Fiscal representative in Romania: what it is liable for, and why guarantees are asked

The short version

• A company established outside the EU registers for Romanian VAT only through a fiscal representative (article 316(7) of the Fiscal Code). For a company established in the EU, a representative is optional.
• The representative is designated as the person liable to pay the VAT on the company’s Romanian operations (articles 307(7) and 308(2)). It files the return and pays the tax under a VAT code issued for the company through it.
• People call this “joint and several liability”. The Romanian text does not, but the practical effect is the same or stronger: ANAF turns to the representative.
• Because of that, representatives screen clients and ask for security: commonly a deposit of one to two months of expected VAT, or a bank guarantee letter. This is market practice between the parties, not a requirement of the tax authority.
• The liability is limited in scope (VAT, mandated operations) and in time (the duration of the mandate), and a good agreement says so.

What the Fiscal Code actually says

Three texts carry the whole mechanism.

Article 316(7) deals with registration: a taxable person established in the EU but not in Romania “may” register by appointing a fiscal representative; a taxable person not established in the EU “is obliged” to register that way.

Articles 307(7) and 308(2) deal with payment. The person liable for VAT on a taxable supply is normally the supplier. Where that supplier is not established in the EU, it “is obliged, under the conditions set by the methodological norms, to designate a fiscal representative as the person liable to pay the tax”. The same wording applies to intra-Community acquisitions.

Point 89 of the methodological norms sets out how it works:

• the appointment is made by application to the tax office, with the company’s constitutive documents, the representative’s written acceptance and the contract showing the extent of the mandate (paragraph 1);
• only one representative is allowed for all the operations the company carries out in Romania; several representatives with limited engagements cannot coexist (paragraph 2);
• ANAF decides within 30 days at most and issues a VAT code for the foreign company through the representative, different from the representative’s own code (paragraph 3);
• once accepted, the representative “is bound, in terms of the rights and obligations concerning value added tax, for all the operations for which it has been mandated”, for as long as its mandate lasts (paragraph 4);
• the represented operations are not recorded in the representative’s own accounts, and it files a separate VAT return for each company it represents (paragraphs 10 and 13).

Read together: the VAT of the foreign company’s Romanian operations is declared by the representative, paid by the representative, and collected by ANAF from the representative.

“Joint and several liability”: the phrase and the law

The phrase comes from the EU VAT Directive, which gives member states two tools. Under article 204 they may allow or require a non-established taxable person to appoint a tax representative as the person liable for payment. Under article 205 they may, in addition, hold a person other than the one liable jointly and severally liable. Some member states used the second tool for representatives, and the expression spread from there into contracts and sales brochures across Europe.

Romania used the first. Its VAT rules make the representative the person liable to pay, and the words “jointly and severally” do not appear in point 89. Where the Romanian legislator wanted joint liability, it said so: the representative appointed for VAT refund claims by non-EU businesses “is held individually and jointly liable alongside the taxable person” (point 74(6) of the norms). The difference in wording is deliberate.

For the foreign company the distinction changes little, and for the representative it changes nothing for the better:

What the foreign company should take from this: the representative is not lending its name. It is putting its own balance sheet between your VAT and the Romanian state.

What the liability covers, and where it stops

Covered:

• the VAT due under the returns filed for the represented company during the mandate;
• interest and late-payment penalties when that VAT is paid after the 25th: 0.02% and 0.01% of the amount per day under the Tax Procedure Code;
• VAT assessed later by a tax audit for periods inside the mandate, for example on sales that were not reported or on input VAT that is refused, together with the non-declaration penalty of 0.08% per day that applies to assessed amounts.

Not covered:

• taxes other than VAT, such as corporate income tax or withholding taxes;
• customs duties, which are a matter for the customs representative;
• periods before the mandate started. A history of unfiled returns is not inherited as a debt, but it does block the returns that come after it, so it has to be cleared first;
• anything after the mandate has ended. The end has a fixed form: the representative notifies ANAF in writing and names the last VAT return it files, and the mandate cannot end before that return is due (point 89(6)).

One limit works against the foreign company. Because only one representative is allowed for all Romanian operations, a company cannot keep a risky flow outside the mandate. The representative sees everything, or it does not accept.

Why representatives ask for a guarantee

The arithmetic is simple. A representative’s fee for a year is a small fraction of the VAT that passes through the returns it signs. If one month’s VAT is not paid, the fee for several years does not cover it.

Four situations produce the exposure in real life:

1. The VAT is declared but not funded. The return shows RON 80,000 to pay on the 25th, and the money from abroad arrives on the 5th of the next month, or does not arrive. ANAF’s claim is against the representative from the 26th.
2. Sales come to light later. Platform reports, e-Factura data or an audit reveal sales that were not on the list sent each month. The VAT, plus interest and the non-declaration penalty, is assessed on the code the representative answers for.
3. Input VAT is refused. A purchase invoice turns out not to qualify for deduction, and a refund already received has to be paid back.
4. The client goes silent. The company stops trading in Romania and stops answering, while the registration is still open and returns are still due.

