VAT refunds: when the exception risks becoming the rule

The expansion of the criteria used by the National Agency for Fiscal Administration (ANAF) to identify the risk of an undue VAT refund could lead to an increase in the number of companies that recover VAT only after a tax audit. The amendments apply starting with the VAT returns for September and the third quarter of 2026 and include new situations in which a refund claim may be regarded as presenting a risk of undue refund, ranging from an increase in the amount claimed and the tax position of certain persons related to the company to risks identified at supplier level. At the same time, it remains unclear what “significant” means in practice and how the period from which the amount claimed for refund originates can be established when applying the risk criteria, according to the specialists of TPA Romania, a leading Central and Eastern European company specialising in accounting, tax, financial audit and legal advisory services.

In September and October 2026, ANAF issued two orders amending the VAT refund procedure. Although the basic architecture of the procedure remains unchanged, the criteria that may indicate a risk of undue refund have been expanded. For taxpayers presenting such a risk, negative VAT returns are generally settled after a tax audit has been carried out.

Under the new procedure, the risk of an undue VAT refund arises, for example, where the amount claimed for refund increases significantly compared with previous periods or where significant shareholders, directors or other legal entities owned by them appear in ANAF’s special database concerning the risk of undue VAT refunds. The risk may also be identified if at least one supplier from whose invoices a significant proportion of deductible VAT originates is in a situation indicating a potential tax risk. These are only some of the criteria laid down by the procedure, the full list being considerably broader.

“With these amendments, I expect the incidence of VAT refunds subject to a subsequent audit to decrease. The reason is simple: a larger number of taxpayers claiming VAT refunds may fall within at least one of the risk situations provided for by the new procedure, which may result in the VAT return being settled only after a tax audit. However, such classification does not, in itself, mean that the amounts are being claimed unduly,” explains Nina Chețe, Tax Senior Manager at TPA Romania. 

How is the significance threshold established?

An important source of uncertainty in the VAT refund procedure is the frequent use of the term “significant” without establishing a value or percentage threshold. The requirement of being “significant” is used in relation to participants in the taxable person’s share capital, the impact of VAT adjustments on the amount claimed for refund, the increase in the amount claimed compared with previous periods, the impact of frequent corrections of clerical errors, discrepancies between the data reported in VAT returns and the information in RO e-Invoice or RO e-Cash Registers, as well as the proportion of deductible VAT originating from invoices issued by suppliers included in the special database concerning the risk of undue VAT refunds.

“In future amendments to the procedure, ANAF should clarify how the ‘significance’ is assessed for each criterion using this term: shareholdings, the impact of VAT adjustments and corrections of errors, increases in the amounts claimed for refund, discrepancies between declared data and data reported through electronic systems, and the proportion of deductible VAT originating from suppliers covered by the procedure. In each case, the applicable thresholds and, where appropriate, the calculation bases, reference periods and comparison terms should be specified so that taxpayers can understand and anticipate their classification within the risk situations. In addition, for the purpose of determining the significant proportion of deductible VAT, it should be clarified whether and how VAT recorded by the taxpayer under the reverse-charge mechanism is taken into account,” says Daniela Zar, Partner at TPA Romania.

A potential issue in relation to the operation of the VAT system 

Another aspect requiring attention concerns the application of the risk criteria by reference to the “period from which the amount claimed for refund originates”. The procedure provides for a template reconstructing the negative VAT amount, based on successive VAT returns, as well as the completion instructions. However, the existence of this mechanism, introduced before the approval of the new risk criteria, does not remove the need for explanations on the use of the period thus determined for each risk criterion or for provisions addressing the specific features of these criteria, including the identification of significant suppliers and the calculation of the significant proportion of deductible VAT.

The complexity of negative VAT balances formed through successive carryforwards is also reflected in Decision No. 6/2026 of the High Court of Cassation and Justice. In its reasoning, the court describes the integration of carriedforward amounts into subsequent VAT returns and their “depersonalisation”. However, the decision concerns the non-applicability of a limitation period to the right to carry forward the negative VAT amount and it is not intended to settle the administrative criteria for determining the origin of the negative VAT amount, clarification of which could have been useful for the risk analysis.

“In my view, the issue of the period from which the amount claimed for refund originates may give rise to significant interpretation and implementation difficulties. I would not be surprised if, in the near future, we were to see a request for a preliminary ruling before the Court of Justice of the European Union raising the question whether such a concept is compatible with the functioning of the VAT system,” states Nina Chețe.

If this period cannot be determined with certainty, it may be argued that the risk criteria depending on it are built on a concept whose use may be challenged. For this reason, it is important for the tax authorities to reassess the risk criteria and clarify potentially ambiguous aspects, so that each risk criterion can be applied consistently and predictably and its impact on the settlement of a refund claim can be determined with certainty, according to the specialists of TPA Romania.

Tax risk and the “contamination effect”

The new criteria may also extend tax risk through a “contamination effect”: the risk of an undue refund identified in relation to a person who claimed a VAT refund may cause another person claiming a VAT refund to be classified as presenting the same risk.

Persons included in ANAF’s special database concerning the risk of undue VAT refunds may, under certain conditions, trigger the same risk for refund claims submitted by entities they own, companies with common shareholders or customers. In these situations, the VAT returns of the listed entities and persons may be settled after a tax audit. According to the specialists of TPA Romania, this expansion of the risk, together with the additional risk criteria, could increase the proportion of VAT returns settled after a tax audit.

Impact on tax audit activity

According to ANAF’s performance report, the combined number of tax audits and desk audits increased by 134% in 2025 compared with 2020. Desk audits accounted for an increasingly important share of control activity, representing more than 64% of all tax audits in 2025, while the number of audits carried out per inspector increased from 12 in 2021 to 28 in 2025.

“If the application of the new risk criteria generates a larger number of audits for settling VAT refund claims, the pressure on the audit structures will increase. Managing this pressure would require additional staff or the reallocation of resources within ANAF by directing teams of tax inspectors towards this type of tax audit. In such a scenario, ANAF’s audit strategy may need to be adjusted by prioritising resources for the tax audits required to settle VAT refund claims, to the detriment of other types of tax audits,” says Daniela Zar, Partner at TPA Romania.

Will refunds subject to a subsequent audit remain, in practice, the rule?

The Fiscal Procedure Code establishes VAT refunds followed by a subsequent tax audit as the rule, while VAT refunds with a prior tax audit represent the exception. If, following the application of the new risk criteria, a significant proportion of refund claims is settled only after a tax audit, the question arises whether refunds subject to a subsequent audit will, in practice, continue to represent the rule.

This new approach of the tax authorities may place additional pressure on companies through the time and resources allocated to preparing documents and managing tax audits. Any extension of the VAT recovery period would affect cash flows and generate additional financing costs, particularly for businesses making significant investments or regularly accumulating recoverable VAT balances. Therefore, clarity of the criteria and predictability as regards the application of the procedure become essential for taxpayers’ financial planning.