The Ministry of Finance in Romania has announced a significant step in the fight against tax evasion. Starting from January 1, 2025, electronic invoicing for business-to-consumer (B2C) transactions will become mandatory.
This move is part of a broader legislative act that introduces several key amendments and additions.
Expansion of the National Electronic Invoicing System (E-Factura)
From July 1, 2024, businesses can choose to use the RO e-Invoice system for B2C transactions. However, by January 1, 2025, the adoption of this system becomes mandatory. This initiative requires all businesses issuing consumer invoices to report them via the RO e-Invoice system (E-Factura).
Minister Marcel Bolos emphasized that this step aligns with ongoing EU discussions on standardized electronic invoicing for both B2B and B2C transactions. He noted that this measure is crucial for the digitalization efforts of ANAF – National Agency for Fiscal Administration (Romanian: Agenția Națională de Administrare Fiscală), ensuring accurate economic operation reporting and bolstering efforts against tax evasion.
Romania Against Tax Evasion: Exemptions and Extensions
Certain entities are exempt from the mandatory use of the RO e-Invoice system. These include businesses issuing non-VAT-related invoices, as defined by the Fiscal Code, and entities such as diplomatic missions, EU bodies, and NATO forces, unless they opt into the system.
Additionally, associations, foundations, and individual farmers under a special regime are exempt until June 30, 2025, but they can adopt the system earlier if desired.
Enforcement Measures
If beneficiaries do not receive invoices through the RO e-Invoice system for goods or services paid at delivery, they can notify the tax authorities. Furthermore, enforcement bodies, including bailiffs and the National Agency for the Administration of Seized Assets, must use the RO e-Invoice system when issuing invoices on behalf of suppliers required to report through the system.
Romania Against Tax Evasion: Updates to Electronic Fiscal Cash Registers
Amendments to GEO No. 28/1999 will see tax receipts include the tax identification code instead of the VAT registration code of the beneficiary. Receipts must also display the date and time of issuance, receipt identification number, and the fiscal cash register’s tax series in a QR code format, enabling automated data verification to combat tax evasion.
If QR code implementation faces technical challenges, compliance is extended to two years post-ordinance enforcement.
Excise Duties Exclusion from Budgetary Restructuring
The government has amended Ordinance No. 6/2019, which concerns tax facilities, to exclude excise duties from the budgetary restructuring procedure. This action guarantees that buyers declare and pay excise taxes, which are charges on consumption, directly to the state budget without any restructuring. This supports taxpayers who comply with the rules.
Generally, this move by the Ministry of Finance is a significant step towards modernizing Romania’s tax system and combating tax evasion. It will be interesting to see how these changes impact businesses and consumers in the coming years.
Romania Against Tax Evasion: Concerns Over Data and Infrastructure
The Organization of Women Entrepreneurs within the General Union of Industrialists in Romania (OFA UGIR) has called on the government to repeal the emergency ordinances 69/2024 and 70/2024. These ordinances, endorsed on June 21, 2024, mandate the implementation of an e-Invoice mechanism for B2C deliveries and an e-VAT mechanism.
Firstly, OFA UGIR points out that GEO 69 and GEO 70 were approved without public consultation and that they will produce significant negative effects on the Romanian economy. Fiscal consultant Loredana Mihăilă claims that, in the case of e-Invoice on the B2C relationship, this measure obliges the detailed reporting of purchases made by citizens, including online purchases and purchases of durable goods.
Further, the e-Invoice mechanism for B2C deliveries involves a massive amount of data and requires a seamless functioning of the relevant digital infrastructure. However, OFA UGIR raises a question of issues related to the regime of personal data and possible fraudulent access to sensitive data or leaking of data from the government’s databases.
Furthermore, as per OFA UGIR, it remains unclear why a government that can master such a sophisticated system would not be able to implement progressive taxation – a measure frequently rejected by authorities as unrealistic due to rudimentary digital infrastructure.
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