Information;Judgment — ECLI:EU:C:2023:355
Date: 2023-04-27
Language of the case: Romanian
Court formation: Ninth Chamber
Subject matter: Approximation of laws
Procedure: Reference for a preliminary ruling;Reference for a preliminary ruling - inadmissible
Origin: Romania

Summary C-827/21 – 1 
Case C-827/21 
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: 
30 December 2021 
Referring court: 
Înalta Curte de Casație și Justiție (Romania) 
Date of the decision to refer: 
12 October 2021 
Applicant for revision: 
Banca A 
Defendants: 
Agenția Națională de Administrare Fiscală (ANAF) 
President of ANAF 
  
Subject matter of the main proceedings 
Application for revision brought before the Înalta Curte de Casație și Justiție 
(High Court of Cassation and Justice, Romania) by the applicant for revision, 
Bank A, against the defendants Agenția Națională de Administrare Fiscală 
(National Agency for Fiscal Administration, Romania, ‘ANAF’) and the President 
of ANAF, against the final judgment delivered on appeal by the High Court of 
Cassation and Justice in a dispute concerning the taxation of the profit made upon 
a merger by incorporation. 
Subject matter and legal basis of the request for a preliminary ruling 
In accordance with Article 267 TFEU, interpretation is sought of Directive 
2009/133/EC and of the principle that national law is to be interpreted in 
conformity with EU law. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-827/21 
 
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Questions referred for a preliminary ruling 
1. Is a national court required to interpret in a manner consistent with Council 
Directive 2009/133/EC the national tax legislation applicable to internal situations 
which governs the non-taxation of income arising on the cancellation of the 
shareholding of a receiving company in the capital of a transferring company, in 
circumstances such as those of this case, where: 
– the national legislature has regulated internal transactions and similar cross-
border transactions with separate, non-identical rules; 
– the national rule applicable to internal transactions nevertheless operates using 
concepts contained in the directive – merger, transfer of assets and liabilities, 
cancellation of shareholdings; 
– the explanatory memorandum to the national tax law can be interpreted as 
meaning that the legislature intended to establish the same tax treatment for 
national transactions as for cross-border transactions, covered by the transposition 
of the directive, in order to comply with the principle of the tax neutrality of 
mergers in a non-discriminatory manner and in such a way as to avoid distortions 
of competition? 
2. Must Article 7 of Council Directive 2009/133/EC be interpreted as meaning 
that the benefit of the non-taxation of income arising from a transaction whereby 
one company cancels its shareholding in another company, following the transfer 
of the assets and liabilities of the latter company to the former, cannot be refused 
on the ground that the transaction in question does not satisfy all the conditions 
laid down in national law in order to be classified as a merger? 
3. Must Article 7 of Council Directive 2009/133/EC be interpreted as meaning 
that the benefit of non-taxation applies to the profit arising from an acquisition on 
favourable terms, reflected in the profit and loss account of the incorporating 
company? 
Provisions of EU law relied on 
Council Directive 2009/133/EC of 19 October 2009 on the common system of 
taxation applicable to mergers, divisions, partial divisions, transfers of assets and 
exchanges of shares concerning companies of different Member States and to the 
transfer of the registered office of an SE [European Company] or SCE [European 
Cooperative Society] between Member States: Article 2(a), Article 4(1) and 
Article 7, and the principle that national law is to be interpreted in conformity 
with EU law. 
BANCA A 
 
