Opinion of the Advocate General — ECLI:EU:C:2023:35
Date: 2023-01-19
Language of the case: Romanian
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Romania

Summary C-461/21 – 1 
Case C-461/21 
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: 
27 July 2021 
Referring court: 
Tribunalul Prahova (Romania) 
Date of the decision to refer: 
17 June 2021 
Applicant: 
SC Cartrans Preda SRL 
Defendant: 
Direcția Generală Regională a Finanțelor Publice Ploiești – 
Administrația Județeană a Finanțelor Publice Prahova 
  
Subject matter of the main proceedings 
Administrative action challenging a tax assessment requiring the applicant to pay 
the sum of RON 1 529 by way of additional value added tax (VAT) and the sum 
of RON 79 478 by way of tax on income earned by non-residents 
Subject matter and legal basis of the request 
Pursuant to Article 267 TFUE, the referring court seeks interpretation of 
Articles 56 and 57 TFEU and Articles 86(1)(b) and (2) and 144 of Council 
Directive 2006/112/EC of 28 November 2006 on the common system of value 
added tax. 
Questions referred for a preliminary ruling 
1. For the purposes of granting a VAT exemption for transport operations and 
services relating to the importation of goods, in accordance with Council 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-461/21 
 
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Directive 2006/112/EC of 28 November 2006 on the common system of 
value added tax, are the provisions of Article 86(1)(b) and (2) to be 
interpreted as meaning that the recording of an import operation (for 
example, the raising of an entry summary declaration by the customs 
authority by means of the allocation of a number referred to as the MRN or 
Master Reference Number) always entails the inclusion, in the basis of 
calculation of the customs value, of the transport costs up to the first place of 
destination of the goods in the territory of the Member State of importation. 
Does the existence of an MRN, in relation to which there is no valid 
evidence of fraud, implicitly substantiate the fact that all the expenses 
provided for in Article 86(1)(a) and (b) have been included in the customs 
taxable basis? 
2. Do the provisions of Articles 144 and 86(1)(b) and (2) of Directive 
[2006/112] preclude the Member State’s taxation practice by which the VAT 
exemption for transport services relating to the importation of goods into the 
[European Union] is refused on the ground that no strictly formal proof of 
the inclusion of transport costs in the customs value has been provided, even 
where, first, other relevant documents accompanying the import – the 
summary declaration and the CMR consignment note showing delivery to 
the recipient ‒ have been produced and, second, there is no evidence to cast 
doubt on the authenticity and reliability of the summary declaration or CMR 
consignment note? 
3. With reference to the provisions of Article 57 TFEU, does the recovery of 
VAT and excise duties from the tax authorities of more than one Member 
State constitute an intra-Community supply of services or the activity of a 
general commission agent acting as an intermediary in a commercial 
transaction? 
4. Is Article 56 TFEU to be interpreted as meaning that there is a restriction on 
the free movement of services where the recipient of a service supplied by a 
service provider established in a different Member State is required, under 
the legislation of the Member State in which the recipient is established, to 
withhold tax on the remuneration due for the service supplied, while there is 
no such requirement where the same service is provided under a contract 
with a service provider established in the same Member State as that in 
which the recipient is established? 
5. Is the tax treatment in the State in which the payer of the income is resident 
a factor which renders the freedom to provide services less attractive or 
more difficult where, in order to avoid the levying of a 4% withholding tax, 
the resident must confine itself to cooperation in the recovery of VAT and 
excise duties with entities which are also resident, to the exclusion of entities 
established in other Member States? 
CARTRANS PREDA 
 
3 
6. Can the fact that a tax of 4% (or 16% in some cases) of the gross amount is 
levied on the income received by a non-resident, while the corporation tax 
for a service provider resident in the same Member State is (if it makes a 
profit) levied at the rate of 16% of the net amount, also be regarded as an 
infringement of Article 56 TFEU, since it constitutes another factor which 
renders the freedom of non-residents to provide the services in question less 
attractive or more difficult? 
Provisions of European Union law relied on 
Articles 56 and 57 TFEU 
Article 86(1)(b) and (2) and Article 144 of Directive 2006/112 
Provisions of national law relied on 
Article 294(1)(d), Article 294(2) and Article 296 of Legea nr. 227/2015 privind 
Codul fiscal (Law No 227/2015 establishing the Tax Code, ‘the 2015 Tax Code’), 
read in conjunction with Ordinul Ministrului Finanțelor Publice nr. 103/2016 
(Order No 103/2016 of the Minister for Public Finance), which essentially provide 
that VAT exemption for the supply of international transport services is 
conditional on the existence of documents showing that the services are directly 
related to the importation of goods. 
Article 115(1)(f) of Legea nr. 571/2003 privind Codul fiscal (Law No 571/2003 
establishing the Tax Code, ‘the 2003 Tax Code’) and Article 223(1)(f) of the 2015 
Tax Code, in accordance with which commission received from a resident is 
considered to be taxable income earned in Romania, whether it is received in 
Romania or abroad. 
Article 7(9) of the 2003 Tax Code and Article 7(9) of the 2015 Tax Code, in 
accordance with which any payment in cash or in kind made to a broker, a general 
commission agent, or any person treated as a broker or general commission agent 
on account of intermediation services carried out in connection with an economic 
transaction constitutes commission. 
Article 12 of the Convention between the Kingdom of Denmark and the Socialist 
Republic of Romania for the Avoidance of Double Taxation with respect to Taxes 
on Income and Capital, signed at Copenhagen on 13 December 1976, (‘the double 
taxation convention’), in accordance with which commission arising in one 
contracting State and paid to a resident of another contracting State may be taxed 
in that other State. [Such commissions may also be taxed in the contracting State 
in which they arise,] but the tax so charged may not exceed 4% of the amount of 
the commissions. In accordance with the same article, commissions are payments 
made to an intermediary (broker), a general commission agent or any other person 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-461/21 
 
