Judgment;Summary — ECLI:EU:C:2020:581
Date: 2020-07-16
Language of the case: Romanian
Court formation: Sixth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Romania

Summary C-424/19 — 1 
Case C-424/19 
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: 
29 May 2019 
Referring court: 
Curtea de Apel București (Romania) 
Date of the decision to refer: 
15 February 2019 
Applicant and appellant: 
Cabinet de avocat UR 
Defendants and respondents: 
Administrația Sector 3 a Finanțelor Publice prin Direcția Generală 
Regională a Finanțelor Publice București 
Administrația Sector 3 a Finanțelor Publice 
MJ 
NK 
  
Subject matter of the main proceedings 
Appeal brought by Cabinet de avocat UR (UR Law Office), appellant and 
applicant at first instance (‘the applicant’), in proceedings against the 
Administrația Sector 3 a Finanțelor Publice prin Direcția Generală Regională a 
Finanțelor Publice București (Directorate-General of Public Finances, Bucharest, 
Romania, representing the Public Finance Authority, Sector 3), against the 
Administrația Sector 3 a Finanțelor Publice (Public Finance Authority, Sector 3), 
and against MJ and NK, respondents and defendants at first instance (‘the 
defendants’), against the judgment of the Tribunalul București (Regional Court, 
Bucharest, Romania), in which the court dismissed its application for removal 
from the register of taxable persons for the purposes of value added tax (VAT) 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-424/19 
 
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and for the reimbursement of the VAT which it had paid between 2010 and 2014 
following its allegedly wrongful registration as a taxable person for VAT 
purposes. 
Subject matter and legal basis of the request for a preliminary ruling 
Pursuant to Article 267 TFEU, read in conjunction with Article 19(3)(b) TEU, the 
Curtea de Apel București (Court of Appeal, Bucharest, Romania) requests 
interpretation of Article 9(1) of Council Directive 2006/112/EC on the common 
system of value added tax, and of the principle of the primacy of EU law. 
Questions referred 
1. In the context of the application of Article 9(1) of Council Directive 
2006/112/EC (on the common system of value added tax), does the concept 
of ‘taxable person’ include persons who practice the profession of lawyer? 
2. Does the principle of the primacy of EU law permit an exception to be 
made, in subsequent proceedings, to the authority of res judicata attaching 
to a final judicial decision in which it has been established, in essence, that, 
in accordance with national value added tax legislation, as it is interpreted 
and applied, lawyers do not supply goods, do not carry out an economic 
activity and do not conclude contracts for the supply of services, but instead 
conclude contracts for legal assistance? 
EU law cited 
Article 9(1), Article 24(1) and Article 193 of Council Directive 2006/112/EC on 
the common system of value added tax 
Judgments of the Court of Justice in Case C-224/01, Köbler, Case C-492/08, 
Commission v France, Case C-62/12, Kostov, Case C-463/14, Asparuhovo Lake 
Investment Company, and Case C-543/14, Ordre des barreaux francophones et 
germanophone and Others 
Provisions of national law cited 
Articles 127, 129 and 150 of the Codul fiscal (Tax Code), which transpose into 
national legislation Articles 9, 24 and 193 of Directive 2006/112 
Articles 1341 and 1344 of the Codul civil (Civil Code), which relate to undue 
payments 
Articles 431 and 432 of the Codul de procedură civilă (Code of Civil Procedure), 
which concern the authority of res judicata 
CABINET DE AVOCAT UR 
 
