Summary;Judgment — ECLI:EU:C:2024:499
Date: 2024-06-13
Language of the case: Romanian
Court formation: Ninth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Romania

Summary C-696/22 – 1 
Case C-696/22 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
8 November 2022 
Referring court: 
Curtea de Apel Cluj (Romania) 
Date of the decision to refer: 
15 July 2021 
Appellant: 
C SPRL 
Respondents: 
Administrația Județeană a Finanțelor Publice (AJFP) Cluj 
Direcția Generală Regională a Finanțelor Publice (DGRFP) Cluj-
Napoca 
  
Subject matter of the main proceedings 
Administrative appeal brought by the appellant, C SPRL, against the respondents, 
the [Administrația Județeană a Finanțelor Publice (AJFP) Cluj (District 
Administration of Public Finances, Cluj, Romania) (‘the AJFP Cluj’)] and the 
[Direcția Generală Regională a Finanțelor Publice (DGRFP) Cluj-Napoca 
(Regional Directorate-General of Public Finances, Cluj-Napoca) (‘the DGRFP 
Cluj-Napoca’ or ‘the complaints body’)], for the partial annulment of the VAT 
notice of assessment issued by the AJFP Cluj and the decision on the complaint 
lodged against that notice of assessment, issued by the DGRFP Cluj-Napoca 
Subject matter and legal basis of the request 
On the basis of Article 267 TFEU, the Curtea de Apel Cluj (Court of Appeal, Cluj, 
Romania) seeks the interpretation of Articles 63, 64 and 66 of Directive 
2006/112/EC, as well as the principle of respect for the rights of the defence 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-696/22 
 
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Questions referred 
(1) Do Articles 63, 64 and 66 of Council Directive 2006/112/EC on the 
common system of value added tax preclude an administrative practice of a tax 
authority – such as the one in the present case, which imposed additional payment 
obligations on the taxable person, a professional limited liability company (SPRL) 
through which administrators of insolvency proceedings may exercise their 
profession – consisting in defining the chargeable event and the chargeability as 
being at the time at which the services were provided in the context of insolvency 
proceedings, where the insolvency administrator’s fee was determined by the 
insolvency court or the assembly of creditors, with the result that the taxable 
person is obliged to issue invoices no later than the fifteenth day of the month 
following the month in which the chargeable event occurred? 
(2) Do Articles 63, 64 and 66 of Council Directive 2006/112/EC on the 
common system of value added tax preclude an administrative practice of a tax 
authority, such as the one in the present case, consisting in imposing additional 
payment obligations on the taxable person – a professional limited liability 
company (SPRL) through which administrators of insolvency proceedings may 
exercise their profession – in so far as that taxable person issued invoices and 
collected VAT only on the date on which payments were received for services 
provided in the context of insolvency proceedings, even though the general 
assembly of creditors established that the payment of the insolvency 
administrator’s fee is subject to the availability of liquid assets in the debtors’ 
accounts? 
(3) In the case of a co-branding agreement between a law firm and the taxable 
person, is it sufficient, for the purpose of granting the right to deduct, that the 
taxable person, when proving the existence of a direct and immediate link 
between the purchases made by the upstream taxable person and the downstream 
transactions, demonstrate, after the agreement, an increase in the turnover/value of 
the taxable transactions, without further supporting documentation? If so, what are 
the criteria to be taken into account in order to determine the actual scope of the 
right to deduct? 
(4) Is the general EU-law principle of respect for the rights of the defence to be 
interpreted as meaning that, where, in the course of a national administrative 
procedure for ruling on a complaint against a notice of assessment that has 
established the payment of additional VAT, new factual and legal arguments are 
accepted as compared with those contained in the tax audit report on the basis of 
which the notice of assessment was issued, and the taxable person has been 
granted interim judicial protection measures, pending the decision of the court 
dealing with the substance of the case, by suspending the debt, the court hearing 
the action may take the view that there has been no breach of that principle 
without examining whether the outcome of that procedure might have been 
different, had it not been for such an irregularity? 
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Provisions of European Union law and case-law relied on 
Council Directive 2006/112/EC of 28 November 2006 on the common system of 
value added tax (OJ 2006 L 347, p. 1), as amended (‘the VAT Directive’); 
Articles 63, 64, 66, 168; 
Judgment of 19 September 2000, Schmeink & Cofreth and Strobel (C-454/98, 
paragraph 59); 
Judgment of 21 February 2006, BUPA Hospitals and Goldsborough 
Developments (C-419/02, paragraph 45); 
Judgment of 18 July 2013, AES-3C Maritza East 1 (C-124/12); 
Judgment of 3 July 2014, Kamino International Logistics and Datema Hellmann 
Worldwide Logistics (C-129/13 and C-130/13, paragraphs 73, 78 and 79); 
Judgment of 3 September 2015, Asparuhovo Lake Investment Company 
(C-463/14, paragraph 35); 
Judgment of 9 November 2017, Ispas (C-298/16, paragraph 37); 
Judgment of 29 November 2018, Finanzamt Goslar (C-548/17, paragraph 28); 
Judgment of 4 June 2020, C.F. (Tax inspection) (C-430/19, paragraphs 35 and 
36); 
Judgment of 25 November 2021, Amper Metal (C-334/20). 
