The primacy of EU law is not a favour the judge grants, it is an obligation the Constitution imposes on him personally. CJEU case law on VAT deduction, the plea of unlawfulness and the preliminary reference, with what actually works in a tax case and what merely sounds good.
A tax assessment decision (decizie de impunere), VAT of 1.4 million lei refused at the deduction stage because two suppliers had been declared inactive two years after the supplies and had not paid their own liabilities. The inspection report runs to 90 pages and does not contain a single sentence on what the client knew or should have known.
On a strictly domestic reading, the case looks lost. On a reading of EU law, it is an entirely different case: the refusal of deduction is conditional on the tax authority proving, with objective evidence, that the taxable person knew or should have known that it was participating in a transaction involved in fraud. This is not rhetoric: it is Kittel, it is Mahagében, it is Global Ink Trade.
And Article 11(11) of the Tax Code obliges ANAF itself (Romania's national tax administration), not only the judge, to take account of CJEU case law on VAT and excise duties.
Article 148(2) of the Constitution provides that European Union regulations of a binding nature take priority over conflicting provisions of domestic law. Article 148(4) adds that Parliament, the President, the Government and the judicial authority guarantee the fulfilment of these obligations.
The practical consequence is not that the judge ‘prefers’ EU law, but that he is obliged to disapply the conflicting domestic rule, without waiting for it to be repealed by the legislature or struck down by another court. This is where the difference from constitutional review lies, and the reason why, in tax matters, the European argument is often more effective than a plea of unconstitutionality.
‘In the field of value added tax and excise duties, the tax authorities and other national authorities must take account of the case law of the Court of Justice of the European Union.’ This is an obligation on the tax administration, not only on the court. An assessment decision that ignores CJEU case law expressly relied upon is not merely wrong on the merits, it is inadequately reasoned.
It is a ground for revision that a final judgment was given in breach of the primacy of EU law. In Decision no. 45/2016, the ÎCCJ (the High Court of Cassation and Justice) held that revision is admissible on the basis of CJEU judgments regardless of the date on which they were given and regardless of whether the European provisions were relied upon in the original proceedings. Time limit: one month from communication of the final judgment.
This is where most European arguments are lost: they are relied upon in matters where they have no place.
Harmonised by Directive 2006/112/EC and the Union's customs legislation. The most fertile ground, and the richest in usable case law.
Direct taxation is not harmonised, but member states must exercise their competence in a manner that respects the free movement of capital, of services, and freedom of establishment. Less favourable tax treatment of a cross-border situation compared with a comparable domestic one is a restriction that must be justified, including in the application of double tax treaties.
Directive 2016/1164 and Directive 2011/16, including the DAC6 reporting obligations, transposed into the Tax Code and the Tax Procedure Code; their interpretation belongs to the CJEU.
Article 41 (good administration), Article 47 (the right to an effective remedy), Article 7 (private life), Article 50 (ne bis in idem), but only within the limits set out below.
WARNING: The Charter is not a supplementary set of arguments that can be relied upon in every case. Under Article 51(1), it addresses member states only when they are implementing EU law. In a VAT dispute, that condition is met; in a purely domestic income tax dispute, it generally is not, and relying on the Charter there weakens the rest of the defence, because it signals to the court that the arguments were gathered rather than selected.
The second trap: Article 41 of the Charter addresses the institutions and bodies of the Union, not national administrations. What can be relied upon against ANAF is the general principle of EU law on respect for the rights of the defence, which, through Sopropé and Ispas, produces exactly the effects sought.
The line has been consistent for almost two decades and, in essence, says the same thing: the burden of establishing fraud rests on the tax authority, not on the taxpayer. This is the core of the discussion on the burden of proof in tax litigation.
C-439/04 and C-440/04: deduction may be refused only if it is established, by reference to objective evidence, that the taxable person knew or should have known that, through its purchase, it was participating in a transaction involved in VAT fraud.
C-80/11 and C-142/11: the tax authority cannot require, as a general rule, that the taxable person verify that the supplier had the goods available, was in a position to supply them, or had complied with its own declaration and payment obligations, when there is no indication of irregularities.
C-18/13: even where the supplier did not have the staff and means required, refusal remains conditional on the same demonstration of knowledge of the fraud.
