VAT registration in Romania: a complete guide for EU companies

For companies, entering a new market offers an interesting prospect, but it also usually brings major difficulties, especially when it comes to negotiating local rules. Obtaining a VAT number and ensuring ongoing compliance can be difficult and time-consuming for EU companies starting up in Romania. From knowing Romanian tax rules to organizing paperwork and dealing with local officials, the process can discourage even the most driven businesses.

"VAT registration in Romania: A Complete Guide for EU Businesses", this guide aims to provide clarity and feasible answers to overcome these obstacles. From the foundations of the Romanian VAT system to thorough application and compliance management procedures, it targets all EU businesses that need knowledge about VAT registration in Romania.

We also introduce House of Companies, a pioneering service provider transforming VAT registration and compliance auditing. House of Companies has become the partner of choice for EU companies seeking to streamline their access to the Romanian market with its innovative e-branch platform and tailor-made solutions. This tutorial not only provides the necessary knowledge, but also highlights how House of Companies can simplify and accelerate the VAT registration procedure so that companies can focus on expansion and development.

Securing your VAT number in the country of the Carpathians

When considering expansion into a new market, it is critical that companies understand the regulatory landscape associated with operating in that region. As a member of the European Union, Romania offers both potential and challenges for international companies looking to grow their business. One of the most critical and sometimes complex steps for foreign companies entering the Romanian market is navigating the Value Added Tax (VAT) registration process. This chapter aims to provide a comprehensive guide on how to obtain a VAT number in Romania, outline the main obstacles faced by foreign companies, and introduce effective strategies to streamline this process.

Unraveling the Romanian VAT system

Romania, as part of the European Union, applies a VAT system that is in line with EU regulations, ensuring consistency between Member States. The standard VAT rate in Romania is 19%, which is comparable to that of several other EU countries. However, Romania also applies reduced VAT rates of 9% and 5% to certain goods and services, such as specific food products, medicines and certain medical services. Understanding which rates apply to your products or services is essential for compliance and financial planning.

For businesses, both national and international, it is essential to understand how VAT functions in Romania to avoid legal complications, fines and operational disruptions. VAT in Romania is an indirect tax that companies collect on behalf of the government when selling goods or services. To operate in Romania, especially as a non-resident company, it is crucial to understand not only the rates, but also the registration process and subsequent compliance obligations.

VAT registration threshold: no obstacles for international companies

An important feature of the Romanian VAT system is that it has no VAT registration threshold for international companies. In contrast, many EU countries only require companies to register for VAT once they reach a specific turnover threshold within a financial year. For example, in some countries, companies only need to register if their annual taxable supplies exceed €100,000.

However, in Romania the rules are different. If you are a non-resident company carrying out taxable activities within Romania, you must register for a VAT number from the first taxable supply you make, regardless of the transaction amount. This means that even if your initial sales in Romania are minimal, you are still required to obtain a VAT registration number to remain compliant with Romanian tax laws. This can be an important consideration for foreign companies planning to enter the market as it means that VAT registration is mandatory from the start of any business activity.

Main requirements for obtaining a Romanian VAT number

Securing one VAT number in Romania involves meeting specific conditions and providing essential documentation. Foreign companies must be prepared to meet the following requirements to successfully complete the registration process:

1. Proof of company registration in the country of origin: Companies must provide official proof of their legal status and business registration from their home country. This may include certificates of incorporation or other relevant documents confirming the legitimate existence and activities of the company.

2. Articles of association or equivalent corporate documents: These documents outline the legal structure and governance of the company. They may contain articles of incorporation, corporate bylaws, or similar documentation describing how the company operates.

3. Evidence of economic activity in Romania: This is essential to demonstrate that the company intends to carry out taxable activities in Romania. Examples include signed contracts, sales invoices, lease agreements, or purchase agreements detailing the company's operations in the country.

4. Identification documents of company directors: The identification documents of the directors or authorized representatives of the company must be presented. This usually means providing copies of valid passports or national identity cards.

