VAT in Romania: A Complete Guide for Foreign Businesses and Entrepreneurs in 2026

Introduction: Why VAT Is the Tax That Catches Foreign Businesses Off Guard

Value Added Tax is, in practice, the most operationally demanding tax that any business faces in Romania. Corporate income tax is calculated once a year. Social contributions follow predictable payroll cycles. But VAT touches every transaction — every invoice issued, every purchase made, every cross-border shipment, every digital service sold to a Romanian consumer. It determines how you price your products, when you file returns, how much working capital you need, and whether the Romanian tax authority views your company as compliant or problematic.

For foreign businesses entering Romania, VAT is also the tax most likely to create unexpected obligations. A UK-based e-commerce company fulfilling orders from a Romanian warehouse discovers it needs a Romanian VAT number before the first parcel ships. A German manufacturer supplying Romanian customers assumes the reverse charge applies, only to find that the specific transaction requires local VAT registration. A US software company selling subscriptions to Romanian consumers learns that EU place-of-supply rules make Romania the country of taxation — and that the One Stop Shop scheme, while simplifying compliance, still requires registration and quarterly filing.

Romania’s VAT system follows the EU VAT Directive, which means that the fundamental architecture — taxable supplies, input and output VAT, intra-Community trade rules, reverse charge mechanisms, and the OSS framework — is harmonised across all EU member states. But Romania also applies national implementing rules, specific reduced rates, particular filing deadlines, mandatory electronic invoicing through the RO e-Factura system, SAF-T reporting obligations, and enforcement practices that differ from those of other EU countries. Understanding the EU-wide framework is necessary but not sufficient — the Romanian-specific details are where compliance is won or lost.

This guide explains the Romanian VAT system comprehensively, from the basic mechanics through cross-border trade, digital services, and industry-specific issues. It is written for foreign entrepreneurs, investors, and international companies operating or planning to operate in Romania, with practical guidance on registration, compliance, planning, and the mistakes that are most expensive to correct after the fact.

Understanding VAT in Romania

Value Added Tax is a consumption tax levied on the supply of goods and services at each stage of the production and distribution chain. The tax is ultimately borne by the final consumer, but it is collected incrementally by businesses at every stage — each business charges VAT on its sales (output VAT), deducts the VAT it paid on its purchases (input VAT), and remits the difference to the state. If input VAT exceeds output VAT in a given period, the business can carry the excess forward or claim a refund.

This mechanism — charge, deduct, remit — is the core of every VAT system in the EU, and Romania is no exception. The Romanian VAT regime is codified in the Romanian Tax Code (Codul Fiscal), Title VII, and the implementing norms (Normele metodologice), which transpose the EU VAT Directive (Directive 2006/112/EC) into national law.

• Output VAT. The VAT a business charges on its taxable supplies — sales of goods, provision of services, and other taxable transactions. Output VAT is collected from the customer and reported on the VAT return.
• Input VAT. The VAT a business pays on its purchases — goods, services, equipment, and other business expenses. Input VAT is deductible from output VAT, provided the purchases are used for taxable business activities and supported by valid VAT invoices.
• Taxable supplies. Supplies of goods and services made in Romania for consideration (payment) by a taxable person acting in that capacity. The vast majority of business transactions are taxable supplies.
• Exempt supplies. Certain supplies are exempt from VAT — meaning no VAT is charged, but the supplier also cannot deduct input VAT on related purchases. Exemptions apply to financial and insurance services, medical services, education, and certain real estate transactions, among others.
• Zero-rated supplies. Supplies that are taxable at a rate of 0% — the supplier does not charge VAT but retains the right to deduct input VAT. Exports outside the EU and certain intra-Community supplies of goods are the primary zero-rated transactions.
• Place of supply. The rules that determine in which country a transaction is subject to VAT. For goods, the place of supply is generally where the goods are located at the time of supply or where transport begins. For services, the rules vary: B2B services are generally taxed where the customer is established; B2C services are generally taxed where the supplier is established, with important exceptions for digital services, telecommunications, and broadcasting.

Who Must Register for VAT in Romania?

