According to a report recently published by the European Commission, Romania remains in last place in the EU in terms of VAT collection, once again registering the largest collection deficit of this tax from the total amount to be collected, estimated at 35.5%. ), which uses data for 2020. The EC expects the difference to decrease to 33% in 2021 thanks to the measures taken by the Romanian tax administration starting in 2020 to implement various digital reporting tools, such as the implementation of SAF-T and the connection of fiscal cash registers to ANAF servers.

A major positive point from the report is that the total EU VAT deficit in 2020 is estimated to decrease by around €30 billion compared to the revised estimate for 2019, to €93 billion. The explanation is that during the recession, voluntary compliance increased in part as a result of public financial support measures that depended on the payment of taxes.

However, further efforts are needed to improve VAT collection and for this reason, together with the VAT gap report, the European Commission launched a series of proposals to adapt the VAT system to the digital age. The new system introduces real-time digital reporting for VAT purposes based on electronic invoicing, which will provide Member States with the valuable information they need to strengthen the fight against fraud.

The EC estimates that e-invoices will help reduce VAT fraud by up to €11 billion a year and reduce administrative and compliance costs for EU traders by over €4.1 billion a year over the next ten years.

Read the rest of the article on the PwC Romania blog

The article is signed by Daniel Angel, partner, head of tax and legal department of PwC Romania

Article supported by PwC Romania