3 
Provisions of national law relied on 
Legea nr. 554/2004 contenciosului administrativ (Law No 554/2004 on 
administrative proceedings), Article 21(1), pursuant to which, in addition to the 
grounds provided for by the Code of Civil Procedure, judgments that have become 
final and binding and that infringe the primacy of EU law constitute grounds for 
revision.  
Legea nr. 571/2003 privind Codul fiscal (Law No 571/2003 establishing the Tax 
Code, ‘the Tax Code’), Article 27(3), (4) and (5), which provide as follows: 
‘3. The provisions of this article shall apply to the following reorganisation 
operations, provided that the main purpose of the operation is not tax evasion or 
tax avoidance: 
(a) the merger of two or more Romanian legal persons, where the participants in 
any of the merging legal entities receive shares in the successor legal person; 
… 
4. The following rules shall apply to reorganisation operations as referred to in 
paragraph 3: 
(a) the transfer of assets and liabilities shall not be treated as a taxable transfer 
for the purposes of this Title; … 
5. Where a Romanian legal person holds at least 15% ‒ or, from 2009 onwards, 
10% ‒ of the equity shareholding in another Romanian legal person which 
transfers assets and liabilities to the former, by means of an operation as referred 
to in paragraph 3, the cancellation of those shares shall not be treated as a taxable 
transfer.’ 
Legea nr. 31/1990 privind societățile comerciale (Law No 31/1990 on 
commercial companies), Article 238(1), Article 2434 and Article 250(1)(b), which 
provide as follows: 
‘Article 238 ‒ 1. A merger is an operation whereby: 
(a) one or more companies are dissolved without going into liquidation and 
transfer all of their assets and liabilities to another company in exchange for the 
distribution to the shareholders of the company or companies being acquired of 
shares in the acquiring company and, if applicable, a cash payment not exceeding 
10% of the nominal value of the shares so distributed, or 
(b) several companies are dissolved without going into liquidation and transfer 
all of their assets and liabilities to another company which they form, in exchange 
for the distribution to their shareholders of shares in the newly established 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-827/21 
 
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company and, if appropriate, a cash payment not exceeding 10% of the nominal 
value of the shares so distributed. 
Article 2434 ‒ In the case of a merger by incorporation, whereby one or more 
companies are dissolved without going into liquidation and transfer all of their 
assets and liabilities to another company which holds all their shares or other 
securities conferring the right to vote at general meetings, the following articles 
shall not apply: … Article 250(1)(b) …: 
Article 250 ‒ 1. Mergers and divisions shall have the following 
consequences: … 
(b) the shareholders or members of the company being acquired or divided shall 
become shareholders or members of the acquiring company or successor 
company, in accordance with the distribution rules set out in the merger/division 
prospectus; …’. 
Hotărârea guvernului nr. 44/2004 pentru aprobarea Normelor metodologice de 
aplicare a Legii nr. 571/2003 privind Codul fiscal (Government Decision 
No 44/2004 approving the rules for the application of Law No 571/2003 
establishing the Tax Code), paragraph 85, which provides that, in accordance with 
Article 27(3)(a) and (b) of the Tax Code, mergers and divisions are governed by 
Law No 31/1990. 
Succinct presentation of the facts and procedure in the main proceedings 
1 On 25 November 2015, the Tribunalul Specializat Cluj (Special Court, Cluj, 
Romania) authorised the entry in the Companies Register of information 
concerning the merger by incorporation carried out by Bank A, the acquiring 
company, and Bank B, the acquired company, at a time when Bank A had already 
purchased 100% of the shares in the bank being acquired. The share price had 
been agreed between the parties at a figure below market value and the shares 
were recorded in the financial statements of the acquiring company at their 
acquisition cost, in accordance with the applicable accounting rules set out in 
Ordinul Băncii Naționale a României nr. 27/2010 pentru aprobarea 
Reglementărilor contabile conforme cu Standardele Internaționale de Raportare 
Financiară (IFRS) (Order No 27/2010 of the National Bank of Romania approving 
accounting rules in accordance with International Financial Reporting Standards 
(IFRS)), which applies to credit institutions. 
2 The merger took effect on 31 December 2015 and was recorded in the financial 
statements of the acquiring company in accordance with IFRS 3 – Business 
Combinations. Accordingly, the difference between the price which Bank A paid 
for the acquisition of the shares and the fair value of the assets and liabilities of 
the acquired company was stated in the individual profit and loss account of the 
acquiring company as a profit arising from an acquisition on favourable terms. 
BANCA A 
 