VAT registration in Romania can be mandatory or voluntary, and the rules differ depending on whether the business is established in Romania or abroad.

• Romanian-established businesses. A company registered in Romania (SRL, SA, or other legal form) must register for VAT when its taxable turnover exceeds the domestic registration threshold of RON 300,000 (approximately €88,500) in a calendar year or rolling 12-month period. Below this threshold, registration is voluntary. Once registered, the company charges VAT on its taxable supplies, files periodic VAT returns, and can deduct input VAT.
• Foreign companies with a fixed establishment. A foreign company that creates a fixed establishment in Romania — through an office, warehouse, branch, or other permanent business presence — is treated similarly to a Romanian-established business and must register for VAT when it exceeds the domestic threshold or when it makes taxable supplies from that establishment.
• Foreign companies without a fixed establishment. This is where the rules become critical for international businesses. A foreign company that is not established in Romania but carries out taxable supplies in Romania — selling goods located in Romania, providing certain services where Romania is the place of supply, importing goods — generally must register for Romanian VAT before commencing those activities. The domestic RON 300,000 threshold typically does not apply to non-established foreign businesses carrying out taxable transactions in Romania; registration is required from the first taxable supply.
• EU businesses. Businesses established in other EU member states may need Romanian VAT registration if they make supplies where Romania is the place of supply and the reverse charge mechanism does not shift the VAT obligation to the Romanian customer. Intra-Community acquisitions, local supplies of goods from Romanian stock, and certain B2C supplies are common triggers.
• Non-EU businesses. Companies established outside the EU face similar obligations but may also need to appoint a fiscal representative in Romania — a Romanian-established entity or individual that assumes joint liability for VAT obligations. The fiscal representative requirement applies to non-EU businesses that are not established in a country with which Romania has a mutual assistance agreement for tax recovery.
• E-commerce and digital businesses. Online sellers and digital service providers selling to Romanian consumers (B2C) may be able to use the One Stop Shop (OSS) or Import One Stop Shop (IOSS) schemes to report and pay Romanian VAT without a local VAT registration — but only if they meet the conditions for those schemes. Businesses that cannot use OSS/IOSS, or that have additional taxable activities in Romania beyond distance selling, will still need a direct Romanian VAT registration.

VAT Registration Thresholds in 2026

When Foreign Businesses Must Register for Romanian VAT

The following situations commonly trigger a Romanian VAT registration requirement for foreign companies.

• Importing goods into Romania. A foreign company that imports goods through Romanian customs must register for Romanian VAT (or have a fiscal representative do so) to account for import VAT and, where applicable, recover it.
• Selling goods from Romanian inventory. A foreign company that stores goods in a Romanian warehouse and sells them to Romanian customers — whether B2B or B2C — is making a domestic supply in Romania and must be VAT-registered. This includes e-commerce businesses using Romanian fulfilment centres.
• Intra-Community acquisitions. A foreign EU business that acquires goods from another EU member state and has them delivered to Romania must account for Romanian VAT on the acquisition through the reverse charge mechanism, which requires a Romanian VAT registration.
• Intra-Community supplies from Romania. A company that dispatches goods from Romania to customers in other EU member states needs a Romanian VAT number to report the zero-rated intra-Community supply and file the EC Sales List (recapitulative statement).
• B2C distance selling exceeding thresholds. An EU-based online seller whose combined EU-wide B2C distance sales exceed €10,000 must either register for VAT in each destination country or use the One Stop Shop (OSS). If the seller chooses not to use OSS, or if it has other taxable activities in Romania, a direct Romanian VAT registration is required.
• Installation and assembly services. A foreign company that supplies goods with installation or assembly in Romania is making a domestic supply — the place of supply is Romania, and VAT registration is required.
• Construction services. Construction and building services performed in Romania are taxable in Romania. Foreign construction companies working on Romanian projects need VAT registration unless the domestic reverse charge applies and the customer accounts for VAT.
• Organising events. Admission to events (conferences, exhibitions, concerts) physically held in Romania is taxable in Romania. Foreign organisers must register for Romanian VAT to account for the admission charges.
• Warehousing and logistics. Holding goods in a Romanian warehouse — whether for call-off stock arrangements, consignment, or fulfilment — can create a VAT registration obligation depending on the specific arrangement and the parties involved.

