How to Obtain a VAT Refund
A 19% value added tax (VAT) applies to retail prices in Romania. Certain businesses, like restaurants, hotels and shopping centers have retail prices that include the VAT. A 9% VAT rate is retained at all bread products since 2013. Public interest businesses, like medical treatment, social and cultural activities organized by public institutions, are exempt from VAT. According to the Romanian Tax Code, you can obtain a VAT refund in certain conditions. Our Romanian accountants can give further details about how to qualify for a VAT refund.
Conditions for a VAT refund in Romania
Romanian legal persons, registered for tax purposes, can recover the VAT and refund it through a VAT return. Starting with May 1st 2017, new rules apply to VAT refund in Romania. There are two things to consider when looking for a VAT refund. On the first hand, taxpayers are returned the requested VAT only after the Romanian tax authorities perform an audit over the documents and transactions of the company. On the other hand, the VAT refund request has to be resolved by the tax authorities within 45 days from the date when the request is submitted. Several documents need to be made available to the tax authorities during the VAT audit:
• The original invoices for sales and purchases made by the company;
• Third parties agreements (both sales and purchases);
• Disclosures of the services provided by suppliers and the acceptance forms from these suppliers;
• Customer services disclosures;
• Transfer price file – although this document is not related to VAT refund it is still compulsory for the audit procedures.
Beside this documentation, a translation of the papers issued in a foreign language can be requested by the Romanian tax authorities. Legal assistance for the tax auditing process and VAT refund can be provided to you by our accountants in Romania.
Other information regarding the VAT refund
In order to obtain a refund, the VAT refund claim has to be submitted to the Romanian tax authorities no later than June 30 of the year following the one when the expenditures were incurred. You can claim a VAT refund for periods varying from three months to one year. No fiscal representative is needed for EU companies which apply for a VAT refund as it can be paid directly into the company's bank account in the country of origin. A Romanian bank account and a fiscal representative are required for non-EU companies during the VAT refund procedure.
If you need help in preparing and filing the tax refund documents, don't hesitate to contact our team of Romanian accountants.