How the Prefilled VAT Return Works
The Romanian Tax Authorities (RTA) have enacted new legislation introducing prefilled VAT returns. Under the new RO e-VAT system, the RTA will gather information from various sources to prepopulate VAT returns and send them to VAT-registered taxable persons. These individuals must verify the provided return against their own records. Any significant discrepancy (a deviation of at least 20% but not less than RON 1,000) must be reported and explained to the tax authorities through separate notes attached to the VAT return. The system is set to launch on 1 August 2024.
Detailed Overview
The RTA’s new system will collect information from the following sources:
- e-Invoicing System: Requires electronic invoices to be sent to the RTA.
- SAF-T Statement: Involves detailed reporting of most transactions.
- e-Cash Registers: All cash registers must report their information.
- e-Transport System: Information on transported goods must be provided to the RTA.
- Customs Information System
- e-Seal
- Other Information Systems of the Ministry of Finance
The prefilled VAT return provided by the RTA does NOT replace the traditional VAT return. VAT-registered persons must still submit their VAT returns through the usual process. The prefilled return is a tool to help the tax office verify the information they have on record and identify any discrepancies.
Timeline and Process
The prefilled VAT return will be available five days before the VAT return deadline, which is the 20th of the month following the end of the reporting period. Taxpayers are expected to reconcile the prefilled data with their records. By the 5th of the month following the VAT return deadline, the RTA will contact any taxpayers where material discrepancies are detected between the prefilled return and the submitted VAT return. Taxpayers will have 10 days to explain these differences.
For instance, the VAT return for August 2024 must be filed by 25 September 2024. On 20 September 2024, the taxpayer will receive the prefilled VAT return and will have five days to reconcile any differences. By 5 October 2024, the RTA should contact the taxpayer if any material discrepancies are found. The taxpayer then has 10 days to respond.
Compliance and Penalties
A material difference is defined as a discrepancy of at least 20% but not less than RON 1,000. Non-compliance with the requirement to file explanatory notes will result in fines ranging from RON 2,000 to RON 10,000 and will be considered a criminal offense.
Implementation and Grace Period
The system will go live on 1 August 2024 and will apply to transactions starting 1 July 2024. It is anticipated that no fines will be imposed until 1 January 2025, as the system will still be undergoing calibration and adjustments.
The introduction of prefilled VAT returns by the Romanian Tax Authorities marks a significant step towards enhancing tax compliance and efficiency. Taxable persons must stay informed and prepare for these changes to ensure seamless adaptation and compliance with the new system.
