Accounting in Romania: The most important facts you need to know

The proper management of accounting in Romania is crucial for businesses and investors aiming to succeed in the country. By blending local regulations with international standards, Romania’s accounting system provides both challenges and opportunities. This guide highlights key laws, compares Romanian Accounting Standards with IFRS, and explores the role of digital technology to help you navigate the accounting landscape effectively.

In this article, you’ll learn about:

• Overview of statutory requirements:
  • The legislative framework governing accounting in Romania
  • Romanian Accounting Standards and the adoption of IFRS
  • The structure and flexibility of the Chart of Accounts
  • Financial statements, reporting, and auditing requirements
  • Key aspects of VAT regulations and corporate income tax
• Facts and trends, such as
  • Challenges for foreign businesses in Romania
  • The growing trend of digitization in accounting and its impact
  • Upcoming changes shaping Romania’s accounting landscape
  • How outsourcing accounting can simplify your business processes

Legislative framework for accounting in Romania

In Romania, accounting practices are primarily governed by the following legislative acts:

1. Accounting Law No. 82/1991: This foundational law establishes the general framework for accounting in Romania, detailing the obligations of entities regarding financial records, reporting, and compliance.
2. OMFP 1802/2014: This order approves the accounting regulations in line with European directives, specifying the structure and content of financial statements, accounting principles, and valuation rules.
3. OMFP 2844/2016: This order endorses the International Financial Reporting Standards (IFRS) for certain entities, particularly those of public interest, ensuring alignment with international accounting standards.
4. Fiscal Code (Law No. 227/2015): While primarily addressing taxation, this code includes provisions that impact accounting practices, such as rules on the recognition of revenues and expenses for tax purposes.
5. Law no. 31/1990 on Companies (Legea societăților): Regulates legal forms and corporate structures, including financial reporting obligations such as approval and filing of annual financial statements.
6. EU Regulations and Directives: Romanian accounting is harmonized with EU law; changes in EU directives (e.g., non-financial reporting, sustainability reporting under CSRD) are gradually transposed into national law.

Romanian accounting standards and IFRS

Romanian Accounting Standards (RAS) differ significantly from International Financial Reporting Standards (IFRS) in areas like compliance objectives, measurement practices, and disclosure requirements. While IFRS emphasizes a true and fair view for stakeholders with detailed guidance on revenue recognition and consolidation, RAS aligns more with local taxlaws and fiscal considerations. Certain entities, such as listed companies and public interest entities, are mandated to adopt IFRS, while others may choose it voluntarily for broader market appeal. Transitioning to IFRS, however, can involve additional costs and dual reporting obligations. Read more for a deeper dive into these distinctions and their practical implications in our dedicated article.

Structure and flexibility of the Chart of Accounts

The Romanian Ministry of Finance prescribes a standardized Chart of Accounts (CoA) to ensure uniformity and compliance in financial reporting across entities. This structure is organized into several primary classes, each encompassing specific account types:

• Class 1 – Capital Accounts: accounts related to equity, such as share capital, reserves, and retained earnings.
• Class 2 – Fixed Assets: tangible and intangible assets, including property, plant, equipment, and long-term investments.
• Class 3 – Stocks and Production in Progress: inventories, work in progress, and goods.
• Class 4 – Third-Party Accounts: receivables and payables involving customers, suppliers, and other third parties.
• Class 5 – Treasury Accounts: cash, bank accounts, and short-term financial investments.
• Class 6 – Expenses Accounts: operating and financial expenses
• Class 7 – Revenues Accounts: operating and financial revenues
• Class 8 – Special Accounts: accounts for commitments, off-balance-sheet items, and other special operations.

While this standardized CoA provides a foundational framework, it offers a degree of flexibility for businesses to tailor it to their specific operational needs. Companies are permitted to:

Financial statements and reporting

Financial statements in Romania are prepared in accordance with Order 1802/2014, aligning with European Directives, or IFRS, depending on the entity’s reporting requirements.

• Entities are required to prepare standardized financial statements, including balance sheets, profit and loss accounts, and cash flow statements, ensuring compliance and comparability.
• Larger entities and public interest entities must adhere to additional reporting and audit requirements, with statutory audits mandated for entities exceeding specific thresholds in total assets, net turnover, or employee count.

Annual submissions are due by May 30, with specialized reports required for events like mergers or liquidations. Learn more about Romanian financial reporting practices in our dedicated article.

Auditing requirements

In Romania, auditing requirements are governed by Law No. 162/2017, which transposes the EU Audit Directive into national legislation. This law outlines the criteria determining which entities are subject to mandatory audits based on their size and financial metrics.