Provisions of national law relied on 
Legea nr. 571/2003 privind Codul fiscal (Law No 571/2003 establishing the Tax 
Code), published in the Monitorul Oficial al României No 927 of 23 December 
2003, as amended and supplemented, in force at the material time (‘the 2003 Tax 
Code’); title relating to value added tax: 
Article 126, according to which transactions that constitute or are treated as 
supplies of goods or services, within the scope of the tax, and carried out for 
consideration are taxable transactions in Romania. 
Article 134, according to which the chargeable event is the event by which the 
legal conditions necessary for the tax to become chargeable are satisfied 
(paragraph 1), and the date on which the tax becomes chargeable is the date on 
which the tax authority is authorised to demand payment of the tax 
(paragraph [2]). According to the same article, the chargeability date is the date on 
which a person is obliged to pay [the tax] to the State, with this date also 
determining the time from which interest for late payment is due for non-payment 
of the tax (paragraph 3). 
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Article 1341, according to which the chargeable event for supplies of services 
occurs on the date on which the services are rendered, and in the case of services 
rendered on a continuous basis, such as the supply of natural gas, water, telephone 
services, electricity and other similar services, the service is deemed to have been 
rendered on the dates specified in the contract for the payment of the services 
rendered or on the date on which the invoice is issued. 
Article 1342, according to which, for supplies of goods and services, the tax 
becomes chargeable on the date of the chargeable event. By way of exception, 
chargeability arises on the date of issue of an invoice before the date on which the 
chargeable event occurs, and on the date of receipt of the advance payment in the 
case of advance payments made before the date on which the chargeable event 
occurs. 
Article 145, according to which every taxable person has the right to deduct tax on 
purchases if they are to be used for the purposes of, inter alia, taxable transactions. 
Article 155, concerning invoicing, which provided, in paragraph 1 for the period 
from 2010 to 2012, and in paragraph 15 [for the period] from 2013 onwards, that a 
taxable person supplying any services other than services without the right to 
deduct tax was required to issue an invoice to each recipient no later than the 15th 
day of the month following the month in which the chargeable event occurred, 
unless the invoice had already been issued. The taxable person was also required 
to issue an invoice to each recipient for the amount of the advance payments 
received in respect of a supply of services no later than the 15th day of the month 
following the month in which the advance payments were received, unless the 
invoice had already been issued. 
Ordonanța Guvernului nr. 92 din 24 decembrie 2003 privind Codul de procedură 
fiscală al României (Government Order No 92 of 24 December 2003 establishing 
the Romanian Code of Fiscal Procedure), published in the Monitorul Oficial [al 
României] No 941 of 29 December 2003, as amended, now repealed by 
Article 354 of [Legea nr. 207 din 20 iulie 2015 privind Codul de procedură fiscală 
(Law No 207 of 20 July 2015 on the Code of Fiscal Procedure)] (‘the 2003 Code 
of Fiscal Procedure’). 
‘Article 213 
Ruling on a complaint 
(1) The competent authority, when ruling on a complaint, shall ascertain the 
factual and legal grounds on which the administrative act relating to taxation is 
based. The analysis of the complaint shall take into account the arguments of the 
parties, the legal provisions relied on by those parties, and the documents in the 
case file. A ruling on the complaint shall be given within the limits of the referral. 
[…] 
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(3) The ruling on the complaint may not lead to an aggravation of the 
complainant’s position as a result of its action.’ 
Legea nr. 554/2004 a contenciosului administrativ (Law No 554/2004 on 
administrative proceedings), published in the Monitorul Oficial [al României] 
No 1154 of 7 December 2004, in force at the time of the suspension of the notice 
of assessment: 
‘Article 14 
Suspension of implementation of the act 
(1) In duly justified cases and in order to prevent imminent damage, the 
aggrieved party may, after bringing proceedings, in accordance with Article 7, 
before the public authority that issued the act or its hierarchical superior, apply to 
the competent court for unilateral suspension of the implementation of the 
administrative act pending the decision of the court adjudicating on the substance 
of the case. If the aggrieved party does not bring proceedings for annulment of the 
act within 60 days, the suspension shall end automatically and without any 
formalities. 
[…] 
(7) Suspension of the implementation of the administrative act shall have the 
effect of putting an end to all forms of implementation until the end of the 
suspension period.’ 
