Tax authorities in Romania issue caution to businesses regarding unjustified personal expenditure write-offs
Crackdown on Personal Expenses Claimed as Business Expenses in Romania
The National Agency for Fiscal Administration (ANAF) in Romania has identified an increasing number of taxpayers recording personal-use purchases as business expenses, thereby improperly deducting Value-Added Tax (VAT) [1]. This practice, which is relatively common in Romania, causes distortions in the tax base and reduces the declared and paid taxes or fees.
In response, ANAF has initiated enhanced monitoring through digitalization and plans a national campaign involving notifications, verifications, and potentially wider inspections to enforce compliance [1]. The agency's digital systems now allow for the cross-referencing of taxpayer data, potentially helping to identify companies that record personal purchases as business expenses.
The campaign aims to correct reported inconsistencies and ensure that taxes are declared and paid accurately. Companies that continue to engage in this practice may be targeted during the campaign for audits or inspections. Inaccurate reporting may lead to financial penalties following these audits or inspections by ANAF.
The consequences of non-compliance include significant financial penalties. The exact penalty amounts are not specified in the sources but are implied to be substantial enough to warrant a public warning from ANAF [1]. Additionally, failure to comply with other tax regulations related to VAT invoicing can result in fines, such as a 15% penalty on the invoice value for non-compliance with e-invoicing rules starting July 2025 [4].
The Romania National Agency for Fiscal Administration's efforts reflect a strong intent to improve tax compliance and reduce misuse of VAT deductions [1][4]. Compliance with fiscal regulations is crucial to avoid financial penalties and maintain business operations without disruptions.
ANAF emphasized that all companies must ensure accurate reporting and avoid including non-business-related expenses in their tax declarations. The agency's digitalisation initiatives have enhanced its monitoring capabilities, making it more difficult for companies to engage in tax fraud or evasion.
The campaign launched by ANAF serves as a reminder for companies to maintain accurate and honest reporting practices to avoid potential penalties. The issue of personal expenses being claimed as business expenses for VAT deductions is substantial enough to be a priority for tax authorities, as highlighted by the increasing number of taxpayers detected by ANAF.
Businesses in Romania should ensure their expenses are genuinely related to their operations to avoid financial penalties, as the National Agency for Fiscal Administration (ANAF) cracks down on misuse of Value-Added Tax (VAT) deductions, particularly personal expenses claimed as business expenses. The ANAF's digitalization initiatives have made it increasingly challenging for companies to engage in tax fraud or evasion, stressing the importance of compliance with fiscal regulations in the financial sector.
