Judgment;Summary — ECLI:EU:C:2024:866
Date: 2024-10-04
Language of the case: Romanian
Court formation: Ninth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Romania

Translation C-475/23 – 1 
Case C-475/23 
Request for a preliminary ruling 
Date lodged: 
25 July 2023 
Referring court: 
Curtea de Apel Cluj (Romania) 
Date of the decision to refer: 
3 July 2023 
Applicant and appellant 
Voestalpine Giesserei Linz 
Defendants and respondents 
Administrația Județeană a Finanțelor Publice Cluj 
Direcția Generală Regională a Finanțelor Publice Cluj-Napoca 
  
[…] 
CURTEA DE APEL CLUJ 
SECȚIA A III-A CONTENCIOS ADMINISTRATIV ȘI FISCAL 
(Court of Appeal, Cluj, Third Division for Administrative and Tax Matters) 
[…] ORDER 
Public hearing of 3 July 2023 
[…] 
The appeal lodged by the appellant VOESTALPINE GIESSEREI LINZ GMBH 
against civil judgment No 9/2023 delivered on 9 January 2023 by the Tribunalul 
Cluj (Regional Court, Cluj) […] in proceedings against the respondents 
ADMINISTRAȚIA JUDEȚEANĂ A FINANȚELOR PUBLICE CLUJ (Regional 
Public Finance Administration, Cluj) and DIRECȚIA GENERALĂ 
REGIONALĂ A FINANȚELOR PUBLICE CLUJ-NAPOCA (Regional 
Directorate-General of Public Finances, Cluj-Napoca) — concerning an appeal 
against a tax administrative act - decision No 35/3.2.2022, assessment notice F-CJ 
855/11.10.2021 and tax inspection report — was examined. 
EN 
REQUEST FOR A PRELIMINARY RULING OF 3. 7. 2023 – CASE C-475/23 
 
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The course of the proceedings, the arguments and the forms of order sought by the 
parties were recorded in the minutes of the hearing of 19 June 2023, whereupon 
the court, which required time to give its decision and to give the parties the 
opportunity to submit written observations, stayed the proceedings following a 
request for a preliminary ruling from the Court of Justice of the European Union 
[…] on 3 July 2023. 
THE COURT 
I. Succinct presentation of the facts and procedure in the main 
proceedings 
1. In this case, the appellant – VOESTALPINE GIESSEREI LINZ GMBH 
(‘Voestalpine’) – sought, in proceedings against the respondents – THE 
REGIONAL DIRECTORATE-GENERAL OF PUBLIC FINANCES, CLUJ-
NAPOCA, and THE REGIONAL PUBLIC FINANCE ADMINISTRATION, 
CLUJ – the annulment of assessment notice F-CJ_855/11.10.2021 rejecting the 
appellant’s request for a refund of VAT in the amount of Romanian lei 
(RON) 282 601. 
2. The appellant is a legal person resident in Austria and is part of the 
Voestalpine group, active in the production of various cast products weighing over 
10 tonnes. The appellant is registered for VAT in Romania. The appellant sends 
various parts to Romania for processing, declaring an intra-Community 
acquisition. The parts are processed in Romania by the staff of the Romanian 
company ‘Global Energy Products’ SA (‘GEP’), which is a subcontractor of 
Austrex Handels GmbH (‘Austrex’). After the transactions are carried out by 
GEP, the parts are dispatched and invoiced by Voestalpine […] to Voestalpine 
Austria and other customers in the EU area. 
3. On 24 March 2021, the appellant was automatically registered as having a 
permanent establishment from 24 March 2021 onwards. Disagreeing with that 
decision by the tax authorities, the appellant appealed against it, and by civil 
judgment No 2014/21.7.2022 of the Regional Court Cluj […], which became final 
pursuant to judgment No 1135/10.11.2022 of the Cluj Court of Appeal, it was held 
that the appellant’s registration as having a permanent establishment in Romania 
was lawful. 
4. A framework contract for the supply of goods was concluded between the 
appellant and the subsidiary Austrex, under which Austrex, as the supplier of 
steel-product processing activities, in particular the cast products of Voestalpine 
Giesserei, in Austria and Romania, undertook to fulfil the appellant’s orders for 
goods and services, and was given authority to use another company, namely 
GEP, for that purpose. In order to provide those services, the appellant granted 
[the company] Austrex a right of enjoyment, transferable to GEP, of a building 
situated in Cluj-Napoca, which the appellant in turn leased from ‘Voestalpine 
România’ Srl (subsequently, in 2016, the appellant purchased the property). The 
VOESTALPINE GIESSEREI LINZ 
 
