In November 2024, through an amendment to the Methodological Norms of the Fiscal Code, the Government radically intervened in the way of calculating the minimum turnover tax introduced in the content of art. 181 Fiscal Code, starting from January 1, 2024.
Costaș, Negru & Asociații welcomes the partial suspension of the provisions of art. I (A) (1) of H.G. no. 1393/2024, ordered by civil sentence no. 46 of January 29, 2025 of the Cluj Court of Appeal – Section III Administrative and Fiscal Litigation.
In fact, as we have previously shown, for certain categories of taxpayers, the so-called minimum turnover tax provided by art. 181 Fiscal Code. In fact, we are talking about an additional tax, which is paid in addition to the corporate income tax.
The regulation of the Fiscal Code provided, starting from January 1, 2024, a way of calculating the tax base, a base from which the excise duties paid by intermediaries in the trade of certain products were excluded. More precisely, according to the Fiscal Code, if an intermediary has paid upstream excise duties for the purchased products, and the excise duties are subsequently included in the price charged downstream, the significant excise duty counter value is not included in the tax base.
Through an extremely critical legislative intervention, the Government introduced, through H.G. no. 1393/2024, an article 41 point (1) (d) in the methodological norms related to art. 181 Fiscal Code. According to the interpretation that impermissibly deviates from the provisions of the Fiscal Code, the scope of taxpayers who can exclude excises paid upstream from the tax base has been drastically limited. Practically, any intermediary in the trade of certain products could no longer deduct the excise duties paid upstream (expenses), reflected on sales invoices (revenues), with the consequence of a significant increase in the tax base and, thus, the minimum turnover tax. Some preliminary calculations show that the minimum turnover tax may reach the threshold of 65% of the intermediary’s profit.
The request of several taxpayers for the partial revocation of H.G. no. 1393/2024, regarding the prejudicial regulation, remained without a response from the Government.
Therefore, the taxpayer represented by the civil society of lawyers