Romanian VAT Rates in 2026

VAT Exemptions

Certain supplies are exempt from VAT without the right to deduct input VAT. The principal exemptions under Romanian law include financial and banking services (loans, credit, securities transactions), insurance and reinsurance services, medical and dental services provided by authorised medical professionals, education provided by accredited institutions, postal services, and the letting of residential property. The sale of buildings (other than new buildings) and the sale of building land that is not classified as building land under the urban-planning rules are also generally exempt, though the seller may opt to tax certain real estate transactions under specific conditions.

VAT on Domestic Transactions

• B2B transactions. When a VAT-registered Romanian business supplies goods or services to another VAT-registered Romanian business, the supplier charges output VAT at the applicable rate, issues a VAT invoice, and reports the transaction on its VAT return. The customer deducts the input VAT on its own return. In certain specific sectors — including construction services between VAT-registered parties, scrap and waste materials, and energy certificates — a domestic reverse charge mechanism applies: the supplier issues an invoice without VAT, and the customer self-assesses VAT through the reverse charge, reporting both output and input VAT on the same return.
• B2C transactions. When a business sells to a final consumer (individual), VAT is included in the sale price. The consumer bears the economic cost of VAT but does not file VAT returns. The business reports the output VAT and remits it to the state.
• VAT invoices. Every taxable supply must be documented by a VAT invoice (factură) that meets the mandatory content requirements under Romanian law. Romania has also implemented mandatory electronic invoicing through the RO e-Factura system — B2B transactions between Romanian-established entities must be reported through this platform, and the scope of e-invoicing requirements has been progressively expanded.
• Tax point (chargeability). The tax point — the moment when VAT becomes chargeable — is generally the date of supply (delivery of goods or completion of services). For advance payments, VAT becomes chargeable at the date the payment is received. For continuous supplies, the tax point is generally the date specified in the contract for periodic payments or, failing that, the date of invoice.
• Credit notes. When a transaction is cancelled, the price is reduced, or goods are returned, the supplier issues a credit note (factură de stornare) that adjusts the previously charged VAT. Both parties adjust their VAT returns accordingly.

VAT on Cross-Border Trade

Intra-EU Supplies of Goods

When a Romanian VAT-registered business sells goods to a VAT-registered customer in another EU member state, the supply is zero-rated (0% VAT) provided the following conditions are met: the customer has a valid VAT identification number issued by another EU member state (verified through VIES — the VAT Information Exchange System), the goods are physically transported from Romania to another EU member state, and the supplier has documentary evidence of the transport (transport documents, CMR consignment notes, delivery confirmations). The supplier must report the transaction in the Romanian VAT return and in the EC Sales List (declarație recapitulativă) for the relevant period. If the conditions for zero-rating are not met — for example, if the customer’s VAT number is invalid or transport evidence is missing — the supply is treated as a domestic Romanian supply subject to 19% VAT.

Intra-EU Acquisitions of Goods

When a Romanian VAT-registered business purchases goods from a supplier in another EU member state and the goods are transported to Romania, the transaction is an intra-Community acquisition. The Romanian business must self-assess Romanian VAT on the acquisition through the reverse charge mechanism — reporting the VAT as both output VAT (the tax due on the acquisition) and input VAT (the deductible amount) on the same VAT return. The net effect is typically neutral, but the transaction must be reported correctly and supported by the purchase invoice and transport documentation.

Imports from Outside the EU

Goods imported into Romania from outside the EU are subject to import VAT at the applicable Romanian rate (19%, 9%, or 5% depending on the goods), plus any applicable customs duties. Import VAT is assessed at the point of customs clearance and must be paid before the goods are released. The importer can subsequently deduct the import VAT as input VAT on its VAT return, provided the goods are used for taxable business activities. Deferred accounting for import VAT — where the importer reports the VAT on the return rather than paying it at customs — may be available under specific conditions, improving cash flow for businesses with significant import activity.

