Romania Retreats from Pre-Filled VAT Enforcement

Romania has withdrawn key enforcement provisions from its RO e-TVA system, highlighting the difficulties governments face when using electronic invoice data to calculate businesses' VAT liabilities.

Introduced in August 2024, RO e-TVA uses data from e-Factura, SAF-T, customs declarations and other sources to generate pre-filled VAT statements.

However, the tax authority's calculations frequently differed from those of taxpayers, who could then be required to explain discrepancies even when their own VAT returns were correct.

Romania has now repealed key obligations to respond to discrepancy notifications, together with associated penalties. The pre-filled VAT system remains operational.

Implications for Other Countries

Romania's experience raises several important considerations for governments planning similar systems:

• Invoice data does not provide the complete VAT picture. Timing differences, credit notes and other tax treatments can affect the final VAT liability
• Pre-filled returns may not reduce administrative work. Businesses could simply exchange preparing VAT returns for reconciling government calculations
• Poor data quality creates problems for both businesses and tax authorities. Missing or duplicated transactions can generate discrepancies unrelated to non-compliance
• Reliable calculations are essential before introducing penalties. Businesses should not be penalised for discrepancies caused by incomplete government data

As more countries introduce e-invoicing and continuous transaction controls, interest in pre-filled VAT returns is expected to grow.

Romania's experience demonstrates that collecting transaction data and calculating the correct VAT liability are two very different challenges.

Source: VATCalc – Romania e-VAT Retreat Exposes Challenges of Pre-Filled VAT Returns