Important update:
The Romanian Ministry of Finance has released a Draft Bill that mandates the use of electronic invoices and reporting through the RO e-Factura system starting on January 1, 2024. However, companies will have a grace period of three months, running from January 1, 2024, to March 31, 2024, to comply with this regulation. Following the conclusion of the grace period, beginning April 1, 2024, penalties may be imposed on non-compliant businesses.
Large taxpayers may face fines ranging from RON 5,000 to 10,000 (approximately EUR 1,000 to 2,000), while other taxpayers could incur fines between 500 and 2,500 (EUR 100 to 500) if they do not fulfill their obligation to issue electronic invoices through the RO e-Invoice system. Romania has secured authorization from the European Commission (EC) to deviate from Articles 178, 218, and 232 of the VAT Directive 2006/112/EC. This authorization is valid for a three-year period, running from January 2024 to December 2026, or until the European Union decides to adopt the ViDA proposal.
In 2020 Romania announced that it would be introducing both SAF-T and E-Invoicing regulations. Through these mandatory transmissions of tax and accounting information, Romania aspires to establish more transparency and efficiency in its crusade against tax evasion. Romania’s VAT Gap has been a longstanding tribulation of the Eastern-European country. Commonly commanding the European Commission’s annual VAT Gap report, 2019 even found the country snatching the number one position in its ranking of countries suffering the largest gaps.
This blog post will provide more information on Romania’s E-Accounting and E-Invoicing obligations: who should comply, what deadlines are applicable, and what information should be provided? Moreover, we will give you the rundown on SAP’s solution for compliance.
SAF-T Romania
What does SAF-T Romania entail?
Standard Audit File for Tax (commonly abbreviated to SAF-T) is the OECD’s standard for the electronic exchange of accounting data between organisations and their government. First emerging in Portugal, SAF-T has since taken root in a manifold of countries, which now includes Romania. Romania’s variant of the SAF-T format is called ‘Informative Declaration D406’ or simply D406.
Specifically for Romania, the SAF-T requirements include a monthly or quarterly report, an annual report, and a report delivered solely at the request of the Romanian tax authority. The first report’s frequency depends on the company’s bookkeeping method and covers, among other things, its general ledger accounts and entries, customers, suppliers, products and tax information. The annual report should, for instance, detail the general ledger accounts and asset transactions. The third or ‘stock information’ report should include data on the company’s products, physical stock, and movement types.
SAF-T reports should be supplied to the ANAF, the Romanian tax authority, as PDF files with an attached XML file.
Who should comply with SAF-T Romania?
The SAF-T requirements will be imposed on all Romanian companies and all foreign entities with a presence in Romania. The implementation will nonetheless occur in stages, first targeting large taxpayers (compulsory starting March 2022), then companies considered large taxpayers since 2022 (July 2022), medium taxpayers (January 2023) and finally small taxpayers (January 2025).
e-Factura Romania
What does e-Factura Romania entail?
Also, in 2020, Romania made its first steps towards a national system of electronic invoicing, called ‘RO e-Factura’. Originally targeted at B2G transactions, the initial pilot programs were predominantly based on Italy’s E-Invoicing model. More specifically, according to RO e-Factura requirements, invoices converted to a pre-defined XML format should be issued to the central RO e-Factura system.
Here, the invoices will be verified and validated, and in case of success, they will be signed electronically by the Ministry of Finance. In case of errors, the invoice will need to be corrected and resubmitted. Next, the recipient of the invoice will be able to access and download the invoice via a portal, API or app. After sixty days, the invoice will be archived.
The B2G E-Invoicing model laid the foundation for the extension of the platform for further developments, e.g. toward B2B E-Invoicing. Concerning the latter, taxpayers can expect the same requirements to apply as for B2G E-Invoicing. However, various aspects still require clarification, such as the authentication and access process.
Who should comply with e-Factura Romania?
At the outset, any implementation of RO e-Factura was purely voluntarily. Participants solely had to be entered in the right Registers. An Emergency Ordinance in January 2022 nonetheless made the application compulsory for a selection of B2B suppliers who deal in so-called ‘high fiscal risk products’. A list of these products, which include vegetables, alcoholic beverages and clothing, was drawn up by the ANAF and will be updated frequently.
At the start of 2023, the Romanian government nonetheless announced a ‘Big Bang’ implementation of the B2B eInvoicing requirement across all Romanian companies. Instead of a phased approach, the cutoff for all entities in the country is expected for 2024.
What SAP solution can be expected?
SAP has foreseen a solution for all three SAF-T Romania reports and Romania e-Factura. All solutions are part of SAP Document & Reporting Compliance, an overall, integrated SAP solution which strives for long-term end-to-end compliance with various country-specific legal requirements all over the world (e.g. SII Spain, SDI Italy, CFDI Mexico, RTIR and EKAER Hungary). With SAP Document & Reporting Compliance, statutory reports such as SAF-T Romania and eDocuments such as e-Factura RO will automatically be generated from source information in your system, and can be kept track off in respectively the ‘Run Compliance Reports’ app and the SAP eDocument Cockpit.
How PIKON can help you
With our Competence Center for Legal Requirements, we are a strategic partner who ensures that your SAP system and business processes meet different country-specific legal requirements all over the world in the long run. We have a team of experts that combine SAP expertise and in-depth knowledge of the end-to-end legal process and technical requirements of the Romanian and many other E-Invoicing and E-Accounting regulations. We have gathered this experience through our many SAP Document & Reporting Compliance and local implementation projects all around the world. Some examples are SDI in Italy, SII in Spain, CFDI and Complemento de Pago in Mexico, RTIR and EKAER in Hungary, XRechnung in Germany, the different legal requirements in Turkey, etc. We have also developed our own compliance SAP Add-Ons e.g. MTD VAT in the UK and the VAT Whitelist in Poland. Furthermore, we always keep an eye on new and changing legal requirements and inform our customers when action is needed. This ensures that your company doesn’t need to follow up on all the legal requirements yourselves, and you can concentrate on your daily business.