Income from the Sale of Waste. The High Court of Cassation and Justice confirms the lack of legal criteria for taxation

During the last week, the Costaș, Negru & Asociații team managed to obtain, at the High Court of Cassation and Justice, the confirmation of an argument elaborated for 3 years: the income from the sale of ferrous and non-ferrous waste cannot be taxed as “income from other sources” in the absence of legal criteria for taxation.

In fact, this decision of the High Court of Cassation and Justice represents the first validation, at the supreme court level, of an already clear jurisprudence from the Cluj Court of Appeal or the Târgu Mureș Court of Appeal.

The legal issue is limited to the interpretation of art. 62 lit. f) Fiscal Code, which considers non-taxable income “income of any kind, in money or in kind, received when handing over waste from personal property”. Thus, on a first reading and in the absence of any other clarification, as long as a natural person does not carry out an economic activity in one of the forms provided by the law (e.g. authorized natural person, sole proprietorship), all the income he obtains from the sale of ferrous and non-ferrous scrap is non-taxable income.

In the framework of fiscal inspections carried out in the last three years, especially by the anti-fraud bodies, the following solutions were adopted:

– Tax inspectors have built various criteria to distinguish between taxable income and non-taxable income. Thus, the following were considered taxable: the sale of more than 5,000 kg of waste, the sale of waste for a price greater than 4,000 lei or 5,000 lei, making more than 5 transactions during a year.

– The income was qualified as “income from other sources” according to art. 114 Fiscal Code.

– The income tax was established for waste collection companies, which were accused of not withholding 10% of the amounts paid to individuals.

The lawyers Costaș, Negru & Asociații argued, in the administrative and judicial phases, that such an interpretation is not possible, given that the Fiscal Code did not provide any criteria for distinguishing between income from personal patrimony and those from the patrimony of a business. Therefore, in accordance with the provisions of art. 13 Fiscal Procedure Code, the doubt had to be interpreted in favor of the taxpayer.

It was also explained that complaints against individuals should not affect collecting societies. Thus, if it were to be assessed correctly, the income obtained is not income from other sources, but income from independent activities.

In the tax litigation settled on the merits at the Oradea Court of Appeal, the court valued these arguments and admitted the tax litigation action, canceling additional tax obligations of over 7 million lei. The court held that tax inspectors cannot use taxation criteria based on their own interpretations, given that the legislator chose not to regulate such criteria. The conduct of the tax was considered incompatible with the principles of tax law such as the principle of legal certainty and the principle of legitimate trust.

By civil decision no. 2826 of May 23, 2024, the High Court of Cassation and Justice – Administrative and Fiscal Litigation Section rejected the appeals of the fiscal bodies and completely preserved the Oradea Court of Appeal decision.

The definitive solution is a confirmation of the existing jurisprudence at the level of the Courts of Appeal, to which the lawyers Costaș, Negru & Asociații contributed. Equally, the validation of the High Court also represents a special professional satisfaction for us, given that the company and the represented companies risked bankruptcy in case of a contrary solution.

The Costaș, Negru & Asociații team was coordinated by av. Dr. Cosmin Flavius ​​Costaș.

Costaș, Negru & Asociații is a lawyers’ civil partnership with offices in Cluj-Napoca, Bucharest and Arad, providing legal assistance, representation and consultancy in a number of practice areas with a team composed of 16 lawyers and consultants. Details regarding legal services and the members of the team can be found on the website All rights for the materials published on the company’s website and on social media belong to Costaș, Negru & Asociații, their reproduction being allowed only for information purposes and with the correct and complete disclosure of the source.

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