Exports Outside the EU

Exports of goods from Romania to destinations outside the EU are zero-rated. The exporter does not charge VAT but retains the right to deduct all input VAT on related purchases. To qualify for zero-rating, the exporter must hold evidence that the goods have physically left the EU customs territory — typically a customs export declaration (DAU — Document Administrativ Unic), transport documents, and confirmation of receipt at the non-EU destination. Failure to maintain adequate export evidence can result in the supply being reclassified as a taxable domestic supply with 19% VAT — a significant and avoidable cost.

The Reverse Charge Mechanism

The reverse charge is one of the most important VAT mechanisms for cross-border business, and also one of the most frequently misunderstood by foreign companies operating in Romania.

Under the standard VAT model, the supplier charges VAT and remits it to the tax authority. Under the reverse charge, the obligation to account for VAT shifts from the supplier to the customer. The supplier issues an invoice without VAT, referencing the reverse charge provision, and the customer self-assesses VAT — reporting it as both output VAT (the liability) and input VAT (the deduction) on the same VAT return. The net cash effect is typically zero, but the reporting obligations are real and must be completed correctly.

The reverse charge applies in the following principal situations in Romania.

• Cross-border B2B services. When a foreign business supplies services to a Romanian VAT-registered customer and the place of supply is Romania (under the general B2B rule — where the customer is established), the Romanian customer accounts for VAT through the reverse charge. The foreign supplier does not charge Romanian VAT and does not need a Romanian VAT registration solely for this type of supply.
• Intra-Community acquisitions. As described above, the Romanian acquirer of goods from another EU member state self-assesses VAT through the reverse charge.
• Domestic reverse charge — construction. Supplies of construction services (including installation, repair, maintenance, and alteration of buildings) between VAT-registered parties in Romania are subject to the domestic reverse charge. The supplier issues an invoice without VAT, and the customer accounts for the tax.
• Domestic reverse charge — other sectors. The domestic reverse charge also applies to supplies of waste and recyclable materials, certain energy products (green certificates, greenhouse gas emission allowances), and transfers of CO₂ emission rights between VAT-registered parties.

VAT and Digital Businesses

Digital businesses face specific VAT challenges in Romania because the EU’s place-of-supply rules for electronically supplied services, telecommunications, and broadcasting services are based on the customer’s location — not the supplier’s.

• B2B digital services. When a digital service is supplied to a VAT-registered business customer in Romania, the place of supply is Romania, and the customer accounts for VAT through the reverse charge. The supplier does not charge Romanian VAT and does not need a Romanian VAT registration for this type of supply.
• B2C digital services. When a digital service is supplied to a non-business consumer in Romania, the place of supply is Romania regardless of where the supplier is established. The supplier must charge Romanian VAT at 19% and either register for VAT in Romania directly or use the One Stop Shop (OSS) scheme to report and pay the tax through a single registration in one EU member state.
• What qualifies as a digital service? Electronically supplied services include software downloads, SaaS subscriptions, website hosting, cloud storage, online advertising, digital content (music, video, e-books, apps), online courses (without significant human intervention), and access to databases. The defining characteristic is that the service is delivered over the internet or an electronic network and is essentially automated — requiring minimal human involvement.
• Online platforms and marketplaces. Under EU rules, online marketplaces that facilitate the sale of goods from third-country sellers to EU consumers may be deemed the supplier for VAT purposes — meaning the marketplace is responsible for charging, collecting, and remitting VAT on the sale, rather than the underlying seller. This rule has significant implications for marketplace operators and their Romanian VAT obligations.

The One Stop Shop (OSS) and Import One Stop Shop (IOSS)

The OSS and IOSS schemes are EU-wide simplification mechanisms designed to reduce the compliance burden for businesses making cross-border B2C supplies.

One Stop Shop (OSS)

The Union OSS allows businesses established in the EU to report and pay VAT on all their B2C distance sales of goods and B2C supplies of services across the entire EU through a single VAT registration and a single quarterly return in their home member state. Instead of registering for VAT in every EU country where they sell to consumers, the business registers for OSS once, files one quarterly return listing sales broken down by destination country, and pays the total VAT due in a single payment. The home member state distributes the VAT to the destination countries.

