E-invoicing in Romania: Requirements, Challenges and Solutions
Background
Romania has been pursuing various digitization projects to strengthen VAT collection and close its VAT gap. This comes as no surprise, as according to the latest EU statistics, Romania has the largest VAT gap in the EU.
The Romanian Tax Authority (ANAF) has implemented e-invoicing for B2B and B2G transactions to address this issue. Starting in January 2024, the Romanian e-invoicing requirements were expanded to include all B2B transactions. Fines for non-compliance will be enforced from June 1, 2024. With this date closely approaching, now is the time to ensure business compliance.
The Scope of E-Invoicing
The scope of e-invoicing in Romania encompasses all resident businesses as well as non-resident businesses registered for VAT, though there are nuances and differences in the requirements. The Romanian Tax Authority (ANAF) has not implemented any turnover thresholds, meaning all taxpayers must start e-invoicing simultaneously. Small businesses, self-employed individuals, and large enterprises all fall within the scope of mandatory e-invoicing.
The introduction of e-invoicing rules does not change the circumstances under which an invoice must be issued. Instead, it transforms how invoices are issued, received, and archived in certain cases.
Currently, e-invoicing covers domestic B2B transactions and B2G transactions. It does not extend to B2C transactions, exports, or intra-community supplies of goods and services. Taxpayers performing these transactions should continue to issue PDF or paper invoices that comply with Romanian invoicing requirements.
Within the domain of B2B transactions, self-billing and domestic reverse-charge transactions are required to be invoiced electronically. On the other hand, simplified invoices—those with a total amount of less than 100 Euros—are not included under the e-invoicing mandate. These can still be issued in paper or PDF, provided they meet the requirements of the Romanian Fiscal Code.
E-Invoicing Steps: What do businesses need to do to comply?
The Romanian E-Invoicing system (RO E-Factura) operates within the Virtual Private Space (SPV) platform, which facilitates electronic communication between businesses and ANAF.
To begin invoicing electronically, businesses must first register with the SPV using a qualified digital certificate.
Once registered with SPV, taxpayers are required to submit their e-invoices to the SPV in XML format, complying with the European Norm 16931 and RO_CIUS standards. Upon successful transmission, the RO e-Factura system assigns an identification number (număr de identificare) to each XML invoice, which is used as a reference within the SPV system. If an XML invoice meets all technical validations set by ANAF, it receives an electronic seal from the Ministry of Finance. This seal certifies that the invoice has been “cleared” and validated by ANAF.
It is important to note that the rules governing when an invoice must be issued remain unchanged. According to the Romanian Fiscal Code, businesses are required to issue invoices by the 15th day of the month following the taxable event. Additionally, these e-invoices must be transmitted to ANAF within 5 working days. Starting from July 2024, this deadline will shift to 5 calendar days.
The e-invoice exchange process is also subject to regulation. Starting from July 2024, resident businesses are required to receive their e-invoices exclusively through the RO E-Factura system. An e-invoice downloaded from the SPV will be considered the legally and fiscally valid invoice.
Challenges
Access to the SPV is facilitated through a qualified digital certificate or an access token generated using these certificates. Access tokens remain valid for 90 days, and businesses can generate new access tokens using refresh tokens within a 365-day period. To prevent disruptions in issuing e-invoices or missing critical deadlines, businesses must establish clear guidelines for maintaining their qualified digital certificates and managing access and refresh tokens.
E-invoicing regulations require businesses to submit invoice information in a structured form. Businesses must ensure that they have the necessary data in the right format in order to stay compliant. For instance, one critical detail is the buyer’s address information. It is mandatory for businesses to include the buyer’s county information in a structured format. Additionally, if the buyer is located in Bucharest, it is necessary to specify the sector to which the address belongs when submitting e-invoices.
As explained above, Romania's e-invoicing is a centralized exchange model similar to Italy and Poland. Buyers are required to receive e-invoices using the TA system, which creates additional challenges for Accounts Payable processes.
Lastly, keeping pace with the evolving legal and technical requirements is crucial in Romania. The shift in the reporting deadline from 5 working days to 5 calendar days illustrates this need. To ensure compliance, businesses must actively monitor various official websites and stay updated on changes in technical documentation. Updates are typically provided only in Romanian and often without a change log, adding to the complexity of maintaining compliance.
How Can Fonoa Help?
Fonoa e-invoicing provides a comprehensive and indispensable solution for businesses operating in Romania and other countries. Our tailored offering addresses the unique challenges of e-invoicing implementation in Romania. With Fonoa e-invoicing, you can trust that your business will meet regulatory requirements and operate efficiently and effectively in the Romanian market. As your business scales, we are able to provide seamless coverage for new jurisdiction mandates with our single API. Our data validations within the product allow you to be confident in the information you are reporting.
Contact us today to learn more about e-invoicing in Romania.