Legea nr. 85/2006 privind procedura insolvenței (Law No 85/2006 on insolvency 
procedure) published in the Monitorul Oficial [al României] No 359 of 21 April 
2006, now repealed by Article 344 of Law No 85/2014 [(‘Law No 85/2006’)]: 
‘Article 4 
(1) All costs relating to the proceedings instituted by this Law, including those 
relating to the service, summoning and sending of procedural documents by the 
judicial administrator and/or liquidator, shall be paid from the debtor’s assets. 
[…] 
(4) Where there are no funds available in the debtor’s account, the liquidation 
fund shall be used and payments shall be made in accordance with the provisions 
of Article 37(4) of Ordonanța de urgență a Guvernului nr. 86/2006 privind 
organizarea activităților practicienilor în insolvență, aprobată cu modificări și 
completări prin [Legea nr. 254 di 19 iulie 2007] (Government Emergency Order 
No 86/2006 on the organisation of the activities of administrators of insolvency 
proceedings, approved, with amendments and additions, by Law No 254 of 
19 July 2007), as amended and supplemented, on the basis of a budget …. 
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Article 11 
(1) The main powers of the insolvency court under this Law are: 
[…] 
(c) the reasoned appointment, by means of the judgment opening the 
proceedings, from among the eligible administrators of insolvency proceedings 
who have submitted an offer of services for this purpose in the case file, of the 
provisional judicial administrator, or, as the case may be, liquidator, who will 
administer the proceedings until his or her appointment is confirmed or, as the 
case may be, a replacement is appointed by the assembly of creditors or by the 
creditor holding at least 50% of the value of the claims, determining his or her 
remuneration in accordance with the criteria established by the law on the 
organisation of the activities of administrators of insolvency proceedings, and his 
or her duties for that period […]. 
(d) the confirmation, by order, of the judicial administrator or liquidator 
appointed by the assembly of creditors or by the creditor holding more than 50% 
of the value of the claims, and the agreed fee […].’ 
Ordonanța de urgență a Guvernului nr. 86/2006 privind organizarea activității 
practicienilor în insolvență (Government Emergency Order No 86/2006 on the 
organisation of the activities of administrators of insolvency proceedings), 
published in the Monitorul Oficial al României No 944 of 22 November 2006: 
‘Article 38 
(1) Administrators of insolvency proceedings are entitled to a fee for their work 
in the form of fixed fees, success fees or a combination thereof. 
[…] 
(4) The provisional fee for the observation period shall be determined by the 
insolvency judge at the opening of the insolvency proceedings, based on the 
criteria set out in paragraph 2. It may be amended by the assembly of creditors, 
which must take into account the provisions of paragraph 2. 
(5) The fees of administrators of insolvency proceedings or of liquidators, or the 
costs of the proceedings, shall be paid from the fund established pursuant to 
Article 4 of Law No 85/2006, as amended and supplemented, and such fees shall 
be calculated in accordance with the tariffs and expenditure standards to be 
established by the [Adunarea reprezentanților permanenți a Uniunii Naționale a 
Practicienilor în Insolvență din România (Assembly of Permanent Representatives 
of the National Union of Administrators of Insolvency Proceedings of 
Romania)].’ 
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Succinct presentation of the facts and procedure in the main proceedings 
1 The appellant, C, is a professional limited liability company (SPRL) in which 
administrators of insolvency proceedings may work or participate, as judicial 
administrators or judicial liquidators, in insolvency proceedings, either during the 
observation period and for the duration of the restructuring proceedings (judicial 
administrators), or in the context of the insolvency proceedings, either in the 
general proceedings or in the simplified proceedings (judicial liquidators). 
2 By notice of assessment of 13 August 2015 issued by the AJFP Cluj, the appellant 
was assessed as being liable to pay additional VAT of 2 937 084 Romanian lei 
(RON) for the tax period from 1 January 2010 to 31 July 2014, as well as ancillary 
tax obligations of RON 1 900 705, totalling RON 4 837 789. The tax audit report 
on which the notice of assessment was based indicated, in essence, that, for certain 
supplies of services performed during the period covered by the tax audit, the 
appellant company had collected VAT only when the consideration for the 
services was received, and not when the services were actually provided. 
3 The appellant lodged an administrative complaint against the notice of assessment 
of 13 August 2015. By decision on the complaint of 10 May 2016, the DGRFP 
Cluj-Napoca rejected as unfounded the complaint lodged in respect of the sum of 
RON 2 375 480 in VAT, partially upheld the complaint and annulled the contested 
notice of assessment in respect of the sum of RON 123 266 in VAT, partially 
annulled the notice of assessment in respect of the sum of RON 2 112 926 
(RON 212 221 in VAT as originally assessed and RON 1 457 894 in late payment 
interest in respect of VAT, as well as RON 432 811 in late payment penalties in 
respect of VAT), and, lastly, rejected the complaint as unfounded in respect of the 
sum of RON 226 117 in VAT. 
