Electronic invoicing, mandatory for all transactions from January 1, 2024

According to a draft decision recently launched by the Council of the European Union, from 1 January 2024, the electronic invoicing system will not be introduced in stages, but in general. This means that from next year, the system will become mandatory for all companies.

The electronic invoicing system has been operational since 2022 and invoicing is mandatory for B2G transactions ( between companies and state agencies ), transactions in goods with tax risks and travel agencies.

The information contained in the invoice will be reported to the tax authorities, so that the tax bodies will have access to this data in real time.

This will allow tax authorities to automatically verify the coherence between the declared and paid VAT and the invoices issued and received in a timely manner. This possibility will help Romania to increase the efficiency and effectiveness of combating VAT fraud and tax evasion.

At the same time, the introduction of mandatory electronic invoicing is one of the measures included in the national recovery and resilience plan. According to Romania, this reduces your VAT collection deficit.

In a letter sent to the European Commission in January 2022, Romania requested a derogation from Articles 178, 218 and 232 of the VAT Directive to allow mandatory electronic invoicing for transactions between taxpayers. It subsequently amended its application by letter registered by the Commission on 30 September 2022. It was therefore confirmed that the authorization which it requested derogated only from Articles 218 and 232 of the VAT Directive, stating that the entry into force of the measure will be postponed until 1 January 2024, rather than on 1 July 2022, the initial date of the application. The system remains optional for non-residents.

Benefits of electronic invoicing for taxable persons

The introduction of mandatory electronic invoicing for transactions between taxpayers will also benefit economic operators by digitizing and reducing administrative burdens, while ensuring a level playing field among businesses. Some of the benefits of implementing electronic invoicing for economic operators include faster payments, savings associated with transmission costs, fast and cheap processing of data contained in invoices and low registration costs.

Qualified digital certificate

In order to transmit invoices through the RO e-Factura system, both in the case of the B2G relationship and in the B2B relationship, taxable persons must authenticate themselves by using a qualified digital certificate. This certificate is also used for submitting various tax returns.

The RO e-Factura system is the basis for the implementation of the mandatory electronic invoicing system for transactions between taxable persons.

The use of the RO e-Factura system will be optional for non-established economic operators.