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subject matter of the contract consists, inter alia, in the processing, testing, 
polishing, electric arc welding, welding by other means, sand-blasting and heat 
treatment of cast products. 
5. The appellant and Austrex concluded a loan agreement concerning the 
building situated at Bd. (avenue) Muncii No 18, Cluj-Napoca. Under the 
contractual provisions, routine maintenance work on the building and on the 
equipment located therein was the responsibility of Austrex, while repairs for 
serious damage or substantial deterioration were the appellant’s responsibility. 
6. For June 2021 the appellant recorded a deficit with option for a refund, and 
it was therefore the subject of an advance tax inspection. The VAT refund 
concerned the following invoices: delivery of 50-tonne bridge crane; assembly, 
commissioning of 50-tonne bridge crane and approval by ISCIR [State 
inspectorate of boilers, pressure vessels and lifting equipment]; rental of load mass 
test stand; fifth inspection of 50-tonne crane; repair of crane in the warehouse 
located at No 18 Bd. Muncii. Specifically, the refund requested concerns the 
purchase of a crane which the applicant placed in the building that was made 
available to [the companies] Austrex and GEP, a crane used in the operations 
carried out on the appellant’s parts by employees of [the company] GEP. 
7. The tax authorities found that even though, at the time of the refund 
application, the appellant was registered with a permanent establishment in 
Romania, it did not act as such from an accounting or tax point of view and did 
not draw up accounting statements showing the revenue and costs entered in the 
accounts. Taking this into account, as well as the fact that the premises are made 
available to the company Austrex free of charge, the tax inspection unit took the 
view that the appellant had not provided evidence that the purchases in question 
had been made for the purposes of carrying out its economic activity, which is 
why it was not granted the right to deduct the sum of RON 282 601. 
8. The appellant challenged the tax assessment rejecting the application for a 
VAT refund, as set out in paragraph 1. 
9. By civil judgment No 9/2023 of the Cluj Regional Court, the appellant’s 
action was dismissed at first instance. In arriving at that conclusion, the Regional 
Court held, in essence, that the appellant had failed to provide evidence that the 
purchases in respect of which it had sought deduction of VAT had been made for 
the purposes of its taxable transactions, in view of the fact that the documents 
made available to the tax authorities did not show any revenue generated by the 
appellant as a result of its activity in Romania. Similarly, it was considered that 
the activity carried out in Romania generated revenue for the appellant only 
indirectly; Austrex and its subcontractor, GEP, were the direct beneficiaries, and 
they both issued invoices for operations for which the crane was used. 
10. The appellant appealed against judgment No 9/2023 of the Cluj Regional 
Court. In the course of the appeal proceedings, the appellate court raised the 
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question of how to interpret the EU law applicable in the present case and invited 
the parties to consider the need to make a reference to the Court of Justice of the 
European Union for a preliminary ruling. 
II. Provisions of national law relied on 
11. Pursuant to Article 297(4)(a) of the Codul fiscal (Tax Code): 
Every taxable person has the right to deduct tax on purchases where they are 
intended for the following transactions: taxable transactions.  
12. Pursuant to point 67 of the Normele metodologice (Methodological 
standards) for the implementation of Title VII of the Tax Code, approved by 
Hotărârea Guvernului No 1/2016 (Government Order No 1/2016): 
(1) The right of taxable persons to deduct the tax paid or payable on 
goods/services purchased which are intended to be used for the purposes of the 
transactions referred to in Article 297(4) of the Tax Code is a fundamental 
principle of the VAT system. The right of deduction laid down in Article 297 of the 
Tax Code is an integral part of the VAT scheme and in principle may not be 
limited. That right shall be exercised immediately in respect of all the taxes 
charged on transactions relating to inputs. In order to benefit from the right of 
deduction, the substantive conditions must first be satisfied, as is clear from the 
case-law of the Court of Justice of the European Union. First, the person 
concerned must be a taxable person under Title VII of the Tax Code and, 
secondly, the goods or services relied on to give entitlement to that right must be 
used by the taxable person for the purposes of the transactions referred to in 
Article 297(4) of the Tax Code and, as inputs, those goods or services must be 
supplied by another taxable person. 
(2) According to the settled case-law of the Court of Justice of the European 
Union, the competent tax authorities may refuse to grant the right of deduction 
where it is shown, in the light of objective factors, that that right is being relied on 
for fraudulent or abusive ends. 
(3) The relevant case-law of the Court of Justice [of the European Union] for 
the purposes of applying paragraph 2 shall include, by way of example, the 
judgments in Bonik, C-285/11, and PPUH, C-277/14. 
13. Article 8(1) and (6) of the Tax Code provides: 
(1) For the purposes of this Code, a permanent establishment is a place where 
all or part of a non-resident’s activity is carried out, either directly or through an 
employee. The definition of ‘permanent establishment’ takes into account the 
commentary on Article 5 ‘Permanent establishment’ of the Model Double 
Taxation Convention of the Organisation for Economic Co-operation and 
Development. 
VOESTALPINE GIESSEREI LINZ 
 
