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Romania – Changes in the VAT Legislation in Romania

By December 18, 2016July 10th, 2021No Comments

Changes recently brought to the VAT legislation in Romania, which should come into force starting on 1 January 2017 (but may be postponed)…

Changes recently brought to the VAT legislation in Romania, which should come into force starting on 1 January 2017 (but may be postponed). The amendments were approved by the Government on Tuesday.

  • Standard VAT rate will be reduced to 19%;
  • Romania introduces a new special VAT regime for small farmers – basically, this regime applies to individuals and family enterprises which supply goods/services in the agriculture sector. The farmers do not have deduction right for input VAT and will have no obligation to collect VAT on their supplies. Instead they will apply a fixed compensation percentage to the value of the supply (1% for 2017, 4% for 2018 and 8% for 2019). The value of the compensation will be reflected on the invoice and paid by the client (this will function similarly to output VAT, but instead of 19% VAT, the farmer will show on the invoice a 1% compensation in 2017). This compensation covers the farmer’s cost with input VAT and exempts the farmer from hassling VAT reporting obligations. The clients have full deduction right for the compensation paid under similar rules as applied to input VAT; non-resident companies acquiring goods/services from such taxable persons will be granted deduction right (the refund procedure will be set in place soon).
  • Companies which were declared inactive or had their VAT number cancelled as punishment for failure to comply with the mandatory VAT obligations will have the right to deduct any input VAT (related to acquisitions made during the period their VAT number was not active) in the VAT return submitted after their re-registration for VAT purposes. Similarly, the clients which made acquisitions from such suppliers will have the right to deduct input VAT as soon as the supplier re-registers for VAT and issues a correct invoice which shows VAT. Previously for both the suppliers with cancelled VAT numbers as well as their buyers the Romanian law included punishing provisions which were not precisely in line with the VAT Directive.
  • Romania drops the Register of Intra-Community Operators and will revert to the provisions before 2010. All VAT numbers issued will be automatically active for intra-community operations as well, without any additional obligations from the business.
  • The obligation to submit a set of informative VAT declarations is suspended until the end of 2019. This refers to tax forms 392A, 392B and 393.


Emilia Dragu
DC Tax