5. Proxy: If someone other than a company director handles the VAT registration process on behalf of the company, a power of attorney is required. This document authorizes a person to act on behalf of the company for the specific purpose of completing VAT registration.

6. Romanian bank account details: Although not always mandatory, having a Romanian bank account may be requested by the authorities, especially if the company is involved in transactions within Romania. This helps simplify the tax process and may be necessary for certain types of businesses.

The VAT number application process: a step-by-step explanation

The application procedure for obtaining a VAT number in Romania is carried out through the Romanian National Agency for Fiscal Administration (ANAF). Below is a detailed step-by-step guide to navigating the application process:

1. Submit an application to ANAF: The first step consists of submitting an application form to ANAF. This form must contain detailed information about the company and its intended activities in Romania. The application can be submitted online or through a physical visit to an ANAF office, depending on the company's preference and the options available.

2. Providing all required documentation: The necessary documentation must be submitted with the application. This may include proof of business registration, identification documents, articles of association and proof of economic activity. It is critical to ensure that all documents are complete and properly prepared to avoid delays.

3. Obtain a Romanian tax registration number: Once ANAF has reviewed the application and verified the documentation, the company will receive a Romanian tax registration number. This is an essential step before obtaining the VAT identification number.

4. Receipt of the VAT identification number: The final step in the application process is the issuance of the VAT identification number. This number allows the company to charge VAT on taxable supplies within Romania and to claim VAT on purchases.

The official processing time for VAT applications may vary, but on average takes between 4 and 6 weeks from the date of submission of a complete application. It is worth noting that ANAF may request additional information or clarification during this period, which could extend the timeline.

Ongoing Compliance: Meeting VAT obligations

Once a company has secured its VAT number in Romania, it must continue to comply with ongoing VAT obligations. Compliance is essential to maintain good standing with the tax authorities and avoid potential fines. Key obligations include:

• Submitting periodic VAT returns: Registered businesses must file a monthly VAT return, showing the VAT collected on sales and the VAT paid on purchases. These returns must be filed accurately and on time to avoid fines.

• Maintain accurate records of transactions: Businesses are required to keep thorough and organized records of all transactions, invoices and related financial documents. This data must be kept for a minimum period of 10 years as it may be requested during audits.

• Issuing compliant invoices: Invoices must comply with Romanian standards, including specific details such as the VAT rate, the company's VAT identification number and other required information. This ensures that customers can correctly claim VAT refunds or deductions, if applicable.

• Submit European sales lists (ESL): Companies carrying out intra-EU transactions must submit European sales lists to report these transactions to the Romanian tax authorities. This is necessary to maintain transparency and comply with EU-wide VAT regulations.

• Submit annual listings from Romanian customers: Companies are also required to submit annual statements of their Romanian customers to ANAF. This provides an overview of all transactions carried out with Romanian customers during the year.

To efficiently manage these obligations, companies can use the eBranch portal, an online platform offered by ANAF. The eBranch portal streamlines compliance management by allowing companies to file returns, access tax-related information and maintain documents in digital format. This tool can significantly simplify the process, reduce administrative burden and improve compliance management for foreign companies operating in Romania.

Overcoming the challenges of obtaining a Romanian VAT number

Expanding a business into a new country, especially one with complex regulatory frameworks like Romania, can be difficult for foreign companies. Although the VAT registration process may seem simple in theory, entrepreneurs are often faced with several challenges that can make obtaining a Romanian VAT number much more complicated. This chapter addresses the main pain points that foreign companies experience when navigating the VAT registration process in Romania and explores the practical challenges involved.