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(6) A non-resident shall not be regarded as having a permanent establishment 
in Romania if he or she carries on his or her activities in Romania only through a 
broker, agent, general commission agent or intermediary with an independent 
status, where that activity is the agent’s usual activity, in accordance with the 
description given in the constitutional documents. Where the activities of such an 
agent are carried out wholly or almost entirely in the name of the non-resident, 
and conditions existing in the commercial and financial relations between the 
non-resident and the agent differ from those which would exist between 
independent persons, that agent shall not be regarded as an independent agent. 
III. Succinct presentation of the reasoning in the request for a preliminary 
ruling 
14. The Court of Appeal considers that, in the present case, the refusal of the tax 
authorities to recognise the right to deduct VAT was based on two main 
arguments: first, that the expenditure in respect of which the right to deduct was 
exercised was for the benefit of the taxable transactions of the appellant’s 
subcontractors and not for that of the appellant’s taxable transactions; secondly, 
that the appellant did not keep separate accounts for the permanent establishment 
in Romania and, for that reason, the tax authorities could not verify the labour 
costs applicable to the cast products owned by the appellant or, for that matter, the 
entire processing activity carried out on Romanian territory. 
15. In that context, the Court of Appeal considers that two questions arise as to 
how the provisions of Title X of Council Directive 2006/112/EC on the right of 
deduction of VAT should be interpreted. 
16. The first issue concerns the person who has the right of deduction of VAT in 
the present case, where the appellant has purchased an asset that it has made 
available to a subcontractor that carries out activities in favour of the appellant, 
which are then invoiced in terms of the latter. Two interpretations are possible: 
first, that the appellant has purchased the asset for the purposes of its taxable 
transactions, so that it is necessary for it to make the asset available in order for 
the subcontractor to be able to carry out the activity; secondly, that the asset is not 
used in service of the appellant’s taxable transactions, but that of the taxable 
transactions of the subcontractor which, in practice, has been aided free of charge 
by the appellant to carry out the activities that, subsequently, are invoiced to the 
appellant, and with the subcontractor receiving the same cost as if it had held the 
asset from the outset. 
17. Closely related to this issue is the possibility of limiting the right of 
deduction on the ground that the appellant refused to keep separate accounts for 
its permanent establishment in Romania. The tax authorities maintain that that 
omission on the part of the appellant made it impossible to verify the labour costs 
for the parts brought into Romania. In that context, it should be noted that any 
answer to the question referred to in the preceding paragraph, namely whether the 
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purchase of the crane benefits the appellant, which pays lower labour costs than [it 
would have paid] if the subcontractor had purchased the crane, or, on the contrary, 
whether it pays the same costs, in which case it is the subcontractor that benefits 
from the purchase of the crane, depends precisely on the examination of the labour 
costs. 
IV. Questions referred for a preliminary ruling 
1[8]. In the light of the foregoing, the Court of Appeal considers it necessary to 
refer the following questions to the Court of Justice of the European Union for a 
preliminary ruling: 
[…] [the text of the questions is set out in the operative part below] 
THE COURT ORDERS THAT 
The following questions are hereby referred to the Court of Justice of the 
European Union for a preliminary ruling pursuant to Article 267 TFEU: 
1. Do the provisions of Council Directive 2006/112/EC on the right to deduct 
VAT preclude a national practice whereby, if a company purchases goods which it 
then makes available to a subcontractor free of charge so that the subcontractor 
may carry out activities for the first company, that company is refused the right to 
deduct the VAT on the goods purchased, on the grounds that the purchase is 
deemed not to be for the purposes of its own taxable transactions but for the 
purposes of the subcontractor’s taxable transactions? 
2. Do the provisions of Council Directive 2006/112/EC on the right to deduct 
VAT preclude a national practice whereby a taxable person is refused the right to 
made deductions on the grounds that he or she has not kept separate accounts for 
his or her permanent establishment in Romania, thus preventing the tax 
authorities from verifying the costs of the labour used for the cast products of 
which the owner is [that taxable person], let alone the entire processing activity 
carried out in Romanian territory? 
[…] [procedural provisions; signatures]