Update: On March 22nd 2024, the Romanian government published an Emergency Ordinance indicating that the deadline of the grace period for B2B e-Invoicing Phase 1 (e-Reporting) will be moved from March 31st to May 31st, “to allow taxpayers extra time to continue adapting their procedures and systems for the transmission of invoices in the national RO e-factura platform”. Additionally, the Emergency Ordinance seeks to better describe the system of penalization in case of non-compliance (levying a penalty for the act of non-compliance itself, rather than for each non-reported invoice).
In 2020 Romania announced that it would be introducing both SAF-T-Reporting (ANAF) 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 SAF-T (part 1) and E-Invoicing (part 2) obligations: who should comply, what deadlines are applicable, and what information should be provided? Moreover, we will give you the rundown on SAP’s solutions for compliance with the different legal requirements, and how PIKON can assist you when implementing them.
SAF-T Romania
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.
What does SAF-T Romania entail?
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.
The monthly SAF-T report each time needs to be submitted before the end of the month following the reporting period. The annual asset report’s deadline equals the deadline for submitting the company’s annual financial statements. Lastly the stock report’s deadline is variable, and will be communicated by ANAF alongside the filing request.
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 January 2022), then companies considered large taxpayers since 2022 (July 2022), medium taxpayers (January 2023) and finally small taxpayers and non-resident taxpayers with a Romanian VAT registration (January 2025).
Non-resident taxpayers with a VAT registration in Romania only need to submit a simplified SAF-T report, including solely the purchases and sales carried out through their Romanian VAT identification number.
What SAP solution is foreseen?
The Romanian government (ANAF) has foreseen a tool for validating XML files against the mandatory SAF-T format, and for creating a PDF file based on the XML content: DUKIntegrator. Those to whom the SAF-T requirements apply, are nevertheless left to their own devices for generating the XML files themselves.
Therefore, SAP has foreseen a solution for all three SAF-T Romania reports. All solutions are part of SAP Document & Reporting Compliance, an 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). The standard SAP solution will allow you to generate your SAF-T reports automatically, based on source information in your system. Moreover, all reports will be stored in one place, a central eDocument Cockpit (for ECC systems) or dedicated periodic reporting app in Fiori (for S/4HANA systems).
e-Factura Romania
Following in the footsteps of many of its European brethren, Romania first kicked off its journey in e-invoicing and e-accounting back in 2020. While the same year saw both e-invoicing and SAF-T requirements being announced, SAF-T is already an established concept in the Eastern European country by now. The e-invoicing requirements in Romania (also known as ‘e-Factura’) were only fully fleshed out by the end of 2023, and are currently still being rolled out for B2B transactions.
What does e-Factura Romania entail?
Originally targeted at B2G requirements, the Romanian government (ANAF) ordained that starting July 2022, all invoices to public administrations had to be submitted to their central electronic invoicing system, ‘RO e-Factura’. Upon receipt in RO e-Factura, the invoice will first be verified, and only in case of a successful validation will it be signed electronically by the Ministry of Finance and be considered a valid invoice. The invoice recipient will subsequently be able to access and download the invoice from the RO e-Factura portal, where it will be stored for the next sixty days.
Also in July 2022, the Romanian government announced that a subset of B2B transactions (between private companies) would need to be reported to the central RO e-Factura system (Emergency Ordinance no. 12/2022). More specifically, all B2B suppliers of products with a high risk of tax fraud and tax evasion were mandated to send their invoices to RO e-Factura electronically. The list of ‘high risk products’ was published and maintained by the Romanian government (ANAF) on a regular basis. As not all Romanian businesses were required to be enrolled in the RO e-Factura system, any suppliers of whom the customer could not receive the invoice electronically, were still obliged to provide it outside of the e-Factura platform as well.
The B2B e-Factura requirements fully kicked in gear starting January 2024. Allowing for a grace period until April 2024, all domestic invoices by both established and non-established, Romanian VAT-registered taxpayers have to be reported to the e-Factura system in near-real time (i.e. within five days of the taxable event). The scope of the requirements nevertheless excludes exports and intra-community transactions. 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 5,000 to 10,000 RON (approximately 1,000 to 2,000 EUR), while other taxpayers could incur fines between 500 and 2,500 RON (100 to 500 EUR) if they do not fulfill their legal obligations.
In a second phase (starting July 2024), this “B2B reporting” requirement will be fully expanded to “actual e-invoicing”, by imposing the electronic transmission of invoices on both sender (required electronic submission) and receiver (required electronic receipt or download from the e-Factura platform). For invoicing purposes, the only allowed format will be an electronic one. Contrary to the ‘first reporting phase’, the escalation of the requirements will only pertain to those who have a permanent establishment in Romania.
Romania’s authorization for levying B2B e-invoicing requirements, as obtained from the European Commission (EC), is valid for a three-year period (i.e. until December 2026, or until the European Union decides to adopt the ViDA proposal).
Concerning B2C transactions (between business and end-user), only those performed by “companies operating in tourism and accepting vacation vouchers” will fall into the scope of RO e-Factura (since April 2022).
The chosen electronic invoicing standard is RO_CIUS, a variant of the UBL XML format. The same standard will apply to all transactions (B2G, B2B, B2C). An archiving obligation of 10 years is effective.
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.
As described in the section above, e-invoicing requirements apply to:
- All B2G transactions (since July 2022)
- B2B suppliers who deal in so-called ‘high fiscal risk products’ (since July 2022)
- All B2B transactions by both established and non-established, Romanian VAT-registered taxpayers (near-real time reporting requirement since January 2024, grace period until April 2024)
- All B2B transactions by established VAT-registered Romanian taxpayers (end-to-end e-invoicing requirement since July 2024)
What SAP solution can be expected?
SAP is covering the Romanian e-invoicing requirements as part of its SAP Document and Reporting Compliance, Cloud Edition license (see also SAP Document & Reporting Compliance). SAP DRC is an integrated solution that 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). In the SAP DRC solution (also known as the SAP eDocument Solution), compliance with the E-Factura regulations will be established via the following process steps:
- You create an RO e-Factura relevant invoice in your SAP ECC or SAP S/4HANA system (via the FI or SD module).
- The release of this invoice to accounting will automatically trigger the creation of an SAP eDocument in a centralized environment, the SAP eDocument Cockpit.
- This eDocument will be transformed into the required RO_CIUS format upon XML display or submission to the RO e-Factura platform.
- The e-invoice is transmitted in the correct XML format to the RO e-Factura platform. This connection will be established via ‘SAP DRC Cloud’.
- Upon receipt, the Ministry of Finance will verify the e-invoice, and will either approve or reject it. Both positive and negative responses will reach the SAP system via the SAP DRC Cloud connection, and will be visualized in the eDocument Cockpit. You will therefore be able to use the Cockpit to monitor all e-invoicing related actions.
Conversely, your SAP DRC Cloud connection to the RO e-Factura platform will also allow you to pull any incoming vendor invoices from the platform into your SAP eDocument Cockpit, for further review and follow-up.
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.
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