What is a VAT refund?

A value added tax (VAT) refund is when VAT is reimbursed to companies at their request, when the amounts obtained from sales are smaller than the amounts obtained from purchases. Companies may claim a VAT refund when the deductible VAT is higher than the VAT collected. A VAT refund may be obtained from the State budget by filing either VAT return 300 or VAT return 318 (EU VAT refunds).

In Romania, VAT refunds are regulated by Law No 227/2015 of the Fiscal Code, as updated and amended.

How is the amount of VAT to be refunded calculated?

The amount of VAT to be refunded is calculated by determining the amounts resulting from taxes relating to purchases made by a taxable person and taxes collected for taxable transactions.

Who can claim a VAT refund?

Any taxable person registered for VAT purposes pursuant to Article 316 of the Fiscal Code may claim a VAT refund on a quarterly or monthly basis if there are negative amounts to be reimbursed.

This option can be selected in the VAT return, Form 300, which is also a request for reimbursement.

Taxable persons may claim a VAT refund in respect of the following categories of goods and services purchased:

• fuel;
• hiring of transport;
• road tolls and road user charges;
• travel expenses (taxi or public transport fares), accommodation, food, drink and restaurant services, admission to fairs and exhibitions, expenditure on luxuries, amusements and entertainment.

Non-taxable companies or companies having negative amounts below RON 5 000 cannot claim a VAT refund.

When is VAT reimbursed?

VAT is reimbursed, as a rule, within 45 or 90 days if the settlement of the VAT return also entails an advance check. The initial time limit may be extended for a period of 2 to 6 months if further evidence is required in order to decide on a request. During this period, the taxpayer cannot claim interest for the late VAT refund.

Taxpayers may check the status of the request for reimbursement and VAT returns on the ANAF website.

Value added tax (VAT) is a general tax applicable to all economic activities involving the production and distribution of goods and services. This tax is borne by the final consumer of the respective good/service and is received cumulatively by each economic operator participating in the economic cycle of the development of a product or provision of a service subject to taxation. After exercising the right of deduction, taxable economic operators who participated in the economic cycle transfer the amount of the VAT balance to the State budget.

Pursuant to Article 316(1)(a) or (c) of the Fiscal Code, registration for VAT purposes of companies having a business established in Romania in accordance with Law No 31/1990 on companies, as subsequently amended and supplemented, is carried out before commencing the economic activity:

• if they declare that they expect to achieve a turnover reaching or exceeding the exemption threshold of RON 300 000;
• if they declare that they expect to achieve a turnover below the exemption threshold of RON 300 000, but opt to follow the normal tax arrangements;

(RON 300 000 is the threshold turnover for the application of the special exemption scheme for small undertakings and is defined in Article 310(2) of the Fiscal Code and in the implementing rules published in the application of this article).

In these cases, on the same day that they submit to the Trade Register Office the application for registration in the Trade Register, companies submit to the fiscal body the application for registration for VAT purposes (Form 098).

In accordance with Order No 631/2016 of ANAF, applications are submitted by the applicant, as the legal representative of the company for which registration for VAT purposes is being requested, by an associate thereof or another person empowered by law, to the registry of the competent fiscal body or by registered letter.

In accordance with Article 316(1)(c) of the Fiscal Code, companies can apply for registration for VAT purposes after they commence their economic activity if their turnover during a calendar year is lower than the exemption threshold of RON 300 000, but they opt to follow the normal tax arrangements. In this case, companies submit the statement of particulars for legal persons, associations and other entities without legal personality (Form 010) to the competent fiscal bodies.

In accordance with Order No 3725/2017 of ANAF, the statement is submitted either directly (by the legal representative) or by an agent to the registry of the competent fiscal body or by registered letter.

After a company has submitted the application for registration for VAT purposes, (Form 098 or 010, where applicable), as described above, the fiscal body will issue a decision on VAT registration and registration will be deemed to be valid from the date of notification of that decision (Order No 521/2016 of ANAF).