The Non-Union OSS serves the same function for businesses established outside the EU that supply B2C services in EU member states. The non-EU business registers for OSS in one EU member state (the member state of identification) and reports all EU-wide B2C service supplies through that single registration.

Import One Stop Shop (IOSS)

The IOSS allows businesses to report and pay VAT on distance sales of imported goods with a value not exceeding €150 per consignment. Instead of import VAT being collected at the point of customs clearance (which creates delays and additional costs), the supplier charges VAT at the point of sale, reports it through the IOSS return, and the goods clear customs without import VAT being assessed. This significantly improves the customer experience and simplifies logistics for e-commerce businesses shipping low-value goods into the EU from third countries.

VAT Invoices in Romania

Every taxable supply in Romania must be documented by a VAT invoice that meets the mandatory content requirements under the Romanian Tax Code. An invoice that fails to include the required elements may be rejected as a basis for input VAT deduction — both by the customer and by ANAF during a VAT audit.

Mandatory invoice content includes the following: a sequential invoice number, the date of issue, the supplier’s name, address, and VAT identification number, the customer’s name, address, and (for B2B) VAT identification number, a description of the goods or services supplied, the quantity and unit price, the taxable amount (net of VAT), the applicable VAT rate, the VAT amount, the total amount payable, and the currency. For reverse charge transactions, the invoice must include the notation that the reverse charge applies (e.g. “taxare inversă” or “reverse charge”). For intra-Community supplies, the invoice must reference the zero-rating provision and include the customer’s VAT number from another member state.

RO e-Factura. Romania has implemented mandatory electronic invoicing through the RO e-Factura system. B2B transactions between Romanian-established entities must be transmitted through this platform in a structured electronic format. The system validates invoices and transmits them to the recipient. Non-compliance with e-Factura requirements can result in penalties and complications with input VAT deduction. Foreign businesses registered for Romanian VAT should confirm their e-Factura obligations with their Romanian accountant.

Recovering Input VAT

The right to deduct input VAT is one of the core principles of the VAT system — but it is not unconditional. Romanian law imposes specific requirements that must be met for input VAT to be recoverable.

• Business-use requirement. Input VAT is deductible only on purchases used for the business’s taxable activities. Purchases used for exempt activities, personal use, or non-business purposes do not qualify for deduction.
• Valid VAT invoice. The deduction must be supported by a valid VAT invoice that meets all mandatory content requirements. Missing or incorrect invoices are the most common reason for disallowed deductions during tax audits.
• Passenger vehicles. Input VAT on the purchase, leasing, and operation of passenger vehicles is limited to 50% deduction unless the business can demonstrate that the vehicle is used exclusively for business purposes. This is one of the most frequently audited deduction items.
• Entertainment and hospitality. Input VAT on entertainment, hospitality, and protocol expenses (gifts, client entertainment) is deductible only to the extent permitted under the Tax Code — typically subject to specific limits and documentation requirements.
• Mixed-use assets. When a purchase is used for both taxable and exempt activities, the input VAT must be apportioned using a pro-rata calculation based on the ratio of taxable to total turnover. Only the proportion attributable to taxable activities is deductible.
• VAT refunds. When input VAT exceeds output VAT in a given period, the business has a VAT credit. The credit can be carried forward to offset future output VAT obligations, or the business can request a refund from ANAF. Refund requests are subject to verification — ANAF may conduct a desk review or a full tax audit before approving the refund. Refund processing times vary and can be lengthy, particularly for newly registered or foreign-owned businesses.