5 
3 Before the date on which the merger took effect, Bank A had submitted to ANAF, 
on 22 June 2015, an application for an advance individual tax decision concerning 
the tax treatment of the profit arising from the acquisition on favourable terms, 
which Bank A was to record following the merger, on the date on which the 
merger took effect. In that application, Bank A stated that, in its opinion, the 
income stated in the profit and loss account for 2015 as a profit arising from the 
acquisition on favourable terms was not to be included in the calculation of 
corporation tax for the financial year in which the merger took effect, since a 
merger is a neutral transaction for tax purposes and the transfer of assets and 
liabilities is not subject to tax. 
4 In response to that application, on 1 November 2016, the President of ANAF 
issued a decision stating that the income earned on an acquisition on favourable 
terms was not included in the list of non-taxable income items expressly set out in 
Article 20 of the Tax Code. 
5 Bank A lodged an administrative appeal, which ANAF dismissed on 
12 November 2017. The grounds of dismissal were that (i) the income in question 
did not fall into any of the categories expressly provided for by Article 20 of the 
Tax Code; (ii) Article 271 of the Tax Code and Articles 4 and 7 of Directive 
2009/133 did not apply, since they concerned cross-border mergers, whereas the 
merger in this case was between two banks both resident for tax purposes in 
Romania, rather than in different Member States of the European Union, and (iii) 
Article 27(4) and (5) of the Tax Code were equally inapplicable, since a merger 
by incorporation in which the acquiring company holds all of the shares in the 
acquired company was not among the operations referred to in Article 27(3) of the 
Tax Code. 
6 Bank A brought an action challenging ANAF’s two decisions, in which the Curtea 
de Apel Cluj (Court of Appeal, Cluj, Romania) annulled the decision of 
12 November 2017 dismissing the administrative appeal, along with the decision 
of ANAF’s President of 1 November 2016, and instructed ANAF to issue a new 
individual tax decision establishing that the tax treatment of the profit arising from 
the acquisition on favourable terms which Bank A had recorded on the date of the 
merger should be that for non-taxable income. 
7 The Court of Appeal, Cluj, held that Article 20 of the Tax Code was not the only 
provision that governed categories of non-taxable income, and that the provisions 
of Article 27 of the Tax Code, concerning reorganisations, liquidations and other 
transfers of assets and shareholdings, was also applicable. It held to be applicable 
Article 27(5) of the Tax Code, in accordance with which the cancellation of an 
acquiring company’s shareholding in an acquired company is not a taxable 
transaction, that article governing a specific case of non-taxation. That solution, 
also advocated in the tax expert’s report produced in the proceedings, ensured 
observance of the principle of the tax neutrality of mergers. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-827/21 
 
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8 The appeal which ANAF lodged against the judgment of the Court of Appeal, 
Cluj, was upheld by the High Court of Cassation and Justice. By judgment of 
23 June 2020, that court set aside the judgment under appeal and, ruling ex novo 
on the merits, dismissed Bank A’s claim as unfounded, holding that the profit in 
question did not fall within the scope of any of the provisions of the Tax Code 
governing non-taxation. 
9 The High Court of Cassation and Justice thus overruled the Court of Appeal’s 
interpretation of Article 27(5) of the Tax Code and held that that provision did not 
apply because Bank A already held 100% of the shares in the incorporated bank 
prior to the date of the merger by incorporation, and no shares were issued to the 
shareholders of the incorporated bank. 
10 Nor were the provisions of Article 271 of the Tax Code, transposing provisions of 
Directive 90/434, applicable, since they concerned cross-border mergers. 
11 On 28 October 2020, pursuant to Article 21 of Law No 554/2004, Bank A lodged 
an application for revision of the judgment of 23 June 2020, requesting that it be 
set aside and a new ruling be given dismissing ANAF’s appeal. 
12 Bank A maintains that there is a conflict between the national tax legislation and 
the rules of EU law concerning the common system of taxation applicable to 
reorganisations and transfers of assets, and that that conflict can only be resolved 
by applying the principle of the primacy of EU law. 
The essential arguments of the parties in the main proceedings 
13 According to the applicant for revision, Articles 20 and 27 of the Tax Code, as 
interpreted by the tax authority and the High Court of Cassation and Justice [in its 
judgment of 23 June 2020], constitute an obstacle to the free functioning of the 
internal market. 
14 Where national legislation adopts solutions enacted in EU law it should be 
interpreted in conformity with EU law, even in connection with purely internal 
situations, so as to avert discrimination against its nationals or possible distortions 
of competition. 
15 Article 27 of the Tax Code is based on the provisions of Directive 90/434, as is 
clear from the explanatory memorandum to the Tax Code. That Article 27 was 
amended, prior to Romania’s accession to the European Union, by Law 
No 343/2006, which inserted Article 271 governing cross-border mergers. The 
provisions of the third indent of Article 2(a) of Directive 90/434 have been 
correctly transposed by Article 271(3)(1)(c) of the Tax Code. However, the rules 
which apply to Romanian legal persons under Article 27 have not been amended 
in a corresponding manner. One consequence of that omission is that national law 
may be interpreted incorrectly, in such a way as to infringe EU law. 
BANCA A 
 