4 In the expert report drawn up in the case, the services provided by administrators 
of insolvency proceedings are considered to constitute supplies of services 
performed continuously, for which payment may be made within one year. The 
decision on the complaint states that C issued invoices to its clients and collected 
VAT only on the date of receipt of the consideration for the services rendered to 
those clients, by virtue of the fact that the remuneration was approved subject to 
the condition precedent of the availability of liquid assets in the debtor’s account. 
The complaints body took the view that the 2003 Tax Code makes no distinction, 
as regards the chargeable event and the chargeability of VAT, according to the 
condition precedent of the receipt of the fee (availability of liquid assets in the 
debtor’s accounts), it being specified that, from the date of his or her appointment 
until the date on which the insolvency court relieves him or her of his or her duties 
and responsibilities, the judicial administrator/liquidator is to provide services 
relating to the management of insolvency/restructuring/bankruptcy proceedings, 
regardless of whether there are liquid assets in the debtors’ accounts. 
5 As regards the cooperation agreement between the law firm DDKK and the 
appellant, which was entered into in 2009, on the basis of which DDKK grants the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-696/22 
 
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appellant financing and the right to use its name and logo on all professional and 
communications materials through a co-branding formula (‘the cooperation 
agreement’), the right to deduct was refused on the ground that the invoices for 
the services rendered were not based on supporting documentation showing that 
the services were for the purposes of the appellant’s taxable transactions, as 
required by Article 145(2)(a) of the 2003 Tax Code. The appellant maintained that 
the purpose of entering into that agreement was to promote and support each other 
in order to attract clients, that is to say, to support its current business and set up 
its subsidiary in Bucharest. Moreover, the referring court notes that the same 
complaints body considers that the addition of the DDKK logo is a marketing 
strategy to diversify and increase the client base. Under the cooperation 
agreement, the appellant is required to pay the law firm DDKK a certain 
percentage of the revenue from its professional activity. According to the financial 
statement, the amount of revenue in 2011 increased by RON 2 556 702 compared 
to 2010 (from RON 21 893 741 to RON 24 450 443). 
6 On 11 March 2016, the appellant brought an administrative tax appeal before the 
referring court, seeking (i) partial annulment of the decision of 10 May 2016 
issued by the DGRFP Cluj-Napoca as regards points 1 and 3 of its operative part, 
(ii) partial annulment of the notice of assessment of 13 August 2015 issued by the 
AJFP Cluj, regarding the additional tax claim of RON 4 488 406 in VAT and 
incidental expenses, (iii) suspension of the implementation of the decision of 
10 May 2016 issued by the DGRFP Cluj-Napoca as regards point 3 of its 
operative part, and (iv) an order for the respondents to pay the costs. 
The essential arguments of the parties in the main proceedings 
7 The parties have not expressed their position on the request for a preliminary 
ruling and the questions contained therein. 
8 On the substance of the case, according to the appellant, the considerations on 
which the DGRFP Cluj-Napoca based its decision on the complaint lodged against 
the notice of assessment issued by the AJFP Cluj are unlawful and unfounded. 
9 As regards the method of determining the fee, the appellant submits that, although 
it had produced the minutes of the assembly of creditors whereby the judicial 
administrator/liquidator’s remuneration was set, [the DGRFP Cluj-Napoca] 
maintained that, for certain transactions, the judgment opening insolvency 
proceedings or bankruptcy proceedings, as the case may be, had not been lodged 
and that, therefore, it was not proven that the insolvency administrator’s fee had 
not been determined by that court decision, but only later, by the decision of the 
assembly of creditors. The aforementioned minutes attest to the time from which 
the judicial administrator/liquidator’s remuneration is clearly determined and 
becomes certain and liquid. Therefore, the respondents’ request for additional 
documents is excessive, particularly as these are required to prove a negative fact. 
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10 As regards the chargeable event and the chargeability of VAT, the appellant 
submits that [the DGRFP Cluj-Napoca] is misinterpreting and misapplying the tax 
provisions, both in the case of fees with a monthly deadline and in the case of fees 
subject to conditions. 
11 According to the appellant, as regards fees with a monthly deadline, it is accepted 
that the chargeable event, and, by implication, the chargeability of VAT, cannot 
arise with the opening of insolvency proceedings and the appointment of the 
administrator of insolvency proceedings if, at that time, the insolvency court does 
not also determine the fee payable to the judicial administrator/liquidator. 
Moreover, since the debt has not been determined, it cannot be invoiced. 
However, the DGRFP Cluj-Napoca takes the view that, once the fee was known 
following its approval by the assembly of creditors, the appellant was obliged 
immediately to invoice the fee for the previous or current month. The appellant 
submits that, according to the DGRFP Cluj-Napoca, the invoice would be late if it 
were issued only in the month following approval. Moreover, if the fee were 
known before being approved by the assembly of creditors, having been 
provisionally determined by the insolvency court, the obligation to invoice would 
exist from the very moment of the opening of the procedure for the provisional 
amounts, and any difference would be invoiced in the event of a subsequent 
change. 