Limited support from local tax offices

One of the main obstacles for international companies wishing to register for VAT in Romania is the limited support they receive from local tax authorities. Although Romanian tax offices are generally efficient in handling domestic matters, their capacity to assist foreign companies is often limited. This lack of dedicated support can pose several challenges:

Language barriers: The primary language used in all communications and documentation with the Romanian Tax Authorities is Romanian. For companies that are not fluent in the language, this can be a significant barrier. Misunderstandings due to language differences can lead to errors in submitted documents, missed deadlines and an increased chance of application rejection. Foreign companies that are unwilling to address these language issues often struggle to navigate the process efficiently.

Lack of specialized support for foreign companies: Unlike some EU countries that offer specialized departments or support services for non-resident entities, Romania does not have dedicated teams to assist foreign companies with VAT registration and compliance. As a result, international companies often have to navigate the process independently or rely on external resources. This lack of specialized assistance can make the process seem impersonal and difficult to manage, especially for those unfamiliar with Romanian tax laws.

Inconsistent information: One of the most frustrating challenges is the inconsistency in the information provided by different local tax offices. Different industries may interpret regulations slightly differently, leading to conflicting advice. This inconsistency can cause confusion for companies trying to ensure they meet all legal requirements. When tax offices provide varying answers, companies can make costly mistakes that can delay their VAT registration process or lead to non-compliance issues.

Dependence on expensive local accountants

To mitigate the challenges of limited support from local tax offices, many foreign companies choose to hire local accountants or tax advisors. While this approach can provide much-needed expertise, it also comes with its own challenges:

High costs: Professional services in Romania, such as accounting and tax advice, can be quite expensive. This can be a burden for small and medium-sized enterprises (SMEs) trying to keep initial expansion costs low. The fees charged by accountants with expertise in handling international affairs can be extremely high, making it a significant investment that should be carefully considered.

Limited availability: Qualified accountants who have experience working with international companies are in high demand. Companies may encounter difficulties in finding professionals who have the necessary knowledge and availability to carry out their projects. Even if a company manages to find a suitable accountant, it may have to wait weeks or months before it can begin its VAT registration process, which can delay market entry and lead to missed revenue opportunities.

Potential Conflicts of Interest: In some cases, local accountants may prioritize larger, domestic clients over foreign firms due to the higher profitability of serving established local firms. This can lead to a situation where international customers receive less attention or slower service, impacting the efficiency of their VAT registration and compliance processes.

Navigate the complex bureaucratic processes

The Romanian administrative system, although designed to be systematic and structured, can pose significant challenges for foreign companies unfamiliar with local processes. The complexity of the bureaucratic landscape can create obstacles that slow down the VAT registration process:

Extensive documentation requirements: The documentation required for VAT registration in Romania is extensive and often contains detailed information about the company. Foreign companies must collect and translate various documents, such as proof of registration in their home country, articles of association and proof of economic activity in Romania. This process can be time-consuming, costly and error-prone if not managed carefully.

Multiple contact points: VAT registration in Romania typically involves interactions with various government departments, each with its own procedures and requirements. This can make the process overwhelming for foreign companies unfamiliar with the administrative landscape. Navigating these touchpoints efficiently requires a strategic approach and careful planning, which can be challenging for companies new to the market.

Strict formatting and submission rules: The Romanian authorities have very specific standards for how applications and supporting documentation should be prepared and submitted. Any deviation from these rules may lead to delay or outright rejection of the application. For foreign companies not accustomed to these precise standards, ensuring compliance can be a challenge that requires additional resources and attention to detail.

Time-consuming procedures for applying for VAT numbers

One of the biggest challenges that foreign companies face is the lengthy duration of the VAT registration process. Although the official time for processing a VAT registration application in Romania is 4 to 6 weeks, it often takes longer due to several factors:

Extended processing times: The four to six week period is an ideal timeline, but many companies find that their applications take longer to process. This may be for various reasons, such as incomplete or unclear documentation, backlogs at the Tax Authorities or requests for additional information. These delays can cause significant disruptions for companies planning to start their activities in Romania and may result in them missing opportunities or incurring additional costs.