C-537/22 (11 January 2024), the most recent and most usable restatement: the tax authority cannot merely rely on the supplier's irregularities, cannot impose vague due diligence obligations not defined by law, and the national court must disapply an interpretation of the supreme court that conflicts with EU law.
The translation into practice is simple. When the inspection report says ‘company X had no employees and did not declare the supplies’, that is a statement about a third party, not evidence about my client. The difference between the two is, as a rule, the whole case.
A Romanian case, referred by the ÎCCJ, in proceedings arising from an inspection by DGRFP Galați (the regional tax directorate for Galați), in which a supply was recharacterised as a transfer of assets outside the scope of VAT. The procedural detail is worth noting: in January 2023, the supreme court allowed a revision application based on the Court's case law, and only then referred the matter to the CJEU, precisely the mechanism of Article 21 of Legea nr. 554/2004 in operation. The Court held that Articles 168 and 203 of Directive 2006/112 do not preclude refusal of the deduction for the recharacterised transaction, but neutrality and effectiveness require that the taxable person be able to obtain reimbursement directly from the tax administration where recovery from the seller is impossible or excessively difficult. The judgment does not quash your assessment decision, but it opens a second action.
A 20% penalty applied automatically, without distinguishing between fraud and an error causing no loss to the budget, and without any possibility of individualisation, goes beyond what is necessary. The argument transposes whenever Romanian legislation applies a fixed percentage regardless of conduct.
Combining a tax penalty of a criminal nature with an actual criminal sentence, for the same conduct, is not automatically prohibited by Article 50 of the Charter. It is permitted only where the rules pursue an objective of general interest through clear provisions, contain coordination rules that limit the additional burden, and ensure that the overall severity remains no more than strictly necessary. Menci is not a shield, it is a proportionality test: it is used to ask the criminal court to take into account a tax penalty that has already become final, not to obtain an automatic acquittal. It is relevant whenever a tax inspection runs alongside a criminal case.
C-349/07, Sopropé: the addressee of a decision significantly affecting his interests must be able to put forward his point of view before it is adopted, within a reasonable period. C-298/16, Ispas (9 November 2017), a Romanian case, referred by the Cluj Court of Appeal: in inspection and VAT assessment proceedings, the individual must be able to obtain, on request, the information and documents from the administrative file taken into account by the authority, unless objectives of public interest justify restricting access.
The emphasis on ‘on request’ explains why Ispas is so often lost in practice: the request for access must be made in writing, during the proceedings, and the refusal, or the silence, must be recorded. Without that trace in the file, there is nothing to rely on in court.
This is where the most common strategic error is made. The current text of Article 4 of Legea nr. 554/2004, as amended by Legea nr. 76/2012, is unambiguous in paragraph (4): ‘Administrative acts of a normative nature cannot form the subject matter of a plea of unlawfulness.’
Individual act (a decision, a notice, an approval underlying the tax act): its legality can be examined at any time during the proceedings, by way of a plea, of the court's own motion or at the party's request, Article 4(1). The court seised of the merits, finding that the outcome of the dispute depends on that act, rules on it itself, and, finding it unlawful, decides the case without taking the act into account. A prior administrative appeal is not mandatory: Article 7(5) expressly excludes it in the cases covered by Article 4.
Normative act (an ANAF order, a Government decision, implementing rules): the plea is inadmissible. Two routes remain.
Unlawful normative acts can be challenged at any time (Article 11(4)), and the prior administrative appeal can be lodged at any time. The annulment judgment is generally binding, produces effects only for the future, and is published in the Official Gazette. A real route, but a slow one, and, being prospective only, it often will not save your case. The general regime of the action for annulment of a tax act applies in parallel.
The route that actually works in tax matters: do not ask for annulment, ask for disapplication. The primacy of EU law does not require annulment of the conflicting domestic rule, it directly produces its disapplication in the case before the court. It does not depend on jurisdiction over the normative act, does not require the issuing authority to be joined to the proceedings, and does not run into the ‘future effect only’ limit. When an ANAF order adds a substantive condition for deduction not found in Directive 2006/112, this is the correct request.
Confusing an individual act with a normative one turns a good defence into an inadmissible plea. Check the nature of the act before choosing the legal basis; this is also the starting point of the analysis of the defects of unlawfulness of a tax act.
Who can request it. The reference is made by the court, of its own motion or at the parties' request. A party does not ‘make’ a reference: it submits a request and proposes the questions. A refusal cannot be challenged separately.
