The increase in the VAT registration threshold represents a breath of fresh air for many businesses at the beginning of their journey, meaning lower compliance costs and reduced bureaucracy for a longer period, according to representatives of IMM Romania.
„IMM Romania, the only representative employers’ confederation at the national level for SMEs, requests the prompt transposition of the provisions of Directive (EU) 2020/285, amending Directive 2006/112/EC regarding the common VAT system for small enterprises,” reads a press release of the organisation.
According to Directive (EU) 2020/285, member states were required to amend their national legislation by December 31, 2024, so that the changes regarding the application of the VAT regime would take effect on January 1, 2025.
„Although several changes were made to Law No. 277/2015 – the Fiscal Code, in December, the Ministry of Finance has only this month developed and published the draft emergency ordinance that transposes the European directive into national legislation. Updating the value of this threshold has been necessary for a long time, to correlate with the increase in the exchange rate and prices over the past few years, which have eroded the turnover of small entrepreneurs. Raising the threshold is a breath of fresh air for many businesses just starting out, meaning lower compliance costs and reduced bureaucracy for a longer period,” said representatives of IMM Romania.
According to the quoted source, the draft emergency ordinance includes several changes. One of these is the increase of the threshold for mandatory VAT registration from the value of 300,000 lei (the declared or achieved annual turnover) to 395,000 lei, a measure that allows small businesses to be exempt from VAT registration if they exceed the 300,000 lei threshold or to be removed from the register of VAT-registered taxable persons if their turnover is below the 395,000 lei threshold.
Another change is „the application of the special VAT exemption regime for companies in Romania in other member states, with the obligation to meet two cumulative conditions: compliance with the 100,000 euro turnover threshold at the EU level and compliance with the thresholds in the member states.”
According to the draft regulatory act, the new measures regarding VAT registration are expected to apply starting from April 1, 2025.
„Given the importance of these measures and the need for predictability in managing companies and in developing business strategies, IMM Romania requests the swift adoption of the Emergency Ordinance for the modification and completion of Law No. 227/2015 regarding the Fiscal Code. IMM Romania promotes and supports all fiscal measures that contribute to: reducing the bureaucratic burden on small businesses; simplifying the method of determining taxes for the activity carried out, through the application of the flat-rate tax for micro-enterprises; creating a predictable business environment; and developing SMEs in an economic environment characterised by stability and competitiveness,” the document further reads.
AGERPRES