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treated as such an intermediary or agent under the tax laws of the contracting State 
in which the payment arises. 
Article 7(1) of the double taxation convention, which provides that the profits of 
an undertaking in a contracting State are taxable only in that State, except where 
the undertaking carries on activities in another contracting State through a 
permanent establishment in that other State. 
Succinct presentation of the facts and procedure in the main proceedings 
1 Following an inspection carried out by the Romanian tax authorities between 
18 November 2019 and 7 February 2020 at the applicant company, SC Cartrans 
Preda SRL, a road haulage services operator with registered offices in Romania, a 
tax assessment was issued which required the applicant to pay the sum of 
RON 1 529 by way of additional VAT and the sum of RON 79 478 by way of tax 
on income earned by non-residents. 
2 The tax assessment stated that, in respect of road haulage services carried out 
between the port of Rotterdam (Netherlands), the place where the goods entered 
the European Union, and Cluj-Napoca (Romania), the place of destination of the 
goods, the applicant had failed to produce documents certifying that the haulage 
services were directly related to the importation of the goods, as is required by the 
national tax legislation. 
3 The assessment also stated that the applicant had concluded a contract with the 
Danish company FDE Holding A/S assigning to that company the right to claim 
on its behalf the refund of VAT on intra-Community acquisitions of goods. Under 
that contract, FDE Holding, acting in its capacity as the applicant’s legal 
representative, attended to all the requisite formalities for the refund of VAT. The 
fees for those services were calculated as a percentage of the amount of VAT 
refunded in each country. 
4 According to the Romanian tax authorities, the fees charged by FDE Holding 
constituted commissions in relation to which the applicant had failed to calculate, 
withhold, declare and pay tax on income earned by non-residents, by applying to 
the gross income the rate of 4% stipulated in the double taxation convention 
between Romania and Denmark. 
5 The applicant has challenged that assessment before the referring court, arguing, 
first, that it should be exempted from paying the VAT, since the transport costs 
are necessarily included in the customs value on entry into the country of 
destination. The applicant states that, in accordance with Article 144 of Directive 
2006/112, read in conjunction with Article 86(1)(b) thereof, the cost of transport 
to the first place of destination in the Member State of importation is necessarily 
included in the calculation of the taxable amount for VAT purposes of the 
imported goods, that first place of destination being, in accordance with 
Article 86(2) of the directive, the place mentioned in the document under which 
CARTRANS PREDA 
 
5 
the goods are imported into the Member State of importation. In the present case, 
the first place of destination in the European Union, Cluj-Napoca, is mentioned in 
the consignment note and in the transit declaration which the applicant produced 
during the tax inspection. 
6 Secondly, concerning the assessment of the tax on the income earned in Romania 
by the non-resident company FDE Holding, the applicant submits that that income 
is not commission but is the consideration for the provision of services which, in 
accordance with the double taxation convention between Romania and Denmark, 
is taxable only in Denmark. 
The essential arguments of the parties in the main proceedings 
7 With regard to the first two questions referred, the applicant submits that, in 
accordance with Article 144 of Directive 2006/112, the Member States are to 
exempt from VAT the supply of services relating to the importation of goods 
where the value of such services is included in the taxable amount in accordance 
with Article 86(1)(b) of that directive. Under Article 86, the taxable amount 
includes incidental expenses, such as commission, packing, transport and 
insurance costs incurred up to the first place of destination of the goods within the 
territory of the Member State of importation. Article 86(2) of the directive 
provides that the ‘first place of destination’ means the place mentioned in the 
consignment note or in any other document under which the goods are imported 
into the Member State of importation. 
8 According to the applicant, both the summary transit declaration and the CMR 
consignment note clearly mention the identity of the consignee of the import, 
which is a trading company in Cluj-Napoca. That means that, when the goods 
entered the territory of the European Union, the competent customs authority 
rightly included in the customs tariff the costs of transport to that destination, in 
accordance with Article 86(1)(b) of the directive. 
9 Consequently, given that Directive 2006/112 prevails over domestic law, the 
applicant considers that the condition for exempting it from payment of the VAT 
on the transport services in question is fulfilled.  
10 With regard to the third to sixth questions referred, the applicant submits that the 
tax inspectorate mistakenly classified the income earned in Romania by the non-
resident legal person FDE Holding as commission received from a resident (in this 
case, the applicant), which, in accordance with the Tax Code, constitutes taxable 
income earned in Romania. 
11 According to the applicant, the remuneration which it paid to FDE Holding was 
the consideration for services provided, not commission, and consequently 
Article 7(1) of the double taxation convention, pursuant to which the profits of an 
undertaking in a contracting State are taxable only in that State, applies in this 
case. FDE Holding has produced tax certificates showing that, in accordance with 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-461/21 
 
