Judgment;Summary — ECLI:EU:C:2024:1024
Date: 2024-12-12
Language of the case: Romanian
Court formation: Sixth Chamber
Subject matter: Taxation;Value added tax
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: 
16 August 2023 
Referring court: 
Tribunalul Prahova (Romania) 
Date of the decision to refer: 
30 December 2022 
Applicant: 
Weatherford Atlas Gip SA 
Defendants: 
Agenția Națională de Administrare Fiscală – Direcția Generală de 
Soluționare a Contestațiilor 
Agenția Națională de Administrare Fiscală – Direcția Generală de 
Administrare a Marilor Contribuabili 
  
Subject matter of the main proceedings 
Action for partial annulment of the decision ruling on the administrative 
complaint lodged by Weatherford Atlas Gip SA, in so far as it dismisses the claim 
in the amount of 1 774 410 Romanian lei (RON) in respect of VAT, and 
annulment of the tax assessment notice concerning the main tax liabilities relating 
to the differences in the bases of assessment established in the context of the tax 
inspection of legal persons. The action also seeks a declaration that the tax 
inspection report on the basis of which the tax assessment notice was issued is 
unlawful and an order that the VAT paid by the applicant be refunded. 
Subject matter and legal basis of the request 
Pursuant to Article 267 TFEU, the interpretation of Articles 2 and 168 of 
Directive 2006/112 is sought. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-527/23 
 
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Questions referred for a preliminary ruling 
(1) Must Article 168 of Council Directive 2006/112/EC of 28 November 2006 
on the common system of value added tax, read in the light of the principle of 
fiscal neutrality, be interpreted as precluding, in circumstances such as those in the 
main proceedings, the tax authority from refusing a taxable person the right to 
deduct the value added tax paid in respect of administrative services acquired, 
where it is established that all the costs recorded for the services purchased have 
been included in the taxable person’s general costs and that the taxable person 
carries out only taxable transactions, that the supply of services is expressly 
confirmed by the tax authority and that the tax treatment applied is that of the 
reverse charge procedure (which precludes a loss to the Treasury)? 
(2) For the purposes of interpreting the provisions of Articles 2 and 168 of 
Council Directive 2006/112/EC of 28 November 2006 on the common system of 
value added tax, in circumstances such as those in the main proceedings, may the 
services of management and administration (namely assistance and consultancy in 
various fields, financial and legal advice) provided between intra-group 
companies for the benefit of different members of the group be regarded by each 
member in part as being used for the purposes of taxable transactions, that is to 
say, acquired for its own purposes? 
(3) For the purposes of interpreting Article 2 of Council Directive 2006/112/EC 
of 28 November 2006 on the common system of value added tax, where it is 
established that intra-group services are not supplied to a member of the group, 
may a company which is part of the group but is deemed not to have benefited 
from such services be regarded as a taxable person acting as such? 
Provisions of European Union law and case-law cited  
Council Directive 2006/112/EC of 28 November 2006 on the common system of 
value added tax (the ‘VAT Directive’): Articles 2(1), 9(1), 168, 178, 203 and 273 
Article 5(4) of the Treaty on European Union 
Article 5 of Protocol (No 2) to the Treaty on European Union on the application of 
the principles of subsidiarity and proportionality 
Cases: Midland Bank, C-98/98; Abbey National, C-408/98; Klub, C-153/11; 
Kretztechnik, C-465/03; SKF, C-29/08; Investrand, C-435/05 
Provisions of national law cited 
Legea nr. 227/2015 privind Codul fiscal (Law No 227/2015 establishing the Tax 
Code), Article 3(a), which lays down the following taxation principle: ‘the 
neutrality of tax measures with regard to the different categories of investors and 
WEATHERFORD ATLAS GIP 
 
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capital, ownership, which ensures an equal level of taxation for investors, 
Romanian capital and foreign capital’ 
Legea nr. 571/2003 privind Codul fiscal (Law No 571/2003 establishing the Tax 
Code), Article 126(1) [which lays down the cumulative conditions for taxable 
transactions and which, under point (a), provides for ‘transactions which, pursuant 
to Articles 128 to 130, constitute or are treated as a supply of goods or services, 
which are subject to tax, effected for consideration’]; Article 145(2) [which 
provides for the right of a taxable person to deduct tax on purchases if they are 
made for the purposes of certain transactions, including, under point (a), ‘taxable 
transactions’); Article 146(1) [laying down the conditions for exercising the right 
to deduct]; Article 150(1) and (2) 
Normele metodologice de aplicare a Legii nr. 571/2003 privind Codul fiscal, 
aprobate prin Hotărârea nr. 44/2004 a Guvernului (Methodological rules for 
implementing Law No 571/2003 establishing the Tax Code, approved by 
Government Decision No 44/2004): 
– point 2, paragraph (2), in conjunction with Article 126 of the 2003 Tax Code: 
‘Pursuant to Article 126(1)(a) of the Tax Code, a supply of goods and/or services 
must be made for consideration. The ‘consideration’ condition implies the 
existence of a direct link between the transaction and the consideration obtained. 