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16 The applicant for revision also states that the tax solutions for mergers between 
Romanian legal persons in the new Tax Code, adopted by Law No 227/115, which 
came into force on 1 January 2016, are fully aligned with Directive 2009/133. 
17 Leaving aside the irregularity which emerged in 2003 when the definition of a 
merger in Directive 90/434 was incorporated into the Tax Code, the solution of 
non-taxation of such transactions, laid down in Article 27(5) of the Tax Code, is 
identical to that which applies to transactions referred to in the third indent of 
Article 2(a) of Directive 90/434 pursuant to Article 7 of that directive. 
18 If the applicability of a special non-taxation regime were to be made conditional 
on the formal classification of a transaction cancelling an acquiring company’s 
shareholding in an acquired company as a merger within the meaning of 
Article 27(3) of the Tax Code, that would render Article 27(5) of the Tax Code 
inapplicable. 
19 The High Court of Cassation and Justice, hearing Bank A’s application for 
revision, has decided, at the applicant’s request, to refer questions to the Court of 
Justice for a preliminary ruling. 
20 ANAF contends that the referring court should dismiss the application for revision 
as inadmissible and, in the alternative, unfounded. It considers that Directive 
2009/133 does not apply in the present case and that the question of the primacy 
of EU law has already been finally settled and any revisiting of that question, in 
the absence of any new factors, would be contrary to the authority of res judicata. 
Furthermore, national law is, it submits, in line with and consistent with EU law. 
Succinct presentation of the grounds for the reference for a preliminary 
ruling 
21 First of all, the referring court emphasises that, if the tax treatment confirmed in 
this final stage of the legal proceedings were to be the taxation of the profit arising 
on the acquisition of Bank B, contrary to the express provisions of EU law in the 
matter, Bank A would suffer a loss of 264 096 036 Romanian Lei (RON), 
representing corporation tax for 2016, and that, once the main proceedings have 
been resolved, the issue of the tax treatment of the profit earned from the 
acquisition on favourable terms will be decided and the parties will no longer be 
able to commence further proceedings concerning the taxation or otherwise of that 
profit. 
22 The answer to the first question will enable the referring court to rule on the 
admissibility of the application for revision. Three conditions must be satisfied in 
order for that application to be admissible: (i) it must be alleged that the judgment 
of which revision is sought infringes EU law; (ii) the appellate court must have 
failed to address, in the judgment of which revision is sought, arguments of EU 
law on which reliance is placed in the application for revision, and (iii) the 
application for revision must observe the limits of the ruling on the substance. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-827/21 
 
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23 The applicant for revision has not argued that the merger by incorporation was a 
cross-border merger, merely that Article 27 of the Tax Code, which applies to 
domestic transactions, must be interpreted in conformity with EU law applicable 
to cross-border transactions, in order to ensure equality in tax treatment and non-
discrimination. The case-law of the Court of Justice on which the applicant relies, 
in particular, the judgments in Foggia-SGPS (C-126/10, EU:C:2011:718), 
Modehuis A. Zwijnenburg (C-352/08, EU:C:2010:282), Andersen og Jensen 
(C-43/00, EU:C:2002:15) and Leur-Bloem v Inspecteur der 
Belastingdienst/Ondernemingen Amsterdam 2 (C-28/95, EU:C:1997:369), 
concern the application of Directive 90/434 to purely internal situations, in 
relation to which the Court of Justice held that it had jurisdiction to answer the 
questions which had been referred to it for a preliminary ruling. 
24 Since the appellate court did not address the arguments which Bank A made 
concerning the neutrality of the merger and the effect of EU law in the context of 
the voluntary harmonisation effected by the Romanian legislature, and since the 
applicant for revision has confined itself to reiterating the arguments it put 
forward in the administrative appeal, the application for revision meets the last 
two conditions of admissibility. 
25 In so far as the first condition of admissibility is concerned, the referring court 
states that it must ascertain whether the appellate court was under an obligation to 
interpret the national legislation in conformity with Directive 2009/133 or, in 
other words, whether or not EU is applicable in the present case, which concerns a 
purely domestic situation, but one where EU law might be applicable for reasons 
similar, if not identical to those identified in the abovementioned case-law of the 
Court of Justice. 
26 Since the interpretation of national law in conformity with EU law is a principle of 
EU law (see, to that effect, the judgment of 5 October 2004, Pfeiffer and Others, 
C-397/01 to C-403/01, EU:C:2004:584, paragraph 114), jurisdiction to rule on the 
conditions governing that principle and on the scope of that principle lies with the 
Court of Justice. 
27 In setting out the circumstances in which it must rule on the applicability of EU 
law in this case, the referring court gives a brief overview of the relevant national 
legislation. 
28 The adoption of Article 27 of Law No 571/2003 establishing the Tax Code was 
modelled on Directive 90/434, as is clear from the explanatory memorandum to 
that law, according to which the legislature’s intention was to harmonise the 
national tax-law framework with that directive. The concept of a merger in 
national law, however, does not perfectly match the concept of a merger in 
Directive 90/434, inasmuch as, in Article 238 of Law No 31/1990, there is no 
definition of merger by incorporation, whereby a company, on being dissolved 
without going into liquidation, transfers all of its assets and liabilities to the 
BANCA A 
 