Back and forth communication: The process of obtaining a VAT number often involves a back-and-forth exchange between the company and the Romanian tax authorities. If additional information is needed or there are discrepancies in the submitted documents, this may extend the timeline even further. Each round of communication can take days or even weeks, increasing delays and affecting the company's ability to begin trading.

Opportunity cost: The time required to complete the VAT registration process can be costly for businesses. While waiting for the VAT number, a company may not be able to fully participate in transactions within Romania, leading to lost sales, slowed growth and potential competitive disadvantages. The longer a company has to wait for its VAT registration, the greater the impact on its overall business strategy and profitability.

Stay informed about regulatory changes

VAT regulations, like other tax laws, are subject to frequent updates and changes. For foreign companies operating in Romania, it can be challenging to keep abreast of these changes:

Difficulty staying informed: Foreign companies may find it difficult to keep abreast of the latest developments in Romanian VAT legislation. These regulations may change based on government policies, EU directives and other factors. Not being aware of regulatory changes can lead to non-compliance, which could lead to fines, penalties or other legal complications.

Risk of non-compliance: Failure to adapt to the new VAT regulations can have serious consequences for a company. Non-compliance can result in fines, sanctions or even the suspension of business operations until the company corrects the problem. This risk makes it critical for companies to have a reliable method to track changes and adapt their processes accordingly.

Resource-intensive monitoring: Monitoring and adapting to new regulatory changes requires significant resources, including dedicated staff time and financial investments. This can divert a company's focus from its core activities, impacting productivity and growth. For many companies, especially SMEs, this allocation of resources can put pressure on their budgets and operations.

Presenting House Of Companies - a complete solution

Navigating the maze of regulatory requirements when expanding into a new market can be a daunting task for foreign companies. Among these complexities, obtaining and managing a VAT number in Romania often stands out as a major hurdle. To help international companies overcome these challenges, House of Companies has designed a comprehensive solution aimed at streamlining the VAT number registration process and simplifying ongoing compliance management. This chapter explores House of Companies' innovative services and introduces their flagship entity management tool: eBranch.

House of Companies: Bridging the Gap for International Companies

House of Companies has established itself as an important partner for companies looking to expand their activities abroad. With a deep understanding of the challenges faced by foreign companies, the company has developed tailor-made solutions to alleviate the challenges associated with market access, regulatory compliance and day-to-day business operations. This is especially true in Romania, where companies often struggle with the nuances of registering and complying with VAT numbers.

Recognizing the need for an easy-to-use and efficient tool, House of Companies developed eBranch – a robust entity management portal specifically designed to address these pain points. With eBranch, companies gain access to a streamlined process that eliminates unnecessary complexity, reduces operational costs and allows them to focus on growth rather than administrative hurdles.

The eBranch portal: simplify the registration and management of VAT numbers

The core of House of Companies' service offering is the eBranch portal. This advanced system is more than just a tool; it is a full-service platform designed to simplify every step of the registration and management of VAT numbers in Romania. Here's how eBranch is tackling the big challenges facing global companies:

1. Centralized support

One of the biggest difficulties foreign companies face is navigating the labyrinth of Romanian tax regulations and the various government departments involved. The eBranch portal acts as a centralized hub for all VAT-related matters, giving businesses a single point of contact for all their queries or support needs. Unlike traditional methods that require coordination between multiple government agencies and third-party service providers, eBranch consolidates these interactions into a seamless process.

Additionally, eBranch offers multilingual support, overcoming one of the most common barriers for foreign businesses: language differences. The portal ensures that all documentation, communication and assistance is available in different languages, allowing non-native speakers to confidently manage their VAT obligations without having to rely solely on local intermediaries.

2. Simplified documentation process

Submitting the correct documentation is essential, but often a complex and error-prone step in the VAT application process. eBranch simplifies this by clearly guiding users through each requirement and providing standardized templates where necessary. This eliminates the risk of submitting incomplete or incorrectly formatted documents, a common reason for application delays or denials.