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Article 15 of Legea nr. 51/1995 pentru organizarea și exercitarea profesiei de 
avocat (Law No 51/1995 on the organisation and practice of the profession of 
lawyer), pursuant to which the practice of that profession is incompatible with the 
direct carrying out of a commercial activity 
Outline of the facts and the main proceedings 
1 By application lodged at the Tribunalul București (Regional Court, Bucharest) the 
applicant, Cabinet de avocat UR (‘UR Law Office’), sought an order requiring 
Administrația Sector 3 a Finanțelor Publice (Public Finance Authority, Sector 3, 
Romania) to remove it from the register of taxable persons for the purposes of 
VAT, with effect from 2002, at which time the applicant had been mistakenly 
registered as a taxable person for VAT purposes; an order compelling the 
defendants jointly to repay the VAT wrongly levied between 2010 and 2014, 
amounting to a total of RON 1 016 804; an order requiring the defendants MJ and 
NK to pay a fine of 20% of the gross national minimum wage, for each day of 
delay, the sum to be entered as revenue in the State budget; an order requiring 
each of the defendants MJ and NK to pay it a late payment penalty of RON 1 000 
for each day of delay from 15 September 2015 onwards, by which date the 
defendants were required to remove the applicant from the register, and an order 
requiring all the defendants jointly to pay, for each day of delay, interest at 0.03% 
on the total sum of RON 1 016 804, calculated from the date of each individual 
payment made by the applicant up to its actual refund by the defendants. 
2 In the grounds for its application, the applicant essentially stated that, on 28 May 
2015, it had requested its removal from the register of taxable persons for the 
purposes of VAT and the reimbursement of the VAT wrongly levied, on the 
ground that it had wrongly been registered as a taxable person for VAT purposes 
despite the fact that the provisions relating to that tax had not applied and did not 
apply to it. The defendants had not acceded to that request, and so the applicant 
had issued proceedings before the abovementioned court. The applicant has 
asserted that the total sum of RON 1 016 804 which it paid by way of VAT 
between 2010 and 2014 was an undue payment, since, in reality, the debt which it 
extinguished did not exist. 
3 The defendants lodged a defence seeking the dismissal of the application, arguing, 
in essence, that the applicant was obliged to pay VAT since, in 2002, it had 
exceeded the turnover threshold under which it had been exempt from payment of 
the tax, which it had declared and paid to the tax authorities from that date. 
4 The applicant lodged a reply to that defence in which it contested the defendants’ 
contentions. It claimed, essentially, that it was engaged in legal work and had 
concluded and continued to conclude with its clients contracts for legal assistance 
and not contracts for the supply of services. The applicant argued that since it had 
not been carrying out any economic activity it was not subject to the provisions of 
the Tax Code relating to VAT. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-424/19 
 
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5 By judgment of 17 February 2017, the Tribunalul București (Regional Court, 
Bucharest) dismissed the applicant’s application as unfounded. In the grounds for 
its judgment, the court emphasised, essentially, that, in accordance with the Tax 
Code, any person who, independently, carries out in any place an economic 
activity, which includes the liberal professions, is deemed to be a taxable person, 
whatever the purpose or results of that activity. According to Law No 51/1995 on 
the organisation and practice of the profession of lawyer, that activity is a liberal 
profession and an independent occupation and thus falls within the scope of the 
Tax Code. The applicant is, therefore, a taxable person. The applicant’s 
submission that the practice of the profession of lawyer cannot be regarded as a 
supply of services was rejected, since the activities of the liberal professions, as 
those of lawyers, were mentioned separately in the Tax Code. Moreover, there is 
no legal provision for VAT exemption for the profession of lawyer. Thus, the 
applicant had been registered as a taxable person for VAT purposes in accordance 
with the law. 
6 The applicant has brought an appeal against that judgment before the Curtea de 
Apel București (Court of Appeal, Bucharest). 
Succinct presentation of the reasons for the request for a preliminary ruling 
7 The referring court states that it is common ground that, on 28 May 2015, when it 
put its request to the tax authority, the applicant was a taxable person, having 
exceeded, in 2002, the threshold [for exemption] laid down in the tax legislation. 
The applicant nevertheless seeks reimbursement of the sum at issue, on the ground 
that its payment was not due, since the activity which it carries out does not fall 
within any of the cases contemplated by the Tax Code.  
8 In support of its appeal, the applicant has invoked, among other things, the 
authority of res judicata of a judgment of 21 September 2016 of the Tribunalul 
București (Regional Court, Bucharest) and of a judgment of 30 April 2018 of the 
Curtea de Apel București (Court of Appeal, Bucharest), which were delivered in 
other proceedings concerning it. In the grounds for those judgments, it was stated 
that the applicant had not supplied any goods or services within the meaning of 
the Tax Code, since it had not concluded with its clients contracts for the supply 
of services, but instead concluded contracts for legal assistance, which fell within 
the scope of Law No 51/1995 on the organisation and practice of the profession of 
lawyer and did not constitute contracts for the supply of services within the 
meaning of that law. 
9 The referring court states that, according to national law, the authority of res 
judicata of a judicial decision may have both a negative effect and a positive 
effect. The negative effect of the res judicata prevents new proceedings from 
being brought where the parties, the cause of action and the object are all the same 
as in the previous proceedings. This is to prevent contradictions between the 
operative parts of judicial decisions. The positive effect of the authority of res 
CABINET DE AVOCAT UR 
 