12 However, according to the appellant, those grounds for rejection of the complaint 
deviate from the tax rules on the chargeable event, on the chargeability of VAT, 
and on invoicing, inasmuch as the DGRFP Cluj-Napoca concludes that the 
appellant failed to comply with the deadline for invoicing and with the deadline 
for paying the VAT due, without first having ruled on when the chargeable event 
giving rise to the chargeability of VAT occurs. 
13 The appellant states, first, that the chargeable event for VAT is not determined by 
reference to the obligation to invoice within a certain period, but that, on the 
contrary, the time at which the chargeable event occurs forms the basis for 
calculating the mandatory deadline for issuing the invoice (see, in that regard, the 
provisions of Article 155(15) of the 2003 Tax Code). Second, the cases in which 
the chargeable event is deemed to have occurred are expressly regulated by the 
legislature in Article 1341 of the 2003 Tax Code, according to the specific nature 
of the service provided. In view of the continuous nature of the service provided 
by the appellant, the rule that the chargeable event occurs at the time of the supply 
of the goods/service is inapplicable, since one of the special cases provided for in 
Article 134(7), (8) and (12) of the 2003 Tax Code applies. Therefore, the 
chargeable event in this case would occur either on the date on which the payment 
of the fee is agreed (according to the decision of the assembly of creditors) or on 
the date on which an invoice is issued, as the case may be. 
14 In conclusion, the appellant submits that if the chargeable event for VAT occurs 
when the invoice is issued, the chargeability of the tax arises only at that time, 
with the result that the appellant complied with the deadline for the payment of 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-696/22 
 
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VAT. Moreover, even if the chargeable event related to the time at which the 
assembly of creditors determined the fee, the invoice would have to be issued no 
later than the fifteenth day of the following month, and that deadline has been met. 
15 In its response to the appeal, the DGRFP Cluj-Napoca contends that, under 
national law, the chargeable event occurs on the date on which the goods or 
services are supplied, and the tax becomes chargeable on the date on which the 
chargeable event occurs. By way of exception, the tax becomes chargeable in 
advance of the chargeable event on the date on which an invoice is issued, or on 
the date on which the advance payment is collected, before the chargeable event 
occurs. Therefore, the taxable person is obliged to issue an invoice for the supply 
of goods/services no later than the fifteenth day of the month following the month 
in which the chargeable event occurs. 
16 With regard to fees that are subject to conditions (existence of liquid assets in the 
debtor’s account at the end of the procedure), the appellant submits that [the 
DGRFP Cluj-Napoca] applied the same VAT legal regime as in the case of fees 
subject to conditions, considering that, since the appellant is in fact providing a 
service, it is obliged to issue an invoice to its clients, since the 2003 Tax Code, 
with regard to the chargeable event and the chargeability of VAT, does not make 
any distinction depending on whether a condition exists. 
17 However, according to the appellant, the complaints body failed to take into 
account the fact that VAT is due on the basis of an economic transaction (and thus 
on the basis of a legal relationship). The very existence of the legal relationship on 
which the tax is based depends on the condition being satisfied. There are 
therefore two possible scenarios, depending on whether or not the condition has 
been satisfied: (i) if the condition has not been satisfied (there are no liquid assets 
in the debtor’s account at the end of the procedure), the legal relationship is 
deemed never to have existed, such that a legal basis for the collection of VAT 
also does not exist. The appellant cites in this regard paragraph 35 of the judgment 
of the Court of Justice of 3 September 2015, Asparuhovo Lake Investment 
Company, C-463/14. Therefore, as long as the fee is not due, as a result of the 
condition not being satisfied, even if the service has actually been provided, there 
is no longer any quid pro quo, as the service falls outside the scope of VAT; (ii) if 
the condition has been satisfied (there are liquid assets in the debtor’s account at 
the end of the procedure), the legal relationship becomes certain, but only at that 
point is it known with certainty that the fee is due, such that the payment of the fee 
is deferred until the time at which it is possible to evaluate whether the condition 
has been satisfied (the end of the procedure). In this case, Article 1341(8) of the 
2003 Tax Code applies, according to which the chargeable event occurs on the 
dates specified in the contract for payment or on the date on which an invoice is 
issued. 
18 As regards the particular cases in which the assembly of creditors has approved 
the annulment of the invoiced fee and the waiver of the future fee, and in which 
the condition has not been satisfied, the legal relationship becomes devoid of 
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consideration, such that, following the loss of its economic nature, the service falls 
outside the scope of VAT. 