A transaction is taxable where it confers a benefit on the customer and the 
consideration obtained is linked to the benefit received, as follows: 
(a) the condition relating to the existence of a benefit for a customer is met 
where the supplier of goods or services undertakes to provide specific goods 
and/or services to the person making the payment or, failing payment, where the 
transaction has been made to enable such an undertaking to be entered into. That 
condition is consistent with services being collective, not admitting of precise 
measurement or being attributable to a legal obligation; (…)’. 
– point 41, in conjunction with Article 11, of the 2003 Tax Code: 
‘In the case of intra-group administration and management services, the following 
shall be taken into account: 
(a) between the affiliated persons, administrative, management, control, 
consultancy or other similar functions are deducted centrally or regionally through 
the parent company, on behalf of the entire group. No remuneration may be 
claimed for such activities, as their legal basis is the legal relationship that governs 
the form of business organisation or any other provision establishing the links 
between the entities. Such charges may be deducted only if those entities also 
provide services to the affiliates or if the price of the goods and the amount of the 
fees for the services provided also take into account the services or administrative 
costs. Such costs cannot be deducted by a subsidiary that uses those services on 
the strength of the legal relationship between them, exclusively under its own 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-527/23 
 
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conditions, because it would not have used those services if it had been an 
independent person; 
(b) the services must be actually provided. The mere existence of intra-group 
services is not sufficient, since, as a general rule, independent persons pay only for 
services actually provided. (…)’. 
Succinct presentation of the facts and procedure in the main proceedings 
1 The applicant, Weatherford Atlas Gip SA, has more than 50 years’ experience in 
providing coring, drilling and extraction services in the oil industry and geological 
and directional drilling services in Romania. The company is part of the 
Weatherford group (the ‘Group’), which is a group of companies offering a wide 
range of oil services worldwide: drilling, appraisal, well construction, 
intervention, abandonment, and so forth. 
2 By means of a merger by acquisition, the applicant took over Foserco SA, a 
member of the Group, the business of which consisted of services ancillary to the 
extraction of oil and natural gas, including prospecting. 
3 Following the merger by acquisition, the tax authorities carried out an inspection 
of the tax liabilities relating to income tax and VAT payable by Foserco SA and 
issued the decision to review those liabilities. During the period covered by the 
review, Foserco SA supplied drilling services to two customers. For the provision 
of those services, Foserco SA used general administrative services provided by 
companies in the Group, namely services relating to IT, human resources, 
marketing, optimisation of financial and accounting processes, finance and 
accounting, environmental protection, sales, and so forth. 
4 Those services were provided by specialised sectors of certain companies in the 
Group to various Group members, including the applicant. Since the companies 
that supplied the services were companies established outside Romanian territory, 
the reverse charge tax treatment was applied to those transactions for VAT 
purposes. 
