Romania Enhances VAT Refund Controls with New Risk-Based Criteria

Romania Enhances VAT Refund Controls with New Risk-Based Criteria Under GEO No. 38/2026

Summary

• GEO No. 38/2026, published in the Official Gazette on 8 May 2026, amends the Fiscal Procedure Code to strengthen VAT refund controls. [agerpres.ro]
• The reform introduces additional risk criteria to be set by ANAF, complementing existing statutory rules and enhancing the risk-based audit framework.
• The ordinance has been challenged before the Constitutional Court by the Ombudsman, but remains in force pending a ruling. [agerpres.ro]

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Article

1. Introduction

Romania has adopted Government Emergency Ordinance (GEO) No. 38/2026, introducing targeted amendments to the Fiscal Procedure Code (Law No. 207/2015), the core procedural framework governing tax administration. [static.anaf.ro]

The ordinance, published in the Official Gazette on 8 May 2026, reflects a continued policy focus on strengthening VAT compliance and mitigating risks associated with undue VAT refunds. [agerpres.ro]

2. Strengthening the Risk-Based VAT Refund System

2.1 Existing Legal Framework

Romania applies a risk-based system to VAT refunds, whereby the tax authorities (ANAF) assess refund claims and determine whether:

• refunds are granted without prior inspection, or
• subject to pre-refund audit procedures, depending on the taxpayer’s risk profile.

This framework is grounded in the Fiscal Procedure Code (Law No. 207/2015), which also defines risk analysis as a key tool for identifying non-compliance. [legislatie.just.ro]

2.2 Key Changes Introduced by GEO No. 38/2026

GEO No. 38/2026 introduces a significant development by:

• Retaining statutory risk criteria explicitly included in the Fiscal Procedure Code; and
• Allowing for additional risk criteria to be defined through secondary legislation (ANAF orders).

This dual-layer approach enables the Romanian tax authorities to:

• rapidly adapt to emerging fraud schemes;
• enhance data-driven risk profiling; and
• update operational criteria without the need for frequent legislative amendments.

3. Expected Impact on VAT Refund Processes

The introduction of a more flexible risk framework is likely to have several implications:

3.1 Increased Audit Activity

Taxpayers may experience:

• a higher incidence of pre-refund audits, and
• longer processing timelines due to enhanced scrutiny.

3.2 Reduced Predictability

As part of the risk criteria will be defined via ANAF administrative orders, taxpayers may face:

• limited transparency on risk indicators;
• challenges in anticipating refund treatment; and
• a need for continuous monitoring of administrative guidance.

3.3 Alignment with Broader Compliance Trends

The reform aligns with broader trends in tax administration, including:

• increased reliance on risk analytics and digital controls;
• stronger focus on fraud prevention in VAT systems; and
• integration with evolving compliance tools (e.g., e-invoicing and real-time reporting).

4. Constitutional Challenge and Legal Uncertainty

On 12 May 2026, the Ombudsman referred GEO No. 38/2026 to the Constitutional Court, citing procedural and constitutional concerns. [agerpres.ro]

The challenge includes arguments that:

• the ordinance was adopted by a government acting in an interim capacity, and
• certain procedural safeguards (e.g. legislative approvals) may not have been respected. [agerpres.ro]

Despite this challenge:

• the ordinance remains effective, as emergency ordinances in Romania apply from the date of publication unless suspended or annulled by the Court. [romania-insider.com]

5. Outlook

The practical impact of GEO No. 38/2026 will depend on two key developments:

1. The content of the forthcoming ANAF order establishing additional risk criteria; and
2. The outcome of the Constitutional Court proceedings, which may confirm or invalidate the ordinance.

In the meantime, businesses—particularly those with regular VAT refund positions—should:

• ensure robust documentation and audit trails;
• reassess VAT refund processes and internal controls; and
• closely monitor legislative and administrative updates.

Sources

• Romanian Official Gazette (Monitorul Oficial) – Official Gazette
• Fiscal Procedure Code (Law No. 207/2015): https://legislatie.just.ro/Public/DetaliiDocument/170007 [legislatie.just.ro]
• AGERPRES – Ombudsman challenge to GEO No. 38/2026: https://agerpres.ro/english/2026/05/12/ombudsperson-challenges-safe-related-emergency-ordinance-at-constitutional-court–1555444 [agerpres.ro]
• Romania Insider – legal effect of emergency ordinances: https://www.romania-insider.com/ombudsman%20-public-administration-reform-ccr-2026 [romania-insider.com]

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Other articles

Romania’s Official Gazette (Monitorul Oficial) No. 393, May 8, 2026: Emergency Ordinances, Government Decisions, and Program Funding

• The Monitorul Oficial al României (Official Gazette of Romania) No. 393, dated May 8, 2026, publishes an Emergency Ordinance (No. 38) for modifying and supplementing normative acts, focusing on strengthening national defense capabilities, safeguarding essential security interests, and ensuring the continuity of economic activities.
• The Emergency Ordinance addresses critical national priorities, including investments in the defense industry, infrastructure development, management of EU recovery and resilience funds (PNRR) by an August 31, 2026, deadline, and measures to protect public funds from undue payments.
• Additionally, the Gazette includes Government Decision No. 382/2026, which details the allocation of state budget funds for the year 2026 to administrative-territorial units and educational institutions for financing the national “Healthy Meal” program, with a comprehensive list of beneficiaries and allocated amounts provided.

Source Official Gazette

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