Judgment;Summary — ECLI:EU:C:2021:936
Date: 2021-11-18
Language of the case: Romanian
Court formation: Eighth Chamber
Subject matter: Taxation
Procedure: Reference for a preliminary ruling
Origin: Romania

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 July 2020 
Referring court:  
Judecătoria Oradea (Romania) 
Date of the decision to refer:  
9 July 2020 
Applicant:  
Promexor Trade SRL 
Defendant: 
Direcția Generală a Finanțelor Publice Cluj – Administrația 
Județeană a Finanțelor Publice Bihor 
  
Subject matter of the main proceedings 
Application by which the applicant, Promexor Trade SRL, requests that the 
referring court, the Judecătoria Oradea (District Court, Oradea, Romania), in 
respect of the defendant, the Direcția Generală Regională a Finanțelor Publice 
Cluj – Administrația Județeană a Finanțelor Publice Bihor (Regional Directorate-
General of Public Finances of Cluj – Regional Public Finance Administration of 
Bihor), annul the order for payment of 19 April 2019 and the enforcement order of 
19 April 2019, issued in enforcement proceedings brought against the applicant, 
and annul the credit instrument and the enforcement concerned. 
Subject matter and legal basis of the request for a preliminary ruling 
An interpretation of Article 5(4) TEU, Articles 1, 167 to 169, 176 to 180, 214(1), 
250, 272 and 273 of Directive 2006/112/EC, and of the principles of neutrality, 
effectiveness, sincere cooperation, certainty of legal relations and protection of 
legitimate expectations, is sought pursuant to Article 267 TFEU. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-358/20 
 
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Questions referred 
1. Do the provisions of Directive 2006/112/EC and the principle of fiscal 
neutrality preclude national legislation by which a Member State requires a citizen 
to collect and pay VAT to the State for an indefinite period without, however, at 
the same time granting him the right to deduct VAT on the ground that the VAT 
code had been revoked since no transactions subject to VAT had been indicated in 
the VAT returns filed for six consecutive months/two consecutive calendar 
quarters? 
2. With regard to the circumstances of the main proceedings, are the principle 
of legal certainty, the principle of legitimate expectations, the principle of 
proportionality and [the principle] of sincere cooperation, as set out in Directive 
2006/112/EC, compatible with national legislation or with a practice of the tax 
authority according to which, although the Member State normally allows a legal 
person, on request, to re-register for VAT purposes following automatic 
revocation of the VAT code, in certain specific circumstances a taxpayer may not 
request re-registration for VAT purposes, for purely formal reasons, whilst being 
obliged to collect and pay VAT to the State, for an indeterminate period, without, 
however, at the same time being granted the right to deduct VAT? 
3. With regard to the circumstances of the main proceedings, are the principle 
of legal certainty, the principle of legitimate expectations, the principle of 
proportionality and [the principle] of sincere cooperation, as set out in Directive 
2006/112/EC, to be interpreted as prohibiting the imposition on a taxpayer of a 
requirement to collect and pay VAT for an indefinite period and without granting 
the right to deduct VAT, without, in the particular case, the tax authority in 
question verifying the substantive requirements relating to the right to deduct 
VAT and without there being any fraud on the part of the taxpayer? 
Provisions of EU law cited 
Treaty on European Union, Articles 5(4) and 4(3) 
Directive 2006/112/EC on the common system of value added tax (VAT), as 
amended by Directive 2010/45/EU, Articles 1(1), 167 to 169, 176 to 180, 214(1) 
and 250, 272 and 273 
Provisions of national law cited 
Legea nr. 571/2003 privind Codul fiscal (Law No 571/2003 establishing the Tax 
Code), in force until 31 December 2015 
Article 153(9)(e), which essentially provides that the competent tax authorities are 
to revoke the registration of a taxable person for VAT purposes if, in the tax 
returns filed for six consecutive months, no purchases of goods/services or 
PROMEXOR TRADE 
 