The platform's structured approach ensures that companies can submit all necessary paperwork in a streamlined manner. This step-by-step guidance is intended to save time and reduce the frustration that often comes with deciphering Romanian bureaucracy.

3. Automated compliance tracking

Complying with VAT regulations in Romania requires constant vigilance due to the constantly evolving nature of tax laws. eBranch's automated compliance calendar ensures companies stay informed of important regulatory changes, upcoming filing deadlines, and necessary action items. This proactive approach minimizes the risk of non-compliance and helps companies avoid potential fines, saving both time and resources.

The automated system is especially useful for foreign companies that may not have the in-house expertise to track VAT changes and compliance dates. eBranch's comprehensive approach to tracking allows these businesses to focus on their core business without worrying about falling behind on their VAT obligations.

4. Cost-effective solution

For many businesses, the cost of hiring local accountants or tax advisors for VAT registration and compliance can be prohibitively high, especially for small and medium-sized enterprises (SMEs). eBranch presents a cost-effective alternative by consolidating multiple services into one affordable package. This approach significantly reduces costs while maintaining high-quality service, making it accessible to businesses of all sizes.

Additionally, the digital nature of eBranch eliminates the need for extensive in-person consultations, travel and additional administrative costs, providing a more streamlined and budget-friendly solution.

5. Time-saving features

Time is priceless for any business, and the intuitive design of the eBranch portal helps save time by reducing the time spent on VAT-related tasks. From filing documents to monitoring compliance, the platform automates and simplifies key processes, allowing companies to spend more time on their strategic goals instead of administrative tasks.

eBranch's streamlined design ensures that tasks such as updating documents, communicating with tax authorities, and managing compliance are handled efficiently, freeing up valuable time for business development and operations.

Virtual office services: improving the eBranch experience

House of Companies recognizes that companies may require additional services to fully integrate their operations in Romania. To meet these needs, eBranch can be supplemented with virtual office services, providing even more support to international companies.

Local representation

A physical business address in Romania is essential for certain types of VAT number registrations and ongoing compliance requirements. House of Companies' virtual office service provides businesses with a professional, local address that can be used for official correspondence and tax purposes. This not only supports VAT registration, but also increases the company's credibility on the Romanian market.

Mail processing and document processing

Official correspondence regarding VAT and regulations can be overwhelming. The virtual office service offers professional mail handling and document processing, so that important communications are not missed and handled correctly. This includes assistance in translating and processing documents received from Romanian authorities, eliminating the need for companies to worry about managing documents in foreign languages.

Contacts with authorities

Navigating interactions with government agencies can be one of the most challenging aspects of compliance management. House of Companies assumes this burden by providing direct communication with the Romanian tax authorities and other relevant authorities. This service ensures that companies can answer all their questions or concerns without having to personally manage complex communications.

The benefits of choosing House of Companies and eBranch

Adopting House of Companies' eBranch solution can be transformative for foreign companies looking to enter and thrive in the Romanian market. Here are some benefits businesses can expect:

Expertise and professionalism

The eBranch team consists of seasoned professionals with extensive knowledge of Romanian VAT regulations and international business practices. By choosing House of Companies, businesses gain access to expert guidance and support so they can navigate the complexities of VAT compliance with confidence.

Efficiency and speed

With its automated processes and intuitive interface, eBranch significantly reduces the time required for VAT number registration and ongoing compliance management. This allows companies to focus their energy on growth and strategy rather than administrative challenges.

Cost-effectiveness

The eBranch portal offers a cost-effective solution compared to traditional methods, making VAT registration and compliance more accessible to companies of different sizes. The elimination of brokerage costs, the costs of hiring local accountants and the time savings all contribute to the affordability of eBranch.

Flexibility and scalability

House of Companies' services are designed to grow with the needs of growing companies. Whether a business needs basic VAT registration or a comprehensive package with virtual office support, the eBranch portal can adapt to different business requirements.

