For any company director in Romania – and especially for international investors – moving from non-taxable to VAT-registered status is one of the most significant moments in the fiscal life of a business. It is not a mere formality: it changes how you invoice, how you calculate prices, your cash flow, and the volume of returns you owe monthly or quarterly.
The key concept is the VAT threshold (in Romanian “plafon TVA”) – the turnover limit below which a company may apply the special exemption scheme for small enterprises. As long as you stay under this threshold, you do not add VAT on your invoices and you do not file a VAT return. Once you exceed it, VAT registration becomes mandatory, within strict legal deadlines.
In this article we explain clearly how the exemption threshold works, what triggers the registration obligation, what changes in practice once you become liable, and when voluntary registration is worthwhile even if you have not reached the threshold. One principle up front: the exact figures (threshold, VAT rates) are amended periodically by law, so we quote them with a reference year and recommend checking the value currently in force.
What the VAT exemption threshold is
The special exemption scheme for small enterprises allows companies with an annual turnover below a certain limit to operate without charging VAT. In practice, the invoice you issue contains no VAT, but neither can you deduct the VAT on your purchases.
For many years, the exemption threshold was set at RON 300,000 in annual turnover. As part of the European reform of the VAT regime for small enterprises, Romania raised this threshold to RON 395,000, effective from the second half of 2025. Because these values can change, please verify the threshold in force at the time of your calculation.
Important: the threshold refers to turnover achieved, not to profit. It is calculated on a calendar-year basis and includes taxable transactions and, under certain conditions, some exempt operations. Exceeding it is assessed on the cumulative value since the start of the year.
When registration becomes mandatory
The obligation to register for VAT arises the moment turnover exceeds the exemption threshold. The Tax Code provides a short deadline within which the registration application must be filed with the tax authority ANAF – usually by the 10th of the month following the one in which you reached or exceeded the threshold.
The moment of crossing is essential. A breach not identified in time can generate retroactively owed VAT, interest and late-payment penalties. Continuous monitoring of turnover is therefore not optional but a necessity.
- Mandatory registration – upon exceeding the exemption threshold.
- Optional (voluntary) registration – possible at any time, even below the threshold, if advantageous.
- Registration for intra-community transactions – a special VAT number, distinct from domestic taxable status, relevant for trade with EU partners.
What changes once you become VAT-liable
Once registered, new obligations arise, but so do advantages:
| Aspect | Not VAT-registered | VAT-registered |
|---|---|---|
| Sales invoice | Without VAT | With VAT at the applicable rate |
| VAT on purchases | Not deductible (a cost) | Deductible (right to deduct) |
| VAT return | None | Filed monthly or quarterly |
| Informative declarations | No | Declaration 394; for EU trade 390 (VIES) |
| Price for non-registered clients | Lower (no VAT) | Higher (VAT included) |
The standard VAT rate in Romania stood at 19% for many years and, from 2025, was increased to 21%, alongside a reshaping of the reduced rates. Because rates change by law, treat these percentages with caution and verify the rate in force for each type of good or service.
As a registered person you add VAT to every invoice but recover the VAT paid on purchases. For foreign-owned companies this matters especially in group reporting and in the context of double-taxation relief: VAT is a pass-through item that must be cleanly separated from the corporate income tax result.
The VAT return and related declarations
After registration, the main reporting obligations are:
- The VAT return (form 300) – filed monthly or quarterly; it contains output VAT, input VAT and the balance payable or recoverable.
- Declaration 394 – the informative declaration on domestic supplies and purchases between taxable persons.
- Declaration 390 (VIES) – the recapitulative statement for intra-community supplies and acquisitions, particularly relevant for companies trading with EU partners.
To these are added the modern reporting obligations: e-Factura, SAF-T (D406) and, where applicable, e-Transport. Our accounting and tax advisory services include the complete setup of these reporting flows – including reporting to a parent company abroad.
Voluntary registration: when it pays off
Voluntary VAT registration, even below the threshold, can be advantageous in certain situations:
- You work mainly with VAT-registered clients – for them the VAT is deductible, so the gross price does not affect them.
- You have large purchases and investments – equipment, goods, services with VAT that you can fully deduct as a registered person.
- You are starting out with significant investment – input VAT from the setup phase can be recovered.
If, on the other hand, you sell mainly to individuals or non-registered businesses, adding VAT makes your price less competitive or reduces your margin. The decision depends on your client and cost structure – an analysis we perform for each company as part of our advisory services.
Why monitoring the threshold matters
The most common risk for growing companies is exceeding the threshold without noticing in time. The consequences can be costly: VAT owed retroactively from the date you should have registered, even if it was never charged to clients, plus interest and late-payment penalties.
That is why monthly monitoring of cumulative turnover is a core part of the accounting service. At Conta Fiscal we continuously monitor the threshold for our clients and alert them in good time as they approach it, so that registration and transition are planned rather than improvised under the pressure of a penalty.
If you want to know exactly which regime your company falls under and what the optimal VAT strategy is, contact us for a focused discussion. We analyse your specific situation and propose the solution that protects both your compliance and your margin.
Frequently asked questions
What is the VAT threshold in Romania?
The exemption threshold was RON 300,000 in annual turnover, raised to RON 395,000 effective from the second half of 2025. Because the values can change, please verify the threshold in force at the time of your calculation.
What happens if I exceed the VAT threshold and do not register?
You owe VAT from the date of the breach, even if you did not charge it to clients. ANAF can assess VAT retroactively, plus interest and late-payment penalties.
Can I register for VAT voluntarily, below the threshold?
Yes. Voluntary registration is especially advantageous if you work with VAT-registered clients or have large purchases and investments whose input VAT you want to deduct.
Which returns must I file as a VAT-registered company?
The main ones are the VAT return (form 300), the informative declaration 394 and, for intra-community transactions, the recapitulative statement 390 (VIES), complemented by e-Factura and SAF-T.
Is VAT handled differently for foreign-owned companies?
The rules are the same, but VAT treatment requires particular care in group reporting and in intra-community transactions with the parent company. We support the correct handling of these flows.