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supplies of goods/services made in the course of those reference periods have 
been indicated. 
Article 153(91)(d), under which, following revocation of registration for VAT 
purposes, the competent tax authorities are to register taxable persons for the 
purposes of VAT at their request, in the case provided for in paragraph 9(e), on 
the basis of a declaration of honour stating that they will carry out economic 
activities. Furthermore, taxable persons in such a situation cannot apply the 
provisions relating to the exemption threshold for small undertakings. 
Article 11(13), under which taxpayers whose registration for VAT purposes has 
been revoked, are not, for the period in question, to enjoy the right to deduct VAT 
on purchases made, but are to be liable to pay VAT collected in respect of taxable 
transactions carried out during that period. As regards purchases of goods and/or 
services made during the period in which the relevant person has no valid VAT 
code, which are intended for transactions to be made after the VAT registration 
date and which give rise to the right to deduct, adjustments are to be made in 
favour of the taxable person, by means of inclusion in the first tax return 
submitted by the taxable person following the registration for VAT purposes or, as 
the case may be, in a subsequent return, in respect of tax relating to the following: 
(a) goods stored and services not used at the time of the registration, as certified 
on the basis of an inventory; (b) tangible fixed assets, including capital assets for 
which the adjustment period for the deduction has not expired, and tangible fixed 
assets in the process of implementation, as certified on the basis of inventory, 
which are owned by him at the time of registration. 
Article 145, which provides that the right to deduct is to arise at the time when the 
tax becomes chargeable [paragraph 1], that every taxable person has the right to 
deduct tax on purchases where they are intended for certain transactions expressly 
provided for [paragraph 2], and that, under certain conditions, the right to deduct 
tax is to be granted for purchases made by a taxable person before he is registered 
for the purposes of VAT [paragraph 4]. 
Legea nr. 227/2015 privind Codul fiscal (Law No 227/2015 establishing the Tax 
Code), in force as from 1 January 2016 
Article 11(8), which essentially provides that taxable persons whose registration 
for VAT purposes has been revoked are not, for the period in question, to enjoy 
the right to deduct VAT on purchases made, but are to be liable to pay VAT 
collected in respect of taxable transactions carried out during that period. In the 
case of registration for the purposes of VAT, under Article 316(12) a taxable 
person is to exercise the right to deduct as regards purchases of goods and/or 
services made during the period in which his VAT identification code was 
revoked, by means of inclusion in the first tax return filed after registration or, as 
the case may be, in a subsequent return, even if the invoice does not contain the 
VAT identification code of the taxable person. After registration for tax purposes 
pursuant to Article 316(12), as regards supplies of goods/services made during the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-358/20 
 
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period in which the VAT identification code was revoked, taxable persons are to 
issue invoices including separately the VAT collected during the period in 
question. 
Article 316(12)(d), which essentially corresponds to Article 153(91)(d) of Law 
No 571/2003 
Article 297(1), (4) and (6), which reproduces the provisions of Article 145(1), (2) 
and (4) of Law No 571/2003 
Succinct presentation of the facts and the main proceedings 
1 On 30 April 2014 the defendant ordered, by way of a decision, the automatic 
revocation of the applicant’s registration for purposes of VAT on the ground that 
no transactions subject to VAT had been indicated in the VAT returns filed for six 
consecutive months. As from May 2014, since it no longer held a valid code, the 
applicant issued tax invoices without VAT. 
2 In the course of April 2019, the applicant was informed by the defendant that a tax 
inspection covering the period from 1 April 2014 to 31 December 2017 was 
imminent. In order to avoid payment of a fine for failure to file tax returns within 
the prescribed periods, the applicant decided to file retroactively the return 
relating to the VAT collected, as taxable persons whose VAT identification code 
has been revoked are required to do. 
3 On the basis of the content of the respective returns and without carrying out 
additional checks, the defendant, on 19 April 2019, issued an enforcement order 
and initiated enforcement proceedings against the applicant by issuing the order 
dated 19 April 2019. 
4 The tax inspection took place on 11 June 2019; the inspection body took the view 
that, as regards the period under investigation, the applicant had filed VAT returns 
correctly. 
5 After the date on which the inspection was completed, but within the time limit, 
the applicant filed, on 31 July 2019, adjusted returns in the amount of 0. 
The essential arguments of the parties to the main proceedings 
6 The applicant claims that, although there are tax remedies in the event of 
revocation of a taxpayer’s VAT identification code, in the sense that after re-
registration as a taxable person for the purposes of VAT a company has the 
opportunity to enjoy, retroactively, deduction of VAT in respect of the period 
during which it did not possess a VAT code, these are not actually available to the 
applicant. 
PROMEXOR TRADE 
 
