Romanian VAT payers include local companies, as well as non-resident companies registered for VAT purposes in Romania, either directly, in the case of EU companies, or through a fiscal representative, in the case of non-EU companies (non-EU companies are obliged to register for VAT purposes through a fiscal representative).
A Romanian VAT payer will submit to the tax authorities the following VAT returns:
The VAT registration procedure is simplified for non-resident companies which intend to register for VAT purposes in Romania, compared with local companies. Although both procedures require the provision to the tax authorities of documents justifying the intention to perform an economic activity in Romania, we consider it of interest to present the VAT registration procedure for local companies, as such procedure is burdensome or even arbitrary.
The Romanian tax authorities want to fight against VAT fraud through a rigid VAT registration procedure applicable to Romanian companies. Thus, the tax authorities analyze various topics, allocate negative points for each topic (the exact scoring is not public) and compute the overall scoring by adding 100 points to the sum of the allocated points. If the overall scoring is below 51 points (hence, the negative aspects prevail), the fiscal risk is high and the VAT registration is rejected.
Having considered the above, we present below some aspects which should be avoided by Romanian companies registering for VAT purposes (the below examples are not exhaustive).
Consequently, if a Romanian company does not have employees, has a foreign individual as administrator, has a minimum share capital and headquarters in the premises of a service provider, its VAT registration process is not straightforward, even if the new company has a serious business plan.
Fortunately, Romanian branches of foreign companies/EU companies registering directly for VAT purposes in Romania are not subject to the above VAT risk analysis.
The Global VAT Newsletter focuses on changes in compliance duties in various EU and non-EU countries
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