Expanded VAT Ceiling for Small Businesses: Broader Implications and Stricter Obligations Unveiled

• The Government Ordinance 22/2025 introduces significant changes to VAT regulations for small enterprises.
• The VAT exemption threshold for small enterprises is increased from 300,000 lei to 395,000 lei starting September 1, 2025.
• Obligations for taxpayers become stricter, including immediate VAT registration upon exceeding the threshold.
• VAT must be collected starting with the transaction that exceeds the exemption threshold.
• The 10-day registration period is eliminated, requiring immediate compliance.
• Invoices issued without VAT that exceed the threshold must be corrected for deduction rights.
• The special VAT exemption regime is extended across the EU, allowing small enterprises to apply it in other member states.
• Cross-border activities can benefit from the special VAT exemption if the annual EU turnover does not exceed 100,000 euros.
• Changes redefine the place of service provision, affecting VAT taxation location.
• For B2C transactions, the place of VAT taxation depends on the service delivery method.
• Physical events are taxed in the state where the event occurs, while virtual services are taxed in the state where the beneficiary is located.

Source: blog.pwc.ro

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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