VAT Returns and Reporting Obligations

• Filing frequency. VAT returns (Decontul de TVA — form D300) are filed monthly by businesses with annual turnover exceeding RON 100,000 in the previous year, and quarterly by businesses below that threshold. Newly VAT-registered businesses file monthly by default during their first calendar year.
• Filing deadline. VAT returns must be filed by the 25th of the month following the reporting period (monthly or quarterly). Payment of any VAT due must also be made by the 25th.
• EC Sales List (declarație recapitulativă). Businesses that make intra-Community supplies of goods or services must file an EC Sales List (form D390) monthly, by the 25th of the following month, listing all intra-Community transactions by customer VAT number and value.
• Intrastat. Businesses whose intra-EU trade in goods exceeds the statistical thresholds must file Intrastat declarations (arrivals and dispatches) with the National Institute of Statistics. The thresholds and filing requirements are updated annually.
• SAF-T (D406). Romania has implemented SAF-T (Standard Audit File for Tax) reporting, which requires businesses to submit detailed electronic accounting data to ANAF in a standardised XML format. The SAF-T obligation is being progressively extended to all taxpayers, and compliance requires accounting systems capable of generating the required data extracts.
• Record-keeping. Businesses must retain all VAT-related records — invoices, receipts, import documents, transport evidence, contracts, and accounting records — for a minimum of ten years. Records must be available for inspection by ANAF at any time during the retention period.

Cash Accounting Scheme for VAT

Romania offers a cash accounting scheme (sistemul TVA la încasare) that allows eligible businesses to account for output VAT only when payment is received from the customer, rather than when the invoice is issued. This can provide significant cash-flow benefits for businesses with long payment cycles or late-paying customers.

• Eligibility. The cash accounting scheme is available to Romanian-established businesses whose annual turnover does not exceed RON 5,000,000 (approximately €1,000,000). This ceiling was increased from RON 4,500,000 to RON 5,000,000 effective 1 March 2026. Businesses that exceed the ceiling during the year must exit the scheme.
• How it works. Under the cash accounting scheme, VAT on sales becomes chargeable when the customer pays — not when the invoice is issued. However, input VAT on purchases from suppliers who are also on the cash accounting scheme is deductible only when the business pays the supplier. For purchases from suppliers on the normal VAT system, input VAT is deductible at the time of invoice, regardless of payment.
• Advantages. The primary advantage is cash-flow improvement — the business does not owe output VAT to the state until it has collected the money from its customer. This is particularly valuable for businesses with receivables that take 30, 60, or 90+ days to collect.
• Disadvantages. Some customers prefer not to deal with suppliers on the cash accounting scheme because their input VAT deduction is delayed until they pay the invoice. This can affect competitiveness in certain B2B markets. Additionally, the administrative burden of tracking payment dates for VAT purposes is higher than under the normal system.

Common VAT Mistakes Made by Foreign Companies

• Late VAT registration. Failing to register before the first taxable supply in Romania — or failing to monitor when the domestic threshold is exceeded — triggers penalties, back-assessment of VAT on all unregistered transactions, and interest charges. Late registration is one of the most expensive VAT compliance failures.
• Applying the wrong VAT rate. Charging 19% on a supply that qualifies for 9% (or vice versa), or failing to apply zero-rating on a qualifying intra-Community supply, creates tax exposure for either the supplier or the customer. Rate errors are difficult to correct retroactively, particularly when the customer has already paid.
• Invalid VAT invoices. Issuing invoices that lack mandatory content elements — missing VAT numbers, missing reverse charge notation, incorrect rates — creates problems for the customer’s input VAT deduction and for the supplier’s own compliance record.
• Missing transport documentation for intra-Community supplies. Zero-rating an intra-Community supply without adequate proof of transport (CMR notes, delivery confirmations, shipping records) means the supply can be reclassified as a domestic taxable supply at 19% during an audit.
• Failure to verify customer VAT numbers. Zero-rating an intra-Community supply to a customer whose VAT number is invalid on VIES at the time of supply removes the basis for zero-rating. VIES verification should be performed and documented before or at the time of each intra-Community supply.
• Incorrect reverse charge treatment. Applying the reverse charge when it does not apply (or failing to apply it when it does) creates incorrect VAT returns for both parties. Reverse charge errors are a leading focus area in Romanian VAT audits.
• Late VAT return filing. Missing the 25th-of-the-month filing deadline triggers automatic penalties and interest, and repeated late filing can lead to deregistration from the VAT register — a severe consequence that disrupts business operations.
• Poor bookkeeping and document retention. Failing to maintain complete, accurate, and accessible records — invoices, contracts, transport documents, payment evidence — makes it impossible to defend VAT positions during an audit and virtually guarantees additional assessments.
• Incorrect OSS reporting. Businesses using the OSS scheme must correctly identify the destination country and apply that country’s VAT rate for each transaction. Reporting errors — wrong country, wrong rate, wrong period — create compliance problems not only with Romania but with every EU member state involved.