19 With regard to the VAT that the tax authorities deemed non-deductible, the 
appellant submits that the complaints body carried out a much more in-depth 
analysis of the factual situation than the tax audit team, almost omitting the factual 
reasons that were set out in the tax audit report and that formed the basis for 
issuing the notice of assessment. In so doing, the complaints body actually acted 
in place of the tax audit team by putting forward entirely new grounds in support 
of the decision refusing to grant the right to deduct VAT. 
20 The appellant further submits that such an approach by the complaints body is 
contrary to the law and that the complaints procedure against tax administrative 
acts is a preventive administrative procedure that is not governed by the 
adversarial principle, since the taxpayer is no longer able to express a view on any 
reinterpretation of the factual and legal situation established and adopted by the 
tax audit team. Referring to Article 213(1) of the 2003 Code of Fiscal Procedure, 
the appellant submits that it is for the complaints body to ascertain whether the 
factual and legal grounds accepted by the tax audit team are actually well founded 
and capable of corroborating the notice of assessment that has been issued. 
Therefore, the complaints body cannot put forward further arguments to justify the 
lawfulness of the administrative act, since the taxpayer in question cannot defend 
itself in any way against those arguments. 
21 In the present case, with regard to deductible VAT, the complaints body replicated 
the conclusions drawn by the tax audit team, but based them on completely 
different arguments, reconstructing the entire tax situation. As regards those 
arguments, the appellant was not given the opportunity to express an opinion and 
was thus deprived of its rights of defence, and consequently the decision on the 
complaint should be annulled. 
22 As regards the invoices issued by the law firm DDKK, the tax audit authority 
refused the right to deduct the VAT relating to those transactions on the grounds, 
first, that it had not been established that the services invoiced to the appellant had 
been carried out in consideration of the cooperation agreement and the addendum 
thereto, rather than on the basis of Contract No 335204/03.12.2010 as listed on the 
invoices issued, and, second, that it was not possible to identify the nature of the 
service purchased based on the supporting documentation provided or to prove 
that the service was necessary for the activities carried out for the purposes of the 
taxable transactions. 
23 The appellant submits that all invoices issued by DDKK and recorded in its 
accounts were drawn up on the basis of the cooperation agreement and the 
addendum thereto. The invoices incorrectly referred to Contract 
No 335204/03.12.2010, as attested by the representatives of DDKK. 
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24 Moreover, according to the appellant, the tax audit authority stated that the tax 
audit team was not provided, for any of the recorded invoices from DDKK, with 
any activity or works report or other corresponding document attesting that the 
services invoiced to the appellant had been carried out in consideration of the 
cooperation agreement or the addendum to the cooperation agreement, rather than 
on the basis of Contract No 335204/03.12.2010 as listed on the invoices issued, as 
both companies confirm despite not providing evidence in the form of supporting 
documentation. 
25 In the report proposing a decision on the complaint, however, the tax audit team 
argued that, in reality, the reason for refusing the right to deduct was not the 
incorrect indication of the basis for issuing the invoice, but rather the fact that it 
was not possible to establish a link between the amounts entered on the invoices 
issued and the cooperation agreement entered into with DDKK. The complaints 
body supplemented the arguments used in the tax audit report and stated that the 
appellant had not submitted documents actually showing the services provided, in 
a context in which, according to the cooperation agreement, all calculations 
relating to the monthly sum to be paid are the responsibility of the appellant. 
26 As set out in Article 5.1 of the cooperation agreement, in consideration of the 
agreements set out in Article 1 thereof, ‘DDKK grants C the right to use its name 
and logo in all professional and communications material, through a co-branding 
formula’. In addition, to repay the financing granted, C, including its subsidiaries, 
was required to pay DDKK an amount equal to 10% (plus VAT) of all revenue 
from C’s professional activities from the date on which the cooperation agreement 
entered into force and for its entire duration. Subsequently, when the addendum 
was drawn up, it was agreed that the basis for calculating the amount payable to 
DDKK would be only the variable revenue and that the rate of 10% laid down in 
the cooperation agreement would become 7% if the annual variable revenue was 
less than EUR 3 million and 9% if it exceeded that threshold. 
27 According to the appellant, the amounts listed on the invoices issued by DDKK 
complied with all the contractual provisions relating to the method for calculating 
the amounts due, as is apparent from the records annexed thereto. 
28 Moreover, in the period from 2009 to 2011, the appellant allegedly made 
payments to DDKK, fulfilling its contractual obligation to repay the financing 
granted, and those transactions were not challenged by the tax authorities that 
audited the period in question. 
29 The appellant further submits that the cooperation agreement was aimed at 
implementing a co-branding formula; a concept which defines an alliance between 
brands, designed to create a situation favourable to both contractual parties and 
preferable to traditional competition. Through this marketing strategy, the 
appellant sought to enter the Bucharest insolvency services market and to improve 
its ability to attract business in the capital; an objective achieved in large part 
through the association of its name with that of the renowned law firm DDKK. 
