VAT on business expenses: rates, the 50% cap and the right to deduct
Since 1 August 2025 there are two Romanian rates — 21% standard and 11% reduced. 4expenses reads the rate off the document, keeps it tied to the document date, and separates deductible from non-deductible VAT in the export, including where the law halves the deduction.
How the right VAT figure reaches accounting
The rate is read, not assumed
OCR capture pulls the supplier, date, amount and VAT from the receipt or invoice. The rate stays the one on the document rather than a default applied by the app.
The rate that applied on the document date
The 21% and 11% rates apply from 1 August 2025 (Law 141/2025). An older document keeps the rate valid on its own date, so reports spanning different periods do not get mixed up.
The 50% vehicle cap
For motorised road vehicles up to 3,500 kg with at most 9 seats including the driver's, that are not used exclusively for the economic activity, the right to deduct VAT is limited to 50% (art. 298(1)) — fuel and maintenance included.
The exceptions where the cap does not apply
Art. 298(3) expressly exempts categories such as emergency vehicles, those used by sales and purchasing agents, paid passenger transport including taxi, paid services such as rental and driving schools, and vehicles held for resale. For the rest of the fleet, full deduction requires exclusive business use evidenced by a trip log.
Invoices tracked apart from receipts
The right to deduct VAT is exercised on the basis of an invoice (art. 299). One exception matters in practice: a till receipt of at most EUR 100 carrying the buyer's VAT number is a simplified invoice and does confer the right to deduct. Other lines with deducted VAT backed only by a plain receipt can be checked before export.
Export by rate and by account
The accounting export groups expenses by VAT rate and separates the non-deductible portion, with the cost centre on every line.
The application does not decide the VAT treatment on the accountant's behalf — it documents it. Each line keeps the rate captured from the document, the base, the VAT, the deduction percentage applied and the document supporting it: exactly what a purchase-journal review asks for.
Frequently asked questions about VAT on expenses
The tax and legal information on this page was verified on 30 July 2026 and is provided for information only — it is not tax advice. Legislation changes and its application depends on your company's specific situation: confirm with your accountant or adviser before acting on it.
See also
Close the month with the purchase journal already checked
Rates read from the document, caps applied per category, and lines without an invoice flagged before export.