When it is mandatory. For a court whose decisions are not subject to any judicial remedy under domestic law, in tax matters typically the court hearing the appeal on points of law, the reference is mandatory. The CILFIT exceptions (the question is irrelevant, acte éclairé, acte clair) have been reaffirmed, but also tightened, by C-561/19, Consorzio Italian Management (6 October 2021): the court of last instance must give reasons for relying on an exception, and the ‘no reasonable doubt’ standard is assessed against all language versions and the specific features of EU terminology.
Where the request goes. Since 1 October 2024, following the reform of the CJEU Statute, preliminary references in six areas, including the common system of VAT, excise duties and the Customs Code, are decided by the General Court, not the Court of Justice. The request is still lodged with the Court, which then allocates it. For a VAT case, this is now the rule.
Effect and duration. A reference stays the proceedings. In 2025, the average duration of preliminary ruling proceedings was 20 months (down from 21.5), with an average across all types of proceedings of 16.7 months (CJEU, press release no. 44/26 of 20 March 2026), on top of which the domestic proceedings must be added. A reference is worthwhile where enforcement has been suspended and the stakes justify the wait; without suspension, two years of late-payment charges can outweigh the benefit.
Citing the case is not enough. The judge reads hundreds of submissions in which ‘pursuant to the CJEU, Mahagében’ appears as an empty formula. What convinces is a demonstration that the situations are identical.
Not ‘EU law’ in the abstract, but the article of Directive 2006/112 and the domestic provision that transposes it or conflicts with it.
This is essential before relying on the Charter, Article 51(1). Without implementation of EU law, the Charter does not apply.
The decisive step. Show what the tax authority alleged, what the CJEU held could not be alleged, and why the two coincide. Cite the paragraph, not just the case, and reproduce it.
Not ‘EU law is being breached’, but ‘the refusal of deduction is unlawful because the tax authority has not proved, with objective evidence, knowledge or the possibility of knowledge of the fraud’.
In your response to the draft inspection report, then in the administrative appeal, within the 45-day time limit. Article 11(11) of the Tax Code turns disregard of CJEU case law into a freestanding ground of inadequate reasoning for the decision on the appeal.
As a ground of unlawfulness and, in the alternative, as a request that the CJEU be seised, with the questions drafted in writing, concisely, in neutral form.
Revision, Article 21 of Legea nr. 554/2004, within one month of communication. Exactly the route the Greentech case in fact followed.
A tax case is not won with EU law because EU law sounds good. It is won when, at the end of the demonstration, the judge can no longer uphold the act without breaching an obligation the Constitution imposes on him personally. And when what is at stake is a disproportionate amount established after an inspection, this difference in approach decides the case.
Directly in the appeal, and it is advisable to do so. Article 11(11) of the Tax Code obliges the tax authorities to take account of CJEU case law on VAT and excise duties. Raising it at the administrative stage fixes the argument in the file with a certain date and turns its disregard into a defect in the reasoning of the decision on the appeal.
The refusal cannot be challenged separately. Coming from a first-instance court, the request is renewed on appeal. Coming from the court of last instance, that court must give reasons for relying on a CILFIT exception; reasoning that is absent or purely formal can support a complaint to the European Commission or an action for state liability. These are long routes, of realistically preventive value.
No. Article 4(4) of Legea nr. 554/2004 expressly excludes normative acts from the scope of the plea of unlawfulness. What remains is the action for annulment, which can be brought at any time, and, far more effective in a VAT case, the request that the court disapply the order for conflicting with the directive.
Yes. The interpretation the Court gives to a provision of EU law is binding on all courts and authorities in the member states, regardless of the member state from which the reference originated, and under ÎCCJ Decision no. 45/2016 it can even support the revision of a final judgment, regardless of when that judgment was given. The condition remains that the situations are identical, not merely that the subject matter is similar.
Informative material, updated on 18 July 2026. It does not constitute legal or tax advice; individual situations must be assessed on their own facts.
If the appeal period is already running, the other analyses on this subject are grouped under tax litigation. For the concrete stages of a dispute, see tax disputes.
Time limits run from the date of communication. A first conversation clarifies what is being alleged, what you need to substantiate and how the defence is built, before an estimate becomes a tax assessment decision.