The small companies in Romania will benefit from VAT exemption not only locally, but also in other Member States of the European Union, if they do not exceed the Union ceiling of 100,000 euros and the one applicable in the respective country, according to an emergency ordinance project.
Small companies in Romania will benefit from VAT exemption in all EU states. Photo archive
Currently, the national legislation in the VAT field regulates the possibility of small companies, respectively of the taxable persons established in Romania who register a turnover under the VAT exemption ceiling of 300,000 lei, to apply the special exemption regime provided in art. 310 of Law no. 227/2015 regarding the Fiscal Code, with the subsequent amendments and completions.
Within this regime, small businesses do not collect VAT for deliveries of goods/services made, but they cannot deduce the VAT.
The Ministry of Finance proposes an ordinance by which the companies with a small turnover will be able to apply the special VAT exemption regime and in other states of the European Union, not only in Romania.
The measure transposes the European directives and is valid for companies that do not exceed the Union ceiling of 100,000 euros.
Basically, a Romanian company will be able to activate in several EU countries maintaining the status of VAT unpaid, which means lower costs and less bureaucracy.
What had already triggered the infringement procedure
In support of the urgency of the approval of the normative act, the Ministry of Finance invoked the reception by Romania of the letter of delay no. Infr (2025) 0097> Infr (2025) 0101 C (2025) 800/24 of the European Commission on:
– Cause 2025/0097, the infringement procedure having as its object the non -transposition of Directive (EU) 2020/285 of the Council of 18 February 2020 amending Directive 2006/112/EC on the common value added tax system in terms of the special regime for small enterprises and Regulation (EU) no. 904/2010 in terms of administrative cooperation and exchange of information for the purpose of monitoring the correct application of the special regime for small businesses, and
– Cause 2025/0098, the infringement procedure having as its object the non -transposition of Directive (EU) 2022/542 of the Council of 5 April 2022 amending Directives 2006/112/ED and (EU) 2020/285 regarding the value added tax.
“The non -adoption in the emergency regime of the legislation for the transposition of the two directives would have as a consequence the continuation of the infringement procedure by the European Commission against Romania for non -observance of the obligations that belong to them as a Member State of the European Union, with possible pecuniary consequences.”, Is mentioned in the note of foundation of the draft normative act.
The EU ceiling is 100,000 euros for unpaid VAT companies
One of the most important changes proposed by the Ministry of Finance concerns the harmonization of the special regime for small enterprises at European level. So far, small companies could only apply VAT exemption in the country where they were registered. The Directive (EU) 2020/285 changes this principle, allowing the execution of the exemption to other Member States, if certain conditions are respected.
Thus, a Romanian company that does not exceed the annual ceiling of 100,000 euros at the Union level will be able to request the application of the special regime and in other Member States, as long as it does not exceed the local ceiling in the respective country. In the mirror, small companies from other states will be able to benefit from exemption in Romania. For these, ANAF will assign an individual identification code with the suffix “ex”, which confirms their right to operate under the special regime.
Directive (EU) 2022/542 brings other relevant changes. It clarifies the way of taxation for cultural, educational, sports or entertainment services provided online or with virtual participation. From now on, VAT will be applied in the state of consumption – where the customer is established or has its residence. Basically, the situations are avoided in which a company invoices virtual services at different levels just because it is established in another Member State.
Transitional regime
Another important point concerns the transitional regime. Companies that, until September 1, 2025, exceed the old ceiling of 300,000 lei, but not the new one, of 395,000 lei, will not be obliged to register immediately for VAT purposes. These will be able to request the removal and return to the exemption regime, if they comply with the conditions regarding the turnover of 2024 and 2025.
The benefits for the business environment are significant: reducing bureaucracy, simplifying compliance and eliminating barriers for small companies that work over borders.
According to the Ministry of Finance, this change will encourage cross -border trade and provide greater flexibility to small businesses. At the same time, the project introduces electronic reporting and control mechanisms, to limit the risks of fraud and evasion.
Essentially, through this order of ordinance, Romania lines its fiscal code to European standards, bringing small companies closer to the unique digital and fiscal market of the European Union.