Peace of mind

The assurance that VAT obligations are managed by a team of professionals provides businesses with peace of mind, reducing the risk of expensive fines and non-compliance issues. This allows companies to operate with confidence and maintain a strong reputation in the Romanian market.

Focus on core activities

Outsourcing VAT-related tasks to House of Companies frees up internal resources, allowing companies to focus on their core activities and strategic growth. This not only improves operational efficiency, but also increases productivity and profitability in the long term.

In the coming chapters we will take a closer look at how eBranch facilitates each stage of the VAT number registration and compliance process, providing a step-by-step guide to help businesses fully understand its functionality and benefits.

Comparative analysis of VAT registration in Romania and other EU countries

Here you will find a comprehensive comparative analysis of VAT registration in Romania and other EU countries, presented in five tables.

 VAT registration thresholds

Land	VAT registration threshold	Comments
Romania	EUR 88.500 (RON-equivalent)	Companies below this threshold can opt for voluntary registration.
Germany	22.000 euro	The threshold applies to small companies.
France	85,800 euros (goods); 34,400 euros (services)	Separate thresholds for goods and services.
Italy	No threshold (all companies must register for VAT)	Applies to all companies, regardless of turnover.
Poland	PLN 200,000 (approx. EUR 42,000)	Lower threshold compared to most EU countries.

VAT rates

Land	Standard VAT rate	Reduced rates	Special notes
Romania	19%	9%, 5%	9% for food, medicine; 5% for housing.
Germany	19%	7%	7% for essential goods and cultural services.
France	20%	10%, 5,5%, 2,1%	2.1% for press publications, medicines.
Italy	22%	10%, 5%, 4%	4% for basic needs.
Poland	23%	8%, 5%	Special rates for agricultural products.

VAT registration process

Land	Time to register	Documents required	Availability of electronic filing
Romania	3-5 weeks	Company certificate, financial data, IDs	And
Germany	2-4 weeks	Trade license, bank details, tax number	And
France	2-3 weeks	Proof of company registration, financial data	And
Italy	2-3 weeks	Chamber of Commerce registration, ID, tax codes	And
Poland	4-6 weeks	NIP number, registration forms, bank details	And

 VAT compliance requirements

Land	Submission frequency	Deadlines	Penalties for non-compliance
Romania	Monthly or quarterly	25th of the following month	Fines and possible interest charges.
Germany	Monthly, quarterly or annually	10th of the following month	Penalty surcharge of 1% of unpaid VAT.
France	Monthly or quarterly	19th of the following month	Fines of up to 1,500 euros for incorrect declaration.
Italy	Quarterly	16th of the following quarter	Significant penalties for late or incorrect filing.
Poland	Monthly or quarterly	25th of the following month	Fines and interest on overdue VAT.

VAT refund procedures

Land	Refund Request Timeline	Refund processing time	Special requirements
Romania	Within 5 years of release	90 the day	Submitting VAT invoices and receipts.
Germany	Within 6 months after the end of the year	2-3 months	Requires detailed documentation.
France	Quarterly or annually	3 months	Must meet the reimbursement threshold (€760).
Italy	Annual	6-9 months	Mandatory digital archiving.
Poland	Quarterly or annually	60-180 a day	Local tax authority audits may apply.

Conclusion

VAT registration and compliance are crucial for EU companies entering Romania, but often difficult. Romanian tax rules and local government issues can be tricky. The right direction and tools can make these problems bearable.

House of Companies' eBranch platform, which centralizes VAT registration and compliance, is creative and cost-effective. House of Companies helps businesses manage Romanian VAT requirements by reducing documentation, automating compliance tracking, and providing expert support.

For small companies entering Romania for the first time or for large entities looking to optimize compliance activities, House of Companies makes VAT registration easy. House of Companies helps organizations focus on their core activities and growth objectives, while saving time and resources.

The insights and solutions in this guide will give EU companies the confidence to enter the Romanian market with the tools and help they need.