An entity is required to undergo a statutory audit if it exceeds at least two of the following thresholds for two consecutive financial years:

• Total Assets: RON 16,000,000
• Net Turnover: RON 32,000,000
• Average Number of Employees: 50

In addition to companies that meet the general financial thresholds, certain entities are subject to audit based on their legal form, industry, or classification as public interest entities. These specific rules apply regardless of size and are the following:

• Public Interest Entities (PIEs): Regardless of size, entities classified as PIEs (such as listed companies, banks, and insurance firms) are subject to mandatory audits.
• Voluntary Audits: Entities not meeting the mandatory audit criteria may opt for voluntary audits to enhance financial transparency and credibility.
• Medium and Large Companies (under OMFP 1802/2014): If classified as medium orlarge according to OMFP 1802, they may also be required to have audits, depending on:
  • Legal form (e.g., SA – joint-stock companies)
  • Activity (some regulated sectors like energy or telecom have mandatory audits)

Record archiving

Romania’s legal framework, including Accounting Law No. 82/1991 and Order 2634/2015, mandates that financial records, payroll statements, and accounting registers be retained for a minimum of five years to ensure compliance and support audits. Records can be archived physically or electronically, with electronic formats requiring accessibility for authorities. Special provisions exist for destroying expired documents and retaining records for long-lasting assets. By adhering to these guidelines, businesses can maintain transparency and accountability. To explore the details of these regulations and their implications, read more on this topic in our dedicated article.

VAT regulations in Romania

In Romania, Value Added Tax (VAT), known locally as “TVA” (Taxa pe Valoarea Adăugată), is a consumption tax applied to the sale of goods and services. Governed by Title VII of the Fiscal Code (Law no. 227/2015), it adheres to the EU VAT Directive (Directive 2006/112/EC) to ensure compliance across member states.

VAT rates

VAT registration

VAT calculation

VAT payment and reporting

What else to consider when it comes to Romanian VAT

For a more in-depth explanation of VAT rules, registration requirements and filing procedures, head over to our dedicated eBook.

Corporate income tax in Romania

Corporate income tax (CIT) in Romania is paid by resident companies on their worldwide income and by non-resident companies on their income derived from Romanian sources. The standard CIT rate is 16%, with special rates for activities like gambling and nightclubs. Tax deductions are divided into fully deductible, limited deductibility, and non-deductible categories. Quarterly tax payments, advance payment options, and annual CIT returns are required, with the latter due by the 25th day of the third month after the fiscal year ends. Monitoring turnover thresholds or employee requirements is vital for microenterprise tax transitions.

The system offers filing flexibility, allowing alignment with quarterly or annual reporting. Companies must account for deductibility limits like those on social expenses, ensuring compliance with Romanian tax laws. Efficient management involves planning for advance payments or using estimated annual tax systems.

For a deeper dive into Romania’s tax framework, deductions, and filing procedures, head over to our dedicated article.

Unique challenges for foreign entities

Foreign entities face a challenging set of rules for accounting, taxes, and compliance when working in Romania. From dual reporting standards to digital tools, understanding these requirements is essential for effective financial management and following regulations. The most common pitfalls are:

Understanding these aspects is critical to compliant operation in the Romanian market. For a deeper dive into these topics, click here to read more in our dedicated article.

Digitization of accounting in Romania

Digitization is revolutionizing accounting practices in Romania, bringing significant improvements in efficiency, compliance, and transparency. With the integration of advanced digital systems and mandatory regulations, businesses must adapt to these changes to remain competitive and compliant. The most important areas to consider are:

• Mandatory e-invoicing
• SAF-T reporting
• Electronic filing
• Digital record-keeping
• Compliance penalties

To explore these developments fully and understand their implications for your business, read more in our dedicated article.

Upcoming changes to accounting in Romania

The evolving tax and regulatory framework in Romania brings both significant changes and opportunities for foreign businesses. Staying informed about these updates is crucial for maintaining compliance and optimizing operations. Below, we highlight the key developments that will shape the business environment in the coming year:

Consulting with Romanian tax advisors is recommended to ensure compliance with the evolving regulatory landscape. Read our dedicated article for a deep-dive into all fiscal changes.

Simplify your accounting in Romania with Accace

Whether you’re a startup, SME, or international corporation, handling accounting in Romania comes with distinct rules, deadlines, and expectations. That’s where Accace steps in. With deep local knowledge and international experience, we provide accounting, tax advisory, and compliance services in Romania tailored to your company’s size and structure. From statutory books and IFRS reporting to tax filings and audits, we help you stay compliant and free up resources to focus on growing your business, with the confidence that everything is done right.