VAT Penalties and Tax Audits

• Late registration. Businesses that fail to register for VAT when required face administrative fines and back-assessment of VAT on all taxable supplies made during the unregistered period, plus interest and late-payment penalties.
• Late filing and payment. Late filing of VAT returns triggers fixed administrative fines. Late payment of VAT due triggers interest (currently calculated at a rate set annually, applied per day of delay) and late-payment penalties (a percentage surcharge on the overdue amount). The combined cost of interest and penalties on late payments can be substantial.
• Incorrect returns. Understating output VAT or overstating input VAT on a return — whether through error or intent — results in additional assessments, interest from the original due date, and potential penalty charges. Voluntary corrections submitted before an audit begins are treated more favourably than errors discovered during an audit.
• Tax audits. ANAF conducts regular tax audits, with VAT being one of the most frequently audited areas. Audit triggers include VAT refund requests, inconsistencies in reported data, high ratios of input to output VAT, cross-border transactions, and risk-based selection criteria. During an audit, the business must provide access to all records, invoices, contracts, and supporting documentation. Audit findings can result in additional VAT assessments, disallowed input VAT deductions, interest, and penalties.
• VAT deregistration. ANAF can deregister a business from the VAT register for persistent non-compliance — failure to file returns, failure to report any taxable transactions for an extended period, or inability to be contacted at the registered office. VAT deregistration is a severe sanction that prevents the business from issuing VAT invoices and collecting VAT, effectively halting normal commercial operations.

VAT Planning for Foreign Investors

• Business structure. The choice between a Romanian subsidiary (SRL), a branch, or direct registration as a non-established entity affects VAT registration requirements, input VAT recovery rights, and the administrative burden. A Romanian SRL benefits from the domestic registration threshold and the micro-enterprise regime; a branch creates a fixed establishment; direct non-established registration may require a fiscal representative.
• Supply-chain design. Where goods are stored, how they are transported, and which entity holds title at each stage determine the place of supply and the VAT treatment. A well-designed supply chain minimises the number of VAT registrations needed and optimises input VAT recovery.
• Import strategy. Importing goods into Romania rather than into another EU member state (or vice versa) affects customs duties, import VAT cash-flow timing, and the administrative burden. Deferred import VAT accounting, where available, can significantly improve cash flow.
• Cash-flow optimisation. The timing difference between paying input VAT (on purchases) and collecting output VAT (from customers) creates a cash-flow impact. The cash accounting scheme, where eligible, can reduce this impact. For businesses with significant input VAT (e.g. capital-intensive manufacturing), early voluntary VAT registration allows input VAT recovery from day one.
• Permanent establishment considerations. VAT registration does not by itself create a permanent establishment for corporate income tax purposes, but the activities that trigger VAT registration — warehousing, installation, construction — often do create a permanent establishment. The interaction between VAT and corporate income tax should be analysed together as part of the market-entry strategy.

Industry-Specific VAT Issues

E-Commerce

E-commerce businesses face a convergence of VAT issues: distance selling thresholds, OSS registration, marketplace liability rules, import VAT on non-EU goods, fulfilment-centre VAT registration, and the requirement to charge destination-country VAT rates on B2C sales. The regulatory landscape has become more complex with the progressive expansion of marketplace deemed-supplier rules and the tightening of customs controls on low-value imports. A properly structured e-commerce operation requires upfront VAT planning — not after-the-fact compliance patching.

