Understanding the “VAT on Collection” System: Eligibility, Benefits, and Application Process

• The “VAT on Collection” system allows companies to pay VAT only when they receive payment for invoices, improving cash flow and reducing credit risk.
• It is optional and mainly benefits small and medium-sized enterprises with annual turnover below 4,500,000 lei.
• Invoices under this regime must state “VAT on collection” and collection can occur via various payment methods.
• Companies exceeding the turnover threshold, belonging to a fiscal group, or not established in Romania are not eligible.
• Exit from the system occurs if the turnover threshold is exceeded or by voluntary withdrawal, and eligibility can be checked online on the ANAF website.

Source: teaha.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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