Create Invoice for Romania

To comply with Romanian law, businesses must adhere to specific legal requirements for invoicing, including mandatory tax identification numbers and strict VAT compliance. Romania, as an EU member state, aligns its VAT system with the EU VAT Directive. The National Agency for Fiscal Administration (ANAF) administers VAT and oversees compliance.

A crucial aspect of Romanian invoicing is the tax identification number. For Romanian entities, this is typically the CIF (Cod de Identificare Fiscală) or CUI (Cod Unic de Înregistrare), which is their VAT registration code. Non-established businesses undertaking taxable transactions in Romania must also obtain a valid Romanian VAT number, regardless of turnover, while resident businesses must register once their annual turnover exceeds RON 300,000 (approximately €60,000).

Regarding VAT compliance and breakdown requirements, the standard VAT rate in Romania is currently 19%, with reduced rates of 9% and 5% applying to specific goods and services like food, pharmaceuticals, and hotel accommodation. However, it's important to note that from August 1, 2025, the standard VAT rate is set to increase to 21%, and the reduced rates of 5% and 9% will be merged into a single reduced rate of 11%. Invoices must clearly state the VAT rate applied, the VAT amount payable, and a breakdown by VAT rate or exemption. If a VAT exemption is applied, a reference to the relevant regulation must be included.

Properly formatting invoices for Romanian clients is critical for clarity and compliance, ensuring all mandatory elements are present and common pitfalls are avoided. Romanian law, specifically Article 319(20) of the Fiscal Code (Law 227/2015), outlines the essential information that must be included on all invoices.

• Full business name, address, and VAT ID of both the supplier and the recipient. If either party is not established in Romania, the name, address, and VAT ID of their fiscal representative must be included.
• Issue date of the invoice.
• Date when the goods or services were supplied or rendered, or the date an advance payment was made.
• Unique sequential number that identifies the invoice.
• Type and quantity of goods supplied or services rendered.
• Amount of goods supplied or services rendered.
• VAT rate applied.
• VAT amount payable, along with any advance payments received.
• VAT amount payable breakdown either by VAT rate or exemption.
• Total amount payable.
• If a VAT exemption is applied, a reference to the related regulation stating the supply is VAT exempt.
• If the recipient is liable to pay VAT (e.g., under a reverse charge mechanism), a statement referring to "reverse charge" must be present.

Common mistakes to avoid in invoice formatting include omitting any of these mandatory details, incorrectly calculating VAT, or failing to specify the county and, for Bucharest, the sector of the buyer's address in e-invoices. Simplified invoices are permitted for sales of €100 or less, requiring fewer details.

For B2B transactions in Romania, understanding the nuances of e-invoicing and currency conversion is paramount for compliance and smooth operations. A significant development is the mandatory implementation of the RO e-Factura system. As of January 1, 2024, B2B e-invoicing became mandatory for all domestic transactions between Romanian VAT-registered businesses. This means invoices for goods or services exchanged between resident companies must be issued, transmitted, and received exclusively through the government's RO e-Factura platform.

The e-invoices must adhere to the RO_CIUS XML format, which is compliant with European e-invoicing standards (EN 16931-1). Suppliers must submit electronic invoices to the RO e-Factura platform in XML format, and the tax administration performs checks and validations. Once validated, the platform generates a digitally signed XML invoice, which is considered the valid invoice. The deadline for transmitting these invoices is within five working days of issuance, a change from five calendar days effective January 2026. Both the issuer and the recipient must be registered on the RO e-Factura platform.

For currency conversion considerations, when invoicing in a foreign currency, it's essential to use an officially recognized exchange rate, typically published by the National Bank of Romania (BNR), to convert to RON for VAT reporting purposes. While invoices can be issued in foreign currency, the VAT amount must often be expressed in RON.

Effectively managing currency conversions and payment terms is crucial when dealing with Romanian clients, as is having a strategy for late payments and disputes. When handling currency conversions, if you invoice in a currency other than Romanian Leu (RON), ensure that the exchange rate used is clearly stated on the invoice and is consistent with official sources, such as the National Bank of Romania's daily exchange rate. This is particularly important for VAT calculation and reporting. Some payments from Romania may also be subject to withholding tax, so it's wise to check for double taxation agreements between your country and Romania.

Setting payment terms for Romanian clients should be done with clarity. The standard payment term in Romania is 30 days, though parties can agree to extend this, typically not exceeding 60 days. Any agreement for terms longer than 60 days must not be abusive. It's advisable to explicitly state the payment due date on your invoice.

Dealing with late payments and disputes requires a structured approach. In Romania, late payment interest can be charged on overdue invoices. The legal default interest rate for commercial transactions is applied at the policy reference rate of the National Bank of Romania plus 8 percentage points. For foreign currency transactions, the rate is the BNR policy rate plus 6%. If no rate is agreed upon in the contract, the legal default rate applies. The limitation period for debt collection in Romania is generally three years from when the claim is due. For B2B debt recovery, initial steps often involve sending a formal demand letter, followed by a payment order procedure through the courts if necessary. Legal procedures for debt collection can range from several weeks to months, depending on the case's complexity and the debtor's cooperation.