1,000 to 2,000 euros) for large corporations and 500 to 2,500 lei (approx. 100 to 500 euros) for other taxpayers.

• Domestic B2B invoices are expected to be exchanged via the RO e-Factura platform from July 1, 2024.

• There are no E-Reporting for the invoicing of non-domestic customers, nor for the B2C perimeter.

The Romanian legislator's aim is to implement a pragmatic regulation that will enable the majority of the country's companies to be on board in record time.

Digitizing the tax system: towards efficiency and transparency

The switch to electronic invoicing is an integral part of the wider effort to digitalize the Romanian tax system. The Finance Minister, Dan Vîlceanu enhances the importance of this digital transformation to improve the relationship between the private sector and the tax administration. He insists on the transparency in the management of public funds and the need for a proactive and efficient public administration.

In conclusion, Romania has resolutely moving towards mandatory electronic invoicing to improve tax efficiency and modernize its administrative processes. This evolution is part of the increasing digitization of the Romanian public sector, with a clear objective of simplifying and increasing transparency in business and tax transactions.

The ICD International's Digitalization Invoice Platform, Dématrust, is compliant with numerous international laws, including the Romania’s legislation.
Should you wish to discover how ICD International can support your company’s flow audit and bring your processes into line with the Romanian e-Invoicing act, please contact us by leaving your information on our contact form.

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