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the law, it paid tax in Denmark on the sums which it received from the applicant 
in Romania. 
12 The applicant also states that it has concluded a VAT recovery agreement with 
AS24 Tankservice SRL, a legal person resident in Romania, and that, although the 
value of those services is again calculated as a percentage of the sums recovered, 
it does not have to pay withholding tax on the income earned by AS24 
Tankservice, since it is a Romanian legal person. 
13 Therefore, the applicant submits that foreign VAT recovery services give rise to 
an obligation for Romanian residents to pay withholding tax only when the service 
is contracted with a resident of a different Member State. That results in a 
difference in treatment which constitutes a restriction on the freedom to provide 
services within the European Union, in breach of Articles 56 and 57 TFEU. 
14 With regard to the first two questions referred, the defendant, for its part, 
considers that the national VAT provisions are consistent with the provisions of 
Directive 2006/112, inasmuch as supplies of services, including transport and 
services incidental to transport, are exempt from VAT if they are directly related 
to the importation of goods and the value of the services is included in the taxable 
amount of the imported goods. 
15 However, according to the defendant, the applicant has not produced documents 
showing that the goods transported were imported into the EU and that the value 
of the services was included in the taxable amount of the imported goods. 
16 With regard to the third to sixth questions referred, the defendant argues that, by 
concluding the contract with FDE Holding, the applicant assigned to that company 
the right to claim the reimbursement of VAT on intra-Community acquisitions of 
goods, and that the fees charged for those services fall into the category of 
commissions, since they are not determined as fixed sums but are instead 
calculated as a percentage of the amount recovered. 
17 According to the defendant’s submissions, the national provisions relating to the 
tax on the income from commissions earned in Romania by non-residents, on 
which the tax assessment is based, do not infringe EU law, since the tax rate 
applied to those commissions is the most favourable rate provided for in national 
law, in EU law and in the conventions for the avoidance of double taxation to 
which Romania is a party. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
18 The referring court confirms that it is called upon to ascertain the legality of a tax 
assessment issued by the defendant and imposing additional tax liabilities on the 
applicant in the form of VAT and tax on the income from commissions earned in 
Romania by non-residents. 
CARTRANS PREDA 
 
7 
19 As regards the tax on the income from commissions earned in Romania by non-
residents, the defendant has taken the view that the sums which the applicant paid 
to the non-resident legal person FDE Holding A/S, established in Denmark, 
pursuant to an agreement concluded on 3 November 2005 and concerning the 
recovery by FDE Holding of the VAT on the fuel purchased by the applicant in 
the Member States of the European Union, constitute commissions in relation to 
which the applicant failed to calculate, withhold, declare and pay the tax on 
income earned by non-residents, by applying to the gross income the rate of 4% 
stipulated in the double taxation convention between Romania and Denmark, thus 
infringing the national tax provisions. 
20 As regards the additional VAT assessed, that arose from the failure to produce 
documents showing that the goods transported had been imported into the 
European Union and from the applicant’s failure to prove that the value of the 
transport services had been included in the taxable amount of the imported goods. 
21 In that context, the referring court considers that the issue in this case is not 
strictly one of interpretation of domestic law and that the interpretation of 
provisions of EU law is necessary. More specifically, it is necessary to determine 
whether the tax authority’s method of calculating the VAT and the tax on income 
earned by non-residents follows the correct application of Articles 86(1)(b) and 
(2) and 144 of Directive 2006/112 and Articles 56 and 57 TFEU. The 
interpretation of those provisions of EU law will assist the referring court in 
reaching its ruling on the compatibility with those provisions of the national 
provisions underlying the tax assessment the annulment of which is sought. 
22 Indeed, should it be held that the method of classifying the services supplied by 
the non-resident legal person FDE Holding, the levying of tax on the income 
which that company earned and the analysis of the probative value of the 
documents certifying that the transported goods had been imported into the 
European Union are contrary to EU law, the issue of the annulment of the tax 
assessment will arise. 
23 Lastly, the referring court states that the reference to the Court of Justice in the 
present case is appropriate also in view of the fact that a new question of 
interpretation has arisen which is of general interest for the uniform application of 
EU law, inasmuch as the existing case-law does not provide the clarification 
which is needed in order to address this legal situation.