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That being so, the appellant submits that all the conditions laid down by law for 
exercising the right to deduct VAT in respect of the sums paid to DDKK on the 
basis of the cooperation agreement and the addendum thereto have been satisfied: 
the actual provision of the co-branding services has not been called into question, 
since the DDKK name and logo were used in all of the appellant’s business and 
communications material, in accordance with the contractual provisions; and the 
link between those services and the appellant’s taxable transactions was apparent 
from the purpose pursued thereby, namely [the appellant] building its own client 
base and attracting DDKK’s associates to become the appellant’s clients. 
30 Referring to paragraph 31 of the judgment of the Court of Justice of 18 July 2013, 
AES-3C Maritza East 1 (C-124/12), the appellant submits that those costs have a 
direct and immediate link with the whole of its economic activity as a taxable 
person. 
31 The co-branding agreement in question was entered into for the exclusive purpose 
of the appellant’s expansion and development, such that the existence of a direct 
and immediate, as well as purely economic, link is indisputable. Furthermore, 
according to the financial statement, in 2011 the appellant’s revenue increased 
compared to 2010 by RON 2 556 702 (from RON 21 893 741 to 
RON 24 450 443). The appellant further submits that the finding of the complaints 
body according to which the appellant did not produce any documents actually 
proving the services provided is in breach of the principle of the primacy of 
substance over form, since the requirement to produce documentary evidence 
proving the content of the services is excessive, given that those services cannot 
be quantified in a material document. 
32 According to the appellant, who cites the case-law of the Court of Justice on this 
matter, the principle underlying the VAT deduction regime is that of tax 
neutrality, whereby taxable persons must not be hindered, by reason of the 
quantity and nature of the technical formalities to be carried out, in exercising 
their right to deduct VAT, and the exercise of that right must not be made 
practically impossible or very difficult. 
33 In the light of the judgment in Schmeink & Cofreth and Strobel, the refusal to 
recognise the right to deduct the VAT relating to invoices issued on the basis of 
the co-branding agreement on grounds such as the absence of documents attesting 
to their supply is, according to the appellant, unfounded, since it is in breach of the 
principle of VAT neutrality. 
34 The DGRFP Cluj-Napoca contends that, by its arguments, the appellant has not 
proved that the services invoiced were actually provided by its associate and has 
not refuted the findings of the tax audit team that the amount of RON 646 673 in 
VAT was deducted on the basis of invoices for the supply of services without 
being based on a supporting document proving that the services were intended for 
the purposes of its taxable transactions. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-696/22 
 
14  
Succinct presentation of the reasoning in the request for a preliminary ruling 
35 In relation to the first question, the referring court states that there is a need to 
clarify the concept of ‘continuous supply of goods or services over a period of 
time’ referred to in Article 64(2) of [the VAT Directive] and the application of 
that definition to the specific activity of judicial administrators/liquidators in the 
context of insolvency proceedings. 
36 The monthly fee of the judicial administrator or liquidator is set by the insolvency 
court or the assembly of creditors, and the appellant’s fee is certain in this respect. 
37 The appellant submits that the rule set out in Article 1341(8) of the 2003 Tax Code 
is applicable in its case, as it concerns services provided on a continuous basis, in 
respect of which payment may be made within the period of one year. The 
national legislation does not contain an exhaustive list, but lists, by way of 
example, supplies of natural gas, water, telephone services, electricity and ‘other 
similar services’. Since Article 64 of [the VAT Directive] appears to derogate 
from the rule laid down in Article 63 thereof and, as such, must be interpreted 
restrictively (see judgment of 21 February 2006, BUPA Hospitals and 
Goldsborough Developments, C-419/02, [EU:C:2006:122,] paragraph 45), the 
question arises as to whether services provided by judicial 
administrators/liquidators in the context of insolvency proceedings fall under the 
category of ‘other similar services’ referred to in Article 1341(8) of the 2003 Tax 
Code and, consequently, whether the condition laid down at EU level in 
Article 64(2) [of the VAT Directive] concerning the requirement of the provision 
in national law, ‘Member States may provide that, in certain cases …’, has been 
satisfied. 
38 Since the services and supplies listed in the provision of domestic law have a 
certain specificity, being supplies of natural gas, water, and so on, and thus public 
utilities, an answer from the Court of Justice is required in the light of 
Article 64(2) of [the VAT Directive]. 
39 How those services are classified will also determine the chargeable event for the 
tax and the time at which VAT becomes chargeable in the present case: in the 
month after the fee is determined, pursuant to Article 155 of the 2003 Tax Code 
with reference to Article 66(c) of the VAT Directive, or within one year if the 
service is considered to be continuous. 
40 With regard to the second question, the referring court considers that, in the 
present case, there is a question as to when the chargeable event occurs and when 
the tax becomes chargeable in the case of the specific activity of administrators in 
insolvency proceedings, where the VAT was levied only on the date on which 
payment was received for the services provided in the context of the insolvency 
proceedings and where the general assembly of creditors decided that payment of 
the insolvency administrator’s fee was subject to the availability of liquid assets in 
the debtors’ accounts. 