5 Following the tax inspection, the inspection authorities issued the tax assessment 
notice and the tax inspection report, declaring that VAT relating to the services 
purchased could not be deducted because it had not been shown that those 
services had been supplied for the purposes of taxable transactions. The applicant 
appealed the notice and report, and the appeal was dismissed by decision of the 
tax authorities. 
WEATHERFORD ATLAS GIP 
 
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The essential arguments of the parties in the main proceedings 
6 The applicant requested that the Tribunalul Prahova (Regional Court, Prahova, 
Romania) should refer questions regarding the interpretation of EU law to the 
Court of Justice. 
7 As regards the first question, it submits that it is necessary to clarify the concept of 
the use of certain services for the purposes of taxable transactions, since the tax 
authorities have ruled that it is not entitled to deduct the VAT relating to those 
services. Those authorities do not dispute the actual provision of the services or 
their real existence and do not claim that there has been any tax fraud, since, in the 
present case, VAT was applied by means of the reverse charge mechanism, but 
they claim that the applicant has not demonstrated a link between the recorded 
supplies of services and its taxable transactions. In particular, given that the 
services purchased by the applicant are administrative services and that its 
employees corresponded with the service provider in relation to the services 
provided or participated in various training courses delivered by the service 
providers, the tax authorities’ allegations concern the need to purchase those 
services: in other words, how they benefited the applicant and how they were used 
for its taxable activities. 
8 The applicant argues that the case-law of the Court of Justice of the European 
Union has identified two rules that should be analysed in order to verify 
compliance with the requirement of services being purchased for the purposes of 
taxable transactions. 
9 The first rule is that the existence of a direct and immediate link between a 
particular input transaction and a particular output transaction or transactions 
giving rise to entitlement to deduct is required, in principle, before the taxable 
person is entitled to deduct input VAT, and that such a link exists where the 
acquisition costs form part of the cost components of the output transactions. In 
that regard, the applicant refers to Case C-98/98, Midland Bank. 
10 The second rule is that the taxable person is entitled to deduct even where there is 
no direct and immediate link between a particular input transaction and an output 
transaction or transactions giving rise to the right to deduct, where the costs of the 
services in question are part of the taxable person’s general costs. The applicant 
cites, in particular, the judgments in Midland Bank (C-98/98) and Abbey National 
(C-408/98), in which it was held that such costs are, as such, components of the 
price of the goods and services that it provides. Such costs do have a direct and 
immediate link with the taxable person’s economic activity as a whole. 
11 The applicant also relies on the cases of Investrand, SKF, Kretztechnik, BLP 
Group, Cibo Participationis and Securenta, but that case-law concerns output 
economic transactions carried out by persons who were either exempt from VAT 
or outside the scope of VAT. 
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12 According to the information provided by the applicant, there is currently no 
Court of Justice judgment on the interpretation of EU law to determine whether 
there is a direct and immediate link between the purchase of services and the 
taxable transactions of taxpayers carrying out exclusively taxable activities in 
cases where the total cost of the services was included in the selling price of the 
goods produced or in the taxpayer’s general costs. 
13 As regards the second question, the applicant maintains that it is necessary for the 
EU judicature to clarify whether the right to deduct VAT may be refused on the 
basis of a subjective assessment by the tax authority as to the necessity and 
appropriateness of acquiring the services at issue, given that Article 168 of the 
VAT Directive does not provide that, for the purposes of deducting VAT relating 
to input purchases, proof must be provided that such purchases are necessary for 
the economic activity, but merely lays down the condition that the purchases must 
be for the purpose of using the goods and services purchased for the taxed 
transactions of the taxable person. 
14 The services purchased by the applicant from the Group include, in addition to the 
consultancy provided to it directly, the drafting of procedures such as, for 
example, the procedure for invoicing customers electronically, the procedure 
relating to the management of employee services, and so forth, which were drawn 
up for several companies in the Group and were used by those companies, 
including the applicant company, with the cost of drafting and implementing the 
procedures being shared among the beneficiary companies. 