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company holding all the securities representing its capital, which is referred to in 
the third indent of Article 2(a) of Directive 90/434. 
29 Subsequently, with Law No 343/2006, the Romanian legislature amended 
Article 27 of the Tax Code, at the same time inserting Article 271, designed to 
govern cross-border transactions. Article 271 faithfully transposes the provisions 
of Directive 90/434. Article 27 of the Tax Code, however, which governs internal 
transactions, was not amended in such a way as to render it identical to 
Article 271. Article 27(3)(a), read in conjunction with point 85 of the rules for the 
application of the Tax Code, continues to refer to a ‘merger’ as defined in 
Article 238 of Law No 31/1990, and paragraph 4 of Article 27, pursuant to which 
the transfer of assets and liabilities is not to be treated as a taxable transfer, and 
paragraph 5 of Article 27, pursuant to which income arising from the cancellation 
of the acquiring company’s shareholding in the acquired company is not to be 
treated as a taxable transfer, are linked to paragraph 3 by a reference to the 
reorganisation transactions mentioned in that paragraph. 
30 Although the Romanian legislature chose to regulate the tax regime for internal 
reorganisations and that for cross-border reorganisations in two separate articles, 
the explanatory memorandum to the Tax Code and the explanatory memorandum 
to the 2006 law amending the Tax Code state that, even in relation to internal 
reorganisations, voluntary harmonisation of the applicable national legislation 
with EU law was pursued. 
31 Evidence of the Romanian legislature’s intention to harmonise may be found in 
the new Tax Code, adopted by Law No 227/2015, Article 32 of which, governing 
domestic transactions, faithfully transposes Directive 2009/133. The explanatory 
memorandum to the new Tax Code, which is not, however, applicable in the 
present case, makes clear the intention to remedy the inconsistency in the 
definition of the types of merger, which had resulted in a different approach being 
taken to domestic transactions from that for cross-border transactions. 
32 Since the tax authority and the appellate court took the view that the transaction 
between Bank A and Bank B was not a merger within the meaning of 
Article 27(3) of the Tax Code, because the two conditions laid down in point (a) 
of that provision were not met, and given that Article 27(5) of the Tax Code 
corresponds to Article 7 of Directive 2009/133, the referring court asks the second 
question, in order to determine whether the benefit of the non-taxation of the 
income arising from the transaction in question is dependent on the classification 
of that transaction as a merger under national law. 
33 Next, the referring court states that Bank A applied International Financial 
Reporting Standard IFRS 3 – Business Combinations and recorded the difference 
between the price which it paid to acquire the shares and the fair value of Bank 
B’s assets and liabilities at the time of the merger in its profit and loss account as a 
profit arising from an acquisition on favourable terms. By contrast, in the case of 
businesses which do not apply the International Financial Reporting Standards, 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-827/21 
 
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but instead the common framework for financial reporting, the difference between 
the market value of the net assets transferred and the accounting par value of the 
shares held by the acquiring company which correspond to those assets is not 
recorded in the acquiring company’s profit and loss account. 
34 It is because the tax authority and the appellate court concluded that the recording 
of that profit in the acquiring bank’s profit and loss account demonstrates that the 
income is taxable that the referring court has raised the third question for a 
preliminary ruling.