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41 In that regard, the appellant, referring to the judgment of the Court of Justice in 
Asparuhovo Lake Investment Company (C-463/14), argues that, in the absence of 
a taxable economic transaction, a VAT claim cannot arise. On the other hand, the 
referring court observes that, pursuant to Article 4(4) of Law No 85/2006, there is 
always a certain payment. In this situation, the question arises as to whether, in the 
present case, it was no longer appropriate to apply the adjustment mechanism in 
the event that there were no liquid assets in the debtors’ accounts, with the 
consequence that the VAT would be collected immediately. 
42 Furthermore, in the light of the findings of the Court of Justice in paragraph 28 of 
its judgment of 29 November 2018, Finanzamt Goslar (C-548/17), the referring 
court questions, alternatively, whether, in the present case, the services provided 
by administrators of insolvency proceedings involve payments on account or 
subsequent payments. 
43 The third question seeks to ascertain whether, in order to prove the right to 
deduct VAT in the case of a co-branding agreement, it is sufficient, for probative 
purposes, that the taxable person, in order to substantiate the substantive condition 
relating to the existence of a direct and immediate link between the purchases 
made by the upstream taxable person and the downstream transactions, prove only 
an increase in turnover or in the value of the taxable transactions after the 
agreement was entered into, without any other supporting documentation. 
44 If the answer is in the affirmative, in the absence of supporting documentation, 
with the exception of invoices in which VAT is indicated and, of course, the co-
branding agreement itself, the referring court has doubts as to the criteria to be 
taken into account in order to determine the actual scope of the right to deduct. In 
other words, it seeks to ascertain whether, in the absence of other supporting 
documentation, the existence of a direct and immediate link between the 
purchases made by the upstream taxable person and the downstream transactions 
is sufficient for recognising the right to deduct in full the VAT indicated in those 
invoices. 
45 According to the referring court, the third question has not become devoid of 
purpose following the judgment of the Court of Justice of 25 November 2021 in 
Amper Metal (C-334/20), in so far as, first, unlike in that case, in the present case 
the turnover has increased and, second, the question concerns the standard of 
proof as regards the documents required to show that the substantive condition of 
the direct and immediate link and, ultimately, the right to deduct VAT has been 
satisfied. 
46 The fourth question concerns the context in which, with regard to the VAT that 
the tax audit team considered to be non-deductible, the complaints body 
confirmed the solution followed in the notice of assessment, but supplemented it 
by accepting new factual and legal arguments as compared with those contained in 
the tax audit report on the basis of which the notice of assessment was issued. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-696/22 
 
16  
47 The referring court states that the appellant was granted interim judicial protection 
measures, pending the decision of the court adjudicating on the substance of the 
case, through the claim being suspended, and points out that, in its appeal against 
the decision on the complaint, the appellant has contested the new grounds that 
were accepted therein. 
48 Analysing the case-law of the Court of Justice, the referring court first refers to 
paragraphs 78 and 79 of the judgment in Kamino International Logistics and 
Datema Hellmann Worldwide Logistics [(C-129/13 and C-130/13)], according to 
which the principle of effectiveness does not require that a disputed decision, 
because it has been adopted in breach of the rights of the defence, must be 
annulled in all cases. In fact, a breach of the rights of the defence results in the 
annulment of the decision taken at the end of the administrative procedure at issue 
only if, had it not been for such an irregularity, the outcome of the procedure 
might have been different. 
49 Next, the referring court recalls paragraph 37 of the judgment of the Court of 
Justice in Ispas [(C-298/16)], according to which, in order to determine whether 
the requirements arising from the principle of effectiveness have been met in the 
present case, it is appropriate to assess not only the content of the relevant national 
procedural rules, but also their actual application, that assessment being a matter 
for the referring court. 
50 Lastly, the referring court considers that paragraphs 35 and 36 of the judgment of 
the Court of Justice in C.F. (Tax inspection) [(C-430/19)] reconfirm the condition 
of the existence of damage, and that that judgment does not add any new elements 
in terms of the rights of the defence. 
51 In the light of those factors, the referring court questions whether, in the present 
case, the claim for damage is precluded, since the appellant was granted interim 
protection measures under Article 14 of Law No 554/2004 on administrative 
proceedings. More precisely, on the basis of an interpretation a contrario of 
paragraph 73 of the judgment of the Court of Justice in Kamino International 
Logistics and Datema Hellmann Worldwide Logistics, the referring court asks 
whether it can be concluded that, in so far as the national legislation in the present 
case permitted the suspension of the claim (notice of assessment) pending a 
possible review thereof by a court, there has in fact been no breach of the principle 
of the rights of the defence.