Romania cracks down on cross-border VAT fraud with tougher penalties
Romania has introduced stricter penalties for cross-border VAT fraud under a new law. Law No. 125/2023, which took effect on 25 May 2023, aligns with an EU directive targeting large-scale tax evasion. Offenders now face criminal charges, including possible imprisonment, if fraud exceeds €10 million (US$10.6 million). The legislation implements EU Council Directive 2017/1371, which requires member states to criminalise serious VAT fraud. Romania's law defines specific fraudulent activities that trigger prosecution. These include schemes causing significant financial losses across borders.
Under the new rules, individuals or businesses found guilty of such fraud face severe consequences. The threshold for criminal liability is set at a minimum loss of €10 million. Authorities aim to deter large-scale evasion by enforcing harsher penalties. While the directive applies across the EU, adoption varies by country. As of March 2026, public records do not confirm how many of the 27 member states have fully implemented matching national laws.
The law strengthens Romania's ability to combat VAT fraud in line with EU standards. Criminal sanctions now apply to cases involving losses over €10 million. This move reflects broader efforts to close loopholes in cross-border tax enforcement.