In each case the representative’s assets are in Romania and reachable by enforcement, while the client’s are abroad. A guarantee closes that gap. The other answer representatives give is to decline: the onboarding review of the business, its flows and its counterparties exists for the same reason.

The Fiscal Code does not ask for any guarantee to be lodged with ANAF for VAT representation; it does so only in other areas, such as fiscal representatives for excise goods. What is described below is therefore contractual practice between the company and its representative, and it varies from one firm to another.

The forms a guarantee takes

Cash deposit. The simplest form: an amount equal to one or two months of the VAT the company is expected to pay, held by the representative for the duration of the mandate and used only if a VAT payment is not funded on time. It costs the client nothing except the use of the money.

Bank guarantee letter. A bank undertakes to pay the representative, on first demand and up to a ceiling, if the client defaults. The client keeps its cash but pays the bank a commission, and the bank usually wants collateral or a credit line. It suits larger amounts and groups with an existing banking relationship; the letter has an expiry date and has to be renewed in time.

Pre-funding of each payment. Not a guarantee in the strict sense, but the safeguard that does most of the work: the amount of VAT due is sent to the representative, or paid directly to the Treasury account, some days before the 25th, and the return is filed once the payment is covered.

Parent company guarantee. A written undertaking by the parent. It is cheap, and it is only as good as the parent and the jurisdiction in which it would have to be enforced, so it is usually accepted alongside one of the forms above, not instead of them.

How the amount is set

The base is the net VAT the company expects to pay per month, not its turnover. An illustrative calculation: a seller expects output VAT of RON 84,000 a month and input VAT of RON 30,000, so about RON 54,000 a month to pay. One to two months gives a guarantee of RON 54,000 to 108,000.

The result moves with the facts:

• a company in a steady refund position, typically an importer paying 21% import VAT at customs and selling over several months, exposes its representative to very little and is asked for less;
• a high share of consumer sales raises the figure, because those sales are not visible in e-Factura and rest on the client’s own reports;
• seasonality matters: the guarantee is sized on the busy months;
• a track record lowers it. Many agreements provide for a review after the first year of on-time funding.

Getting it back

The agreement should say when the guarantee is released: normally after the last return is filed, the final balance is paid or refunded, and the end of the mandate has been notified to ANAF. Keep in mind that the tax authority may assess VAT within five years, counted from 1 July of the year after the one the tax relates to (article 110 of the Tax Procedure Code). Some representatives therefore retain part of the guarantee, or accept a bank guarantee in its place, for a period after the mandate ends. That period and the amount are worth negotiating before signing, not at the exit.

What a representative checks before accepting

Expect questions, and treat them as a good sign:

• who owns the company and who runs it, with documents;
• what is sold, to whom, through which channels, and in what volumes;
• where the goods come from and where they are stored, with the warehouse or fulfilment contract;
• how sales data will be delivered, in what format and by what date each month;
• whether there is any Romanian tax history: a previous registration, another representative, unfiled periods;
• who will fund the VAT payments and from which account.

A representative that asks none of this is either not reading the law or not planning to be around when ANAF calls.

What the agreement should contain

The norms require a contract “showing the extent of the mandate”, and the representative’s written acceptance stating the nature of the operations. Beyond that minimum, a workable agreement covers:

• the operations covered and the obligation to report all Romanian operations;
• the monthly data cut-off and the format of the data;
• when and how each VAT payment is funded;
• the guarantee: form, amount, when it may be drawn on, when it is reviewed and when it is released;
• access to documents for a tax audit, including after the mandate ends;
• grounds for termination on each side, and the hand-over to a new representative;
• the representative’s professional indemnity insurance.

Is there a way around it?

For a company established in the EU, yes: it registers directly and uses a mandated agent for the filings. The agent prepares and files; the company stays the person liable, so no guarantee is involved.

For a company established outside the EU, the alternative to a representative is not an agent but a different legal situation: a fixed establishment or a Romanian subsidiary that buys and resells. Both change far more than the VAT registration, from invoicing through RO e-Factura to bookkeeping and corporate tax, and neither should be chosen to save a deposit.

A company that already has a representative and is unhappy with it can change. The outgoing representative files its last return, the incoming one takes over the VAT history, and the guarantee is settled with the first and constituted with the second.

How this works with us

We act as fiscal representative for companies established outside the EU and as mandated agent for companies established in the EU. Before accepting a mandate we review the business and its flows, and we answer in writing, together with the quote, on whether we can act and on what terms. Returns are prepared from your data, cross-checked against e-Factura and SAF-T, and filed by a licensed adviser; TaxOlia holds professional indemnity insurance.

The service itself is described on the fiscal representation page. If the reason you need a representative is stock in Romania, read the guide to selling from a Romanian warehouse next, then request a quote: the first consultation is free and without obligation.