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7 It submits that a taxpayer whose VAT code has been revoked, but who, for 
various reasons, does not re-register, has no remedy available to him. 
Consequently, maintaining his obligation to pay VAT for an indefinite period, in a 
situation where he no longer has any type of enjoyment resulting from his status 
as a taxable person for the purposes of VAT, is contrary to the principles laid 
down in this regard in the case-law of the Court of Justice. 
8 The defendant contends that the VAT returns to be submitted by taxable persons 
whose VAT identification code has been revoked were duly filed by the applicant 
and made on his honour. Under the legislation in force, adjustment of an income 
tax return is no longer possible after the tax inspection has been completed. 
Succinct presentation of the reasons for the request for a preliminary ruling 
9 The referring court raises the issue of the compatibility of the national legislation 
applicable to the dispute with the principles resulting from Directive 2006/112 and 
the case-law of the Court of Justice in a case where, following revocation of 
registration for the purposes of VAT, the taxpayer no longer has the right to 
deduct VAT on the purchases made, but remains subject to the obligation to pay 
the VAT collected, and with no time limit being laid down in relation to the 
obligation to collect. 
10 Although the right to deduct can be exercised retroactively after re-registration for 
purposes of VAT, the applicant does not actually have that possibility since it does 
not satisfy a formal requirement inasmuch as its director is a partner in another 
company which is subject to insolvency proceedings. 
11 Since it is unable even to avail itself of the exemption regime applicable to small 
undertakings, the applicant is precluded, for an indefinite period, from the right to 
deduct VAT without being able to enjoy the VAT system. 
12 Regarding the principle of fiscal neutrality, the referring court refers to the 
judgments in Elida Gibbs (C-317/94), Kraft Foods Polska (C-588/10), Zabrus 
Siret (C-81/17), Gamesa Wind România (C-69/17), Dobre (C-159/17) and Astone 
(C-332/15), stating that the circumstances underlying those judgments are 
nevertheless different from those of the present case. 
13 The applicant’s inability to re-register for purposes of VAT and thus to enjoy the 
right to deduct is, in the view of the referring court, tantamount to failure to 
comply with a formal requirement. In addition, it was not impossible for the tax 
authorities to verify that the substantive requirements of the right to deduct were 
satisfied. 
14 Regarding the principle of proportionality, the referring court states, with 
reference to the judgments in Collée (C-146/05) and Salomie and Oltean 
(C-183/14), that an absolute refusal of the right to deduct may appear 
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disproportionate in the case of the applicant since there is no fraud and the 
substantive requirements were not verified by the tax authority. 
15 Since, in the present case, the defendant did not verify that the substantive 
requirements were satisfied and the applicant is thus required sine die to collect 
the VAT, being in a continuous situation of uncertainty as it is unaware of the 
extent of its obligations and does have available to it a legal instrument enabling it 
to enjoy the VAT system, the referring court raises, with reference to the 
judgment in Ireland v Commission (325/85), the issue of infringement of the 
principles of legal certainty and protection of legitimate expectations and, from 
the point of view of the obligations imposed on States by Directive 2006/112, of 
the principle of sincere cooperation.