Romania: Fiscal inactivity risks and VAT code cancellation

Romanian businesses face increased risks regarding fiscal inactivity due to stricter conditions set for 2026. A primary cause for being declared fiscally inactive is the failure to submit annual financial statements. Experts note that companies have a strict five-month window following the filing deadline to submit these documents to avoid repercussions.

Consequences of fiscal inactivity include the cancellation of the VAT code, which prevents companies from deducting VAT, the non-deductibility of expenses, and the requirement to collect VAT immediately upon invoicing. Additionally, it can lead to a negative fiscal record for administrators and a loss of credibility with business partners. Even during periods of inactivity, all declaration and payment obligations remain valid.

Separate legal concerns have been raised regarding the automatic cancellation of VAT codes by ANAF. In some instances, tax authorities have cancelled registrations based on entries in an administrator's criminal record, even when criminal liability had expired through prescription. Legal analysis suggests that such cancellations require specific legal premises, individualization of the person and act, and complete motivation of the administrative act.