With effect from 14 May 2020, the date of entry into force of Government Emergency Order No 69/2020 amending and supplementing Law No 227/2015 on the Fiscal Code and establishing certain fiscal measures, companies applying for registration for VAT purposes, in the cases referred to above, are no longer subject to an assessment, for registration purposes, based on the tax risk assessment criteria (the fiscal body conducts risk assessments on a later date, in the course of business and for those posing a high tax risk, they cancel the VAT registration number).

Taxable persons who apply for registration for VAT purposes by option after commencing their economic activity, more specifically persons who apply for registration after exceeding the exemption threshold, within the legal time limit (10 days from the date when that threshold has been reached or exceeded), are entitled to adjustment of VAT.

These persons are entitled to the adjustment of the deductible tax in respect of:

• goods in stock, unused services and fixed tangible assets in progress, ascertained as per the inventory, at the time of transition to the normal tax arrangements pursuant to Article 304 of the Fiscal Code;
• capital goods for which the deduction adjustment period has not expired and which are owned by the taxable person concerned at the time of transition to the normal tax arrangements pursuant to Article 305 of the Fiscal Code;

Capital goods are all fixed tangible assets, including the transformation or refurbishment of immovable property or parts thereof, excluding repairs or maintenance work on them, even when such operations are performed by the beneficiary of a rental contract, leasing or any other type of contract under which immovable property or parts thereof is/are made available to another person, provided that the value of each transformation or refurbishment is at least 20% of the value of that immovable property or part thereof after transformation/refurbishment. Immovable property is deemed to be capital goods regardless of whether it is recorded as inventories or tangible assets in the accounts of taxable persons.

Fixed tangible assets are any depreciable tangible assets, i.e. buildings and lands of any kind, which are held in order to be used for the production or supply of goods, or the provision of services, to be hired out to third parties or for administrative purposes.

• Fixed tangible assets that were not considered capital goods until 31 December 2015, which were manufactured or purchased by 1 January 2016 and which are not fully depreciated on transition to the normal tax arrangements pursuant to Article 306 of the Fiscal Code;
• Purchases of goods and services that are to be obtained, namely for which tax has become chargeable pursuant to Article 282(2)(a) and (b) of the Fiscal Code before the date of transition to the normal tax arrangements and in respect of which the chargeable event, namely the supply/provision, occurs after that date.

Pursuant to Article 305(1)(a) and Article 266(3)(1) of the Fiscal Code, and point 83(11) to (14) of the implementing rules for Law No 227/2015 on the fiscal code, invoices for the purchase of goods/services supplied/provided before the taxable person concerned has registered for VAT purposes do not have to include the statement that the VAT registration number is assigned to the taxable person concerned pursuant to Article 316 of the Fiscal Code.

Adjustments are recorded in the first VAT return submitted after registration for VAT purposes or, where applicable, in a subsequent return.

Information on the ex officio cancellation of the VAT number and on registration for VAT purposes after the ex officio cancellation of the VAT number can be found here.

You can find information in the Fiscal Code (Title VII, Chapter VII) on how undertakings should calculate their taxable amount for the VAT.

The VAT rates in force in Romania are applied and calculated in accordance with Article 291 of the Fiscal Code.

VAT exemptions are applied in accordance with Title VII, Chapter IX of the Fiscal Code.

Registration of taxable persons for VAT purposes

Taxable persons established in Romania

Taxable persons who have an established business in Romania and carry out or intend to carry out an economic activity involving taxable transactions exempted from value added tax and eligible for deduction and/or transactions resulting from economic activities for which the place of supply/provision is deemed to be abroad, if the VAT was deductible, where such transactions would be performed in Romania pursuant to Article 297(4) (b) and (d), must apply for registration for VAT purposes to the competent fiscal body, as follows.