15 The tax authorities took the view that it had not been proven that the services in 
question had been provided in connection with and for the benefit of the applicant, 
suggesting that, in fact, they should not have been invoiced to the applicant 
because other Group entities, or even the Group as such, had made use of them, 
and that therefore they constituted shareholder costs and, thus, were not necessary. 
16 In the judgment of 26 April 2012, Balkan and Sea Properties and Provadinvest, 
C-621/10 and C-129/11, the Court of Justice held that the taxable amount for the 
supply of goods or services for consideration is the consideration actually received 
for them by the taxable person. 
17 The applicant therefore believes that the Court of Justice should clarify whether, 
in addition to the condition regarding the use of the services for the taxable 
person’s taxable transactions, Article 168 of the VAT Directive also imposes the 
requirement (whether distinct or included in the concept of ‘use for the purposes 
of taxable transactions’) that the services must be necessary for the taxable person 
and, above all, the criteria on the basis of which such an analysis may be carried 
out. 
18 As regards the third question, the applicant states that this is based on the tax 
authorities’ refusal of the right to deduct VAT for the services purchased by the 
applicant from the Group, on the ground that it did not provide proof that the 
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services were supplied for the purposes of its taxable transactions and for its 
benefit. 
19 In that regard, it cites the judgment in Serebryannay vek, Case C-283/12, which 
held that the possibility of classifying a transaction as a transaction for 
consideration requires only that there be a direct link between the supply of goods 
or the provision of services and the consideration actually received by the taxable 
person. 
20 If there is no link between the supply of services and the consideration received, 
the supply does not constitute a taxable transaction for VAT purposes. In that 
event, it is noted that if the service had not been supplied, it would not have 
existed, with the result that the transaction would no longer be taxable for VAT 
purposes. 
21 In so far as the tax authorities dispute that the applicant is the recipient of the 
intra-group supply of services, the applicant believes that it is necessary for the 
Court of Justice to clarify whether it satisfies the conditions for being regarded as 
a taxable person liable to pay VAT, in the light of Article 9 et seq. of Title III of 
the VAT Directive. 
22 The defendants have applied for a declaration that the request for a preliminary 
ruling addressed to the Court of Justice by the questions for a preliminary ruling 
referred by the applicant is inadmissible, on the ground that the applicant is in fact 
seeking to obtain from the Court a ruling giving guidance to the referring court on 
the specific outcome of the case. The defendants consider that it is for the national 
court before which the dispute has been brought to assess the facts at issue and to 
determine whether the Court’s case-law on the right to deduct VAT is applicable 
to the present case. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
23 Agreeing with the applicant, and disagreeing with the defendants’ arguments in 
that regard, the referring court considers that it is necessary and useful to clarify 
the applicable EU law before judgment is given on the substance of the case, and 
fully endorses the applicant’s arguments. 
24 In assessing whether it is appropriate to refer those questions to the Court of 
Justice for a preliminary ruling, the referring court takes account of the fact that 
the rules of EU law referred to in Articles 2 and 168 of the VAT Directive, which 
are at issue here and the interpretation of which is sought, are of considerable 
relevance to the outcome of the case, in view of the fact that VAT is a tax derived 
from EU legislation and that the common system of VAT is based on a series of 
principles that are generally binding in the European Union. 
25 In view of the impact and relevance in the present case of those provisions of EU 
law, the outcome of the present dispute is heavily dependent on their correct 
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interpretation by the Court of Justice, since the referring court must determine, on 
the basis of that interpretation, whether the approach of the tax authorities in the 
present case is consistent with the spirit of the EU legislation or, on the contrary, 
is incorrect. 
26 In that context, the Tribunalul Prahova considers that this is not strictly a question 
of interpretation of domestic law and that it is necessary to clarify the 
interpretation of Directive 2006/112 in relation to the aspects set out above. 
27 That being so, the Tribunalul Prahova considers that the conditions for 
admissibility are satisfied in the present case, since the answers to the questions 
formulated may provide clarity to the court and the parties on aspects relevant to 
the decision to be taken in this case, in which a new question of interpretation has 
been raised.