Retailers to benefit from changes in Romania’s billing system

Retailers are set to attract more customers that are registered for Romanian VAT after the Ministry of Public Finance made it possible for them to deduct VAT on bills up to EUR 100, says Mariana Vizoli, director of the VAT legislation department at the Ministry of Public Finance.

How has the billing system for companies changed?

Starting March 14, bills up to EUR 100 including VAT, will represent documents for deducting VAT for buyers that are VAT payers, under the condition that suppliers can record with the cash register on the bill the VAT-registration code of the beneficiary at the exchange rate of that day. Car fuel stations that will also have to abide to this regime, to adapt their cash registers so that their software can write the VAT-registration code of the beneficiary. In addition large retailers will benefit from this facility, because even their bills (up to EUR 100), if they will write the VAT registration code, will be considered deductible documents for the beneficiary, something that wasn’t possible up to now. By March, 14, only the bills issued by car fuel stations were considered VAT deductible documents.

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For retailers that want to attract clients, they simply have to modify the software and adapt it to write the VAT registration code. For car fuel stations, this measure may be perceived a little bit like a tax restriction, because up to now they were allowed to issue bills no matter the value, which were deductible. They only had to stamp them and the beneficiary would right his identification data. Now they will apply the same regulation as the rest.

How much will this measure cost companies?

From the analysis we carried out, adapting the software runs a cost around EUR 20, so there aren’t any large additional costs. Of course, for retailers adapting the software can attract many clients that are VAT-registered. If they make small purchases up to EUR 100, they will have an advantage because they will be able to deduct the VAT without requiring an invoice.

Is this measure applied in Europe?

The provision regarding simplified invoices exists in all Europe starting January 2013, because there was a change in the directive, which said that any supplier can issue a simplified invoice that doesn’t contain the identification data of the beneficiary if the invoice is worth up to EUR 100 including VAT.

For instance, the Official Gazette doesn’t have a cash registry, but it doesn’t know the identification data of its clients so it will issue even simplified invoices that will not contain these data.

Ovidiu Posirca