A taxpayer is considered stable for VAT on business premises, respectively where key decisions are taken on the management or exercising its functions. Also, a non-resident person is considered stable in Romania for VAT in case of a fixed establishment in Romania that has sufficient technical and human resources to perform regular deliveries of taxable goods and services.
Operations in the scope of VAT in Romania are those who meet the following conditions:
- represents a supply of goods/provision of services or payment of an assimilated operation;
- the place of delivery/supply is located in Romania;
- are made by taxable persons;
- are the result of economic activities.
Since January 2019, the standard VAT rate in Romania is 19%. It applies to all deliveries of goods and supplies of services, including imports, for which no exemption applies (with or without credit) or one of reduced VAT rates. Reduced VAT rates remain unchanged (5% and 9%).
The reduced VAT rate of 9% in Romania is charged for all kinds of bread and bakery products, certain wheat types, human and veterinary medicines, books, newspapers and periodicals, accommodation in hotels or in locations with similar role, cinema tickets, entrance fees to museums, monuments, zoos, fairs and exhibitions, prosthetic and orthopedic products.
VAT Deduction
Every taxable person in Romania shall be entitled to deduct VAT on purchases if they are designed to make taxable transactions. VAT deductible for expenses incurred for the purpose of establishing operations can be inferred retrospectively after fulfilling all the conditions of deductibility of VAT, for a period not exceeding five years. Justification tax deduction can be done based on invoices sent electronically.
Companies that own a single authorization for simplified customs procedures issued by another Member State or performing imports of goods for VAT in Romania for which they are not obliged to submit customs declarations for imports can deduct the tax due on importation of goods import declaration for VAT and excise duties. The registration of taxable persons for VAT purposes in Romania may be made by:
- Standard registration for VAT purposes to companies established in Romania;
- Special registration for VAT purposes for acquisitions (for example public institutions, insurance companies);
- Registering for VAT to taxable persons not established/established in the EU by appointing a tax representative for VAT purposes;
- Direct registration for VAT purposes only by taxable persons established in the EU.
VAT registration steps to consider
The registration procedure for VAT in Romania is not complex, however, it is best to talk to one of our accountants in Romania and receive complete information and support in this matter. The following steps can help an entrepreneur in Romania understand better the VAT registration:
- ANAF provides the registration application which needs to be submitted by the company owners.
- Forms 098 and 088 are needed for companies exceeding 300,000 RON threshold and must be submitted to the Trade Register.
- Form 099 is mandatory for VAT re-registration, as stated by the Tax Code.
- Some economic operators can use forms 010 and 088 to register for VAT at the same time when the company registration is made.
Our experts can take care of the VAT registration process of companies in Romania, so do not hesitate to address your inquiries to our team.
Short facts about the applicable VAT in Romania
The standard VAT rate is set at a 19% for most goods and services provided, but one should know how the reduced VAT rates apply. For instance, the 9% VAT rate is applicable to varied product deliveries related to agriculture and local utility services. As for the VAT 5% rate, this applies to school supplies, entertainment events, accommodations, restaurants and catering, transportation, etc.
As for the VAT rate imposed on the import of goods, the rate is applicable in Romania to product delivery. Also, for the purchase of goods, the applicable VAT rate is the one applicable in Romania for the delivery of goods in question, in force on the date when the rate was imposed. If you would like to know more about the VAT rates applicable in Romania, feel free to address your inquiries to our team of accountants in Romania.
What is the EU VAT number?
The EU VAT number is the intra-community VAT number applicable to companies selling products and services within the EU countries. If your company is subject to this kind of trading activities, the registration for this number is mandatory, and the first step in this direction implies the registration as an intra-community operator, followed by several company documents which need to be submitted to the fiscal authorities.
The Bizonaire team is able to provide the most professional accounting help regarding VAT registration in Romania. Do not hesitate to contact us right away!