• Before performing such transactions, in the following cases:

- if they declare that they are going to achieve a turnover reaching or exceeding the exemption threshold specified in Article 310(1) regarding the special exemption arrangements for small undertakings;

- if they declare that they are going to achieve a turnover below the exemption threshold specified in Article 310(1), but they opt to follow the normal tax arrangements;

• if during a calendar year they reach or exceed the exemption threshold specified in Article 310(1), within 10 days from the end of the month in which they reached or exceeded this threshold;
• if the turnover during a calendar year is lower than the exemption threshold of RON 300 000, but they opt to follow the normal tax arrangements;
• if they perform transactions exempted from VAT and opt for their taxation

Taxable persons established outside Romania

Taxable persons with a place of business established outside Romania but with a fixed establishment in Romania pursuant to Article 266(2)(b) must apply for registration for VAT purposes in Romania, as follows.

• Before receiving services, where they are to receive, for their fixed establishment in Romania, services subject to VAT in Romania pursuant to Article 207(2) if the services are provided by a taxable person established in another Member State for the purposes of Article 266(2);
• before providing services, where they are to provide the services listed in Article 278(2) from their fixed establishment in Romania for a beneficiary who is a taxable person established in another Member State, within the meaning of Article 266(2), and is subject to VAT in another Member State according to the equivalent of Article 307(2) in the legislation of that Member State;
• before they carry out certain economic activities from their respective fixed establishment under the conditions laid down in Article 266(2)(b) and (c).

Taxable persons not established in Romania

Taxable persons not established in Romania pursuant to Article 266(2) and not registered for VAT purposes in Romania may apply for registration for VAT purposes if they carry out any of the following transactions in Romania:

• importation of goods;
• transactions listed in Article 292(2)(e), if they opt for the taxation thereof pursuant to Article 292(3);
• transactions listed in Article 292(2)(f) if they are taxable by law or by option pursuant to Article 292(3).

Taxable persons established in the European Union but not in Romania

Taxable persons established in the European Union but not in Romania, who are required to register for VAT purposes in Romania, may, under the conditions of the implementing rules, fulfil that obligation by appointing a tax representative. Taxable persons established in the European Union who are required to register for VAT purposes in Romania, must, under the conditions of the implementing rules, do so by appointing a tax representative.

Deregistering a person for VAT purposes

The competent fiscal bodies will cancel the registration of a person for VAT purposes:

• if that person has been declared inactive in accordance with the provisions of the Code of Fiscal Procedure, from the date they declared they were inactive;
• if the associates/administrators of the taxable person or the taxable person himself are listed in the fiscal record with criminal offences and/or acts set out in Article 4(4)(a) of Government Order No 39/2015 on the fiscal record, from the date when the deregistration decision has been served by the competent fiscal bodies. On an exceptional basis, for companies regulated under Law No 31/1990, republished, as subsequently amended and supplemented, a decision is made to deregister the person concerned for VAT purposes;
• if a VAT return, as provided for in Article 323, has not been submitted for 6 consecutive months, for persons whose tax period is the calendar month, and for two consecutive calendar quarters;
• if the VAT returns submitted for 6 consecutive months, for taxable persons whose tax period is the calendar month, and for two consecutive calendar quarters, for taxable persons whose tax period is the calendar quarter, do not include purchases of goods/services or supplies of goods/provisions of services carried out in those reporting periods, the competent fiscal bodies will proceed to cancel registration for VAT purposes on the first day of the month following that on which the deadline for submission of the sixth VAT return falls, in the first case, and on the first day of the month following that on which the deadline for submission of the second statement of account falls, in the second case;
• when the taxable person was neither under the obligation nor entitled to apply for registration for VAT purposes;
• for taxable persons applying for deregistration for VAT purposes in order to apply the special exemption scheme referred to in Article 310 or the special scheme for farmers referred to in Article 315^1;
• if a taxable person, as a company having an established business in Romania set up under Law No 31/1990, republished, as subsequently amended and supplemented, which is subject to registration in the trade register, poses a high tax risk.

Payment of VAT

The person liable to pay the VAT is the taxable person who carries out supplies of goods or provisions of services.