Romania to extend VAT reverse charge to fruit and veg

Romania has one of the most stubborn VAT Gap’s: it still loses approximately one-third of the VAT that should be collected, and in 2022 (latest EU VAT Gap estimate), the nominal value of these losses exceeded €8 billion.  Romania introduced e-invoicing at the start of this year, and may chose to see what revenue improvements this produces before opting for full reverse charge.

The Ministry of Finance is planning to expand the reverse charge mechanism for VAT to include the fruit and vegetable sector, aiming to tighten controls in areas vulnerable to tax fraud. This proposal comes in response to Romania’s persistently high VAT gap—the largest in the European Union.

Unlike a generalised reverse charge mechanism, which requires years of negotiation and cannot be implemented before the EU’s broader VAT reforms in 2030, a targeted approach in high-risk sectors could be rolled out much sooner—potentially as early as next year.

The urgency behind this proposal is underscored by Romania’s significant VAT revenue shortfall. According to the European Commission’s latest report, Romania had a VAT gap of 30.6% in 2022—equivalent to RON 41.8 billion (around EUR 8 billion). Although this marks a slight improvement from the 34.8% gap recorded in 2021, it still places Romania at the bottom of the EU in terms of VAT collection efficiency.

Current Romanian reverse charge adoption

Beyond the general reverse charge on cross-border B2B services, Romania has opted to adopt the reverse charge in accordance with the provisions of the EU VAT Directive:

• General Reverse Charge (Art 194 VAT Directive) when a supplier is not established in Romania and their customer is.  Even if a non-resident customer has a Romanian VAT number, the reverse charge applies.
• Specific Reverse Charge (art 199 VAT Directive) for a range of high-risk suppliers: energy certificates; construction; laptops, mobile phones, tablets, PC parts etc; precious metals; greenhouse gas trading; and more.

See more in our Romanian VAT guide.

Optional general reverse charge

The reverse charge mechanism is a measure that aims to reduce the risk of VAT fraud, and particularly Missing Trader Intra-Community fraud, by shifting liability for VAT payment from the vendor to the customer. This type of fraud occurs when a trader acquires goods, transported or dispatched from another Member State, and exempt from VAT, and sells them on including VAT on the invoice to the customer. After having received the VAT amount from the customer, the trader disappears before paying the VAT due to the tax authorities.

EU VAT General and Domestic Reverse Charge rule by country