VAT exemption for small enterprises in Romania: Important changes regarding the application of the special scheme | News Flash

Starting from September 1, 2025, significant changes to the special VAT exemption scheme for small enterprises in Romania came into effect following the adoption of Government Ordinance no. 22/2025. These changes introduced not only adjustments to the VAT exemption threshold but also a series of registration and compliance obligations for small businesses.

Increase in the VAT exemption threshold

One of the key provisions of the new ordinance was the increase in the annual turnover threshold for VAT exemption, from RON 300.000 to RON 395.000.

Taxable persons established in Romania whose annual turnover does not exceed this new threshold of RON 395.000 can continue to benefit from the special VAT exemption scheme, which means:

• No VAT collection on the supply of goods and services.
• No right to deduct VAT on purchases made.

New rules regarding VAT registration obligations

Government Ordinance no. 22/2025 also brought important changes regarding the timing of VAT registration obligations and the application of the standard VAT regime. By September 30, 2025, entities that exceeded the VAT exemption threshold had had to adjust their tax status according to the new regulations.

What happens to those who did not register by September 30, 2025?

If an entity has not complied with the VAT registration deadline by September 30, 2025, it would face the following consequences:

• Continuing VAT obligations: Companies that exceeded the threshold but did not register will remain subject to VAT regulations from the date the threshold was exceeded. The tax authorities may impose fines and penalties for failure to register on time.
• VAT recovery for previous periods: Depending on the nature of their business, the tax authorities may require the company to pay VAT retroactively, i.e., on transactions made before registration. Additionally, firms may lose the right to deduct VAT on purchases made prior to exceeding the threshold.

The situation for entities already registered for VAT

a. Companies established before 2025

Taxpayers who registered for VAT based on the old threshold of RON 300.000 can request deregistration if they meet two cumulative conditions:

• Their turnover in 2024 did not exceed the RON 300.000 threshold.
• At the time of the application, their turnover remains below the new RON 395.000 threshold.

b. Companies Established in 2025

Entities set up in 2025 that voluntarily registered for VAT based on the old RON 300.000 threshold before September 1, 2025, can also request deregistration, provided their turnover does not exceed the new RON 395.000 threshold at the time of the request.

Important: Deregistration takes effect only after the tax authorities confirm the decision. Until the deregistration decision is received, the company remains subject to all VAT obligations.

European context and legislative objectives

The changes introduced by Government Ordinance no. 22/2025 regarding the VAT exemption for small enterprises in Romania are part of the process of transposing EU Directive 2020/285 into national law. The objectives of these changes are:

• Harmonizing VAT rules for small enterprises across Europe.
• Simplifying administrative and fiscal burdens for businesses with low turnover.
• Creating a more flexible legislative framework adapted to the realities of the internal market.

Changes to the VAT small enterprise exemption regime in Romania may significantly affect your tax obligations and the financial strategy of your business. If you need support in assessing eligibility, calculating the threshold or registering for VAT purposes, the Accace Romania specialists can provide tax advisory services tailored to your needs.

Elena Chertes

Accountant | Accace Romania

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