Manufacturing

Manufacturers operating in Romania deal with import VAT on raw materials and components, intra-Community acquisitions and supplies throughout the EU supply chain, export procedures for non-EU shipments, and domestic reverse charge on certain supplies. VAT recovery on capital expenditure (machinery, equipment, facility construction) is a significant cash-flow consideration. Deferred import VAT accounting and timely VAT refund applications are essential for maintaining working capital.

Real Estate

Real estate transactions in Romania have complex VAT treatment. The sale of new buildings and building land is generally subject to VAT at 19%, while the sale of old buildings and non-building land is generally exempt. Residential housing may benefit from the reduced 5% rate under specific social-policy conditions. Letting of residential property is generally exempt, while letting of commercial property may be exempt or optionally taxable. Construction services between VAT-registered parties are subject to the domestic reverse charge. Investors, developers, and property managers must analyse the VAT treatment of every transaction in the property lifecycle.

Professional and IT Services

Cross-border professional services — consulting, legal, accounting, IT, software development — are generally subject to the B2B place-of-supply rule (taxed where the customer is established), with the customer accounting for VAT through the reverse charge. B2C supplies of digital services are taxed where the consumer is located, requiring either direct local VAT registration or OSS. The SaaS and subscription-based business model creates ongoing place-of-supply and invoicing questions that must be managed on a transaction-by-transaction basis.

Practical VAT Compliance Checklist

1. Determine registration requirement. Assess whether the business’s activities in Romania trigger mandatory VAT registration — importing goods, selling from local stock, exceeding the domestic threshold, making B2C distance sales, or performing installation or construction services.
2. Register for VAT. Submit the registration application to ANAF before commencing taxable activities. For non-EU businesses, confirm whether a fiscal representative is required.
3. Verify customers’ VAT numbers. For every intra-Community supply, verify the customer’s VAT number on VIES at or before the time of supply and retain the verification record.
4. Issue compliant invoices. Ensure every invoice meets the mandatory content requirements, includes the correct VAT rate or reverse charge notation, and complies with RO e-Factura requirements where applicable.
5. Maintain accounting records. Keep complete, accurate records of all transactions, invoices (issued and received), transport documents, customs declarations, contracts, and payment evidence.
6. File returns on time. Submit VAT returns (D300), EC Sales Lists (D390), Intrastat declarations, and SAF-T reports (D406) by their respective deadlines. Pay any VAT due by the 25th of the month following the reporting period.
7. Review input VAT deductions. Confirm that all claimed input VAT deductions are supported by valid invoices, relate to taxable business activities, and comply with specific limitation rules (passenger vehicles, entertainment).
8. Retain documents. Keep all VAT-related records for a minimum of ten years. Ensure records are accessible for ANAF inspection.
9. Monitor OSS obligations. If using the OSS or IOSS scheme, file quarterly returns on time, apply the correct destination-country VAT rate, and monitor whether additional taxable activities in Romania require a separate direct VAT registration.
10. Conduct periodic VAT health checks. Engage a Romanian tax adviser to review VAT compliance at least annually — checking registration status, rate application, deduction eligibility, cross-border treatment, and documentation completeness.

Frequently Asked Questions

Conclusion

VAT is the most operationally complex tax that foreign businesses face in Romania. It touches every invoice, every cross-border shipment, every pricing decision, and every filing deadline. The Romanian VAT system, while built on the EU-wide framework, applies national rules on rates, thresholds, e-invoicing, SAF-T reporting, and enforcement that require specific local knowledge.

The foreign businesses that manage Romanian VAT successfully are those that plan before they trade — assessing registration requirements, modelling the VAT cost of different supply-chain structures, understanding the reverse charge and its limits, ensuring that invoicing and documentation meet Romanian standards, and engaging a qualified Romanian accountant and tax adviser from day one. The cost of proper VAT compliance is predictable and manageable. The cost of getting it wrong — back-assessments, penalties, interest, VAT deregistration, disrupted operations — is not.

Romania offers genuine advantages for foreign businesses: EU market access, competitive operating costs, a skilled workforce, and one of the most favourable micro-enterprise tax regimes in Europe. Realising those advantages requires getting the VAT right. Professional advice at the planning stage is the single most effective investment a foreign business can make when entering the Romanian market.