Costaș, Negru & Asociații presents today a successfully concluded tax case regarding the compensation owed to economic operators under Emergency Ordinance (O.U.G.) no. 106/2022. Following the final ruling to annul the tax assessment decision, the represented company was able to recover the amount unlawfully collected from it—exceeding 2 million lei—along with the associated tax interest.
The case presented is emblematic of the abuses perpetrated by Romanian tax anti-fraud authorities, based on fanciful interpretations or the invention of conditions not found in the text of the tax law.
Specifically, against the backdrop of the war in Ukraine—and considering the skyrocketing fuel prices and their impact on various types of end-users (individuals and, notably, industrial consumers)—Emergency Ordinance no. 106/2022 was adopted to support price reductions for gasoline and diesel. This measure allowed fuel retailers to reduce the price of supplied fuel by 0.50 lei per liter (VAT included). This mechanism was applicable during the reference period of July 1 to September 30, 2022. Subsequently, the legislator extended the mechanism’s applicability to the period from October 1 to December 31, 2022, via Emergency Ordinance no. 131/2022.
Pursuant to Art. 1 para. (1) of Emergency Ordinance (O.U.G.) no. 106/2022, the economic operator offering this discount was entitled to receive compensation from the state budget—amounting to 25 bani per liter of fuel supplied—corresponding to the discount granted. In the Ordinance’s original form, the condition for granting this compensation was that the supply of gasoline or diesel be made to end customers—natural and legal persons purchasing fuel from depots and/or distribution stations for their own consumption. The compensation was to be granted based on a compensation request submitted to the tax authority using Form D 179.
Through O.U.G. no. 131/2022, this facility was extended to include sales to authorized economic operators purchasing fuel from distribution stations or depots for their own consumption or for resale. According to the preamble of O.U.G. no. 131/2022, the rationale behind the amendment was to avoid potential discrimination arising from granting compensation to only a specific category of legal-entity end customers, while excluding those who do not purchase directly from depots or distribution stations.
It should also be noted that neither ordinance stipulated a requirement for the economic operator applying the discount to own its own depots. The only article regulating the economic operator’s situation was Art. 1 para. (4) of O.U.G. no. 106/2022, which stipulated that the compensation measure applied to the marketing of gasoline and diesel—covering both retail sales and wholesale sales via supplier/distributor depots.
The economic operator that granted the price reduction to its customers—provided those customers had not previously received the same reduction elsewhere in the distribution chain—was subjected to an inspection by D.R.A.F. 6 Oradea. During the inspection, anti-fraud inspectors determined—without being able to cite any specific legal basis—that the compensation mechanism could only be utilized by economic operators possessing their own depots for distribution purposes. Consequently, they issued a tax assessment notice and required the company to repay the amounts received as compensation.
The Bihor Tribunal granted the claim and annulled the tax assessment decision in its entirety, ruling that the interpretation adopted by D.R.A.F. 6 Oradea was abusive.
On appeal, the Oradea Court of Appeal addressed the disputed issue by referring, first, to Ministry of Energy Letter no. 13140/VDP/8.05.2023—issued at the request of the claimant company—which certified that the applicable legal provision nowhere mentioned the phrase “own storage facilities” belonging to the economic operator, and that the purpose of the legal provisions was to grant compensation only once for the same quantity of fuel traded along the distribution chain.
Furthermore, the appellate court analyzed the chronological sequence of the legal provisions, noting that the legislative amendments made to Emergency Ordinance (O.U.G.) no. 106/2022 merely validated the interpretation of the original legal provisions and explicitly clarified that compensation is granted only once for the same quantity of fuel traded along the distribution chain.
In the spirit of Art. 13 of the Fiscal Procedure Code, the Court of Appeal applied a teleological interpretation of the legal provisions, identifying the purpose pursued by the legislator, examining the regulation’s original form and the rationale and objective behind the rule’s adoption, as well as the legislative amendments concerning the same legal situation. It was thus concluded that the teleological interpretation of the provisions of Art. I para. (11) of O.U.G. no. 106/2022—the regulation at issue—protects the final beneficiary and, equally, grants the economic operator that applied the discount along the distribution chain the right to obtain compensation from the state budget, regardless of whether the sale takes place from depots or fuel stations.
The Costaș, Negru & Asociații team notes with satisfaction that our arguments were fully upheld in the case. Specifically, the interpretation adopted by D.R.A.F. 6 Oradea clearly violated the principle of legality by imposing a condition on the claimant company that did not exist in the law: namely, the requirement to own its own depots. The arguments presented to both the trial court and the appellate court included a rigorous analysis of the legal framework across all stages of the legislative process, leading to the same conclusion: this condition never existed in the law.
Throughout the administrative appeal and judicial proceedings, the plaintiff company was represented by Dr. Cosmin Flavius Costaș (Arad Bar), a professor of Tax Law at the Faculty of Law of Babeș-Bolyai University in Cluj-Napoca and head of the tax law practice at the law firm Costaș, Negru & Asociații.
Costaș, Negru & Asociații is a law firm with offices in Cluj-Napoca, Bucharest, and Arad, providing legal assistance, representation, and consultancy across various practice areas through a team of 16 lawyers and consultants. Details regarding legal services and the team composition can be found at https://www.costas-negru.ro. All rights to materials published on the firm’s website and social media channels belong to Costaș, Negru & Asociații; reproduction is permitted solely for informational purposes and subject to correct and complete citation of the source.