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judicata enables any of the parties to invoke a previous decision that has acquired 
the force of res judicata in any new dispute that has a connection with the earlier 
decision. In so far as the positive effect is concerned, there is no need for 
fulfilment of the condition relating to the identity of the three aspects of the 
procedural legal relationship (parties, cause of action and object), as there is in the 
case of the negative effect. There merely needs to be a connection with the 
previous decision that has acquired the force of res judicata and the new 
proceedings will be bound by that previous decision, so that there is no departure 
from the earlier ruling of a different court. The positive effect of the authority of 
res judicata does not require an identity of actions, but only the identity of the 
litigious issues raised in the two sets of proceedings, with the effect that it may be 
put forward as a defence as to the merits. In addition, under the Code of Civil 
Procedure, the authority of res judicata is not confined to the operative part of a 
judgment, but also extends to the reasoning upon which the judgment is based, 
including the reasoning followed in order to resolve a litigious issue. 
10 The referring court states that, in order not to prejudge the outcome of the present 
case, it cannot confirm whether or not the judgments mentioned above have the 
positive effect of res judicata. However, if they do have that positive effect, the 
abovementioned grounds of those two judgments will be likely to influence the 
decision to be given in the case that is now before it. 
11 In that context, in so far as concerns the first question referred for a preliminary 
ruling, which concerns the concept of ‘taxable person’ within the meaning of 
Directive 2006/112, the referring court cites the following case-law of the Court 
of Justice: Case C-492/08, Commission v France, Case C-62/12, Kostov, Case 
C-463/14, Asparuhovo Lake Investment Company, and Case C-543/14, Ordre des 
barreaux francophones et germanophone and Others. 
12 However, the referring court finds that, while the points dealt with specifically by 
the Court in those cases may offer useful guidance for the resolution of the dispute 
that is before it, they do not establish with certainty whether the activity carried 
out by a lawyer, such as that at issue in the present case, falls within the scope of 
Directive 2006/112. 
13 Furthermore, the referring court points out that, in the event that, adopting an 
interpretation of national law that is consistent with the answer provided by the 
Court to the first question referred for a preliminary ruling, it should conclude that 
the activity carried out by the applicant is subject to VAT, an answer to the second 
question referred will then be necessary, that is to say, the question whether the 
principle of the primacy of EU law permits an exception to be made, in 
subsequent proceedings, to the authority of res judicata attaching to a final 
judicial decision.  
14 With regard to the second question, the referring court points out that the Court 
has already held, in paragraph 38 of its judgment in Case C-224/01, Köbler, that 
the importance of the principle of res judicata cannot be disputed and that, in 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-424/19 
 
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order to ensure both stability of the law and legal relations and the sound 
administration of justice, it is important that judicial decisions which have become 
definitive after all rights of appeal have been exhausted or after expiry of the time-
limits provided for in that connection can no longer be called in question. 
15 The referring court is thus faced with two fundamental principles the application 
of which in the case before it cannot be reconciled. There is the principle of the 
primacy of EU law and the principle of the authority of res judicata attaching to 
final judicial decisions and which will apply in subsequent proceedings. The 
referring court must therefore establish in which order these principles apply, all 
the more so since each of them could lead to a diametrically different resolution of 
the dispute: if the first principle is applied, it may be necessary to dismiss the 
appeal, in light of the relevant EU law; if the second is applied, it may be possible 
to uphold the appeal, in light of the aspects on which the earlier judgments have 
already ruled. 
16 Finally, the referring court states that it has not identified any judgment of the 
Court of Justice in which an answer is given to the questions referred for a 
preliminary ruling and that it is not possible to apply the Court’s existing case-law 
to the present dispute mutatis mutandis, given the particular features of the present 
case.