The threshold above which taxable entities are required to register for VAT purposes was raised to RON 300,000, in accordance with the provisions of Law no. 72 of 22 March 2018 on the approval of Government Ordinance no. 25/2017 on changes and supplements to Law no. 227/2015 regarding the Fiscal Code. This pronouncement was published in the Official Journal no 260 of 23 March 2018.
According to this law, “Taxable entities established in Romania in accordance with Art. 266 para. (2)(A), with declared or realised annual turnovers not exceeding the EUR 88,500 threshold, the RON equivalent thereof determined using the exchange rate published by the National Bank of Romania at the date of accession and rounded to the next thousand, i.e. RON 300,000, may apply the tax exemption, hereinafter referred to as special exemption regime, for the operations provided for in Art. 268 para. (1), except for the intracommunity deliveries of new vehicles, which are exempted in accordance with Art. 294 para. (2)(b)”.
According to the pronouncement, taxable entities established before the end of 2017 are required to apply for VAT registration if they exceed the RON 220,000 threshold during the period between 1 January 2018 and the first day of the month following the one in which this law becomes effective (1 April 2018). If this threshold is not exceeded during the above-mentioned period, i.e. the reference period, the obligation to register for VAT purposes will arise if the RON 300,000 threshold is exceeded before 31 December 2018, according to the document. To determine the RON 300,000 threshold, the turnover of the reference period is also taken into account.
Taxable entities established during the reference period are required to apply for VAT registration if they exceed the RON 220,000 threshold during this period or if they exceed the RON 300,000 threshold before the end of 2018.
However, for taxable entities established after 1 April 2018, the pronouncement states they are required to apply for VAT registration if they exceed the RON 300,000 threshold during the period between their establishment and 31 December 2018.
The pronouncement also indicates the circumstances in which entities registered for VAT purposes may request to be deregistered. “Taxable entities registered for VAT purposes during the reference period, as a consequence of exceeding the exemption threshold, may request, starting with the first day of the month following the one when this law becomes effective, their removal from the list of VAT registered entities in accordance with Art. 316 of Law no. 227/2015, with its subsequent amendments and supplements, in order to apply the special exemption regime, so long as they have not exceeded the RON 300,000 threshold at the date on which they make the request”, as stated in Art. II para. (1)(e).
Taxable entities registered for VAT purposes before 2018 may request their removal from this list starting with and including the first day of the month following the one when this law becomes effective, if they have not exceeded the RON 220,000 threshold in 2017 and if they have not exceeded the RON 300,000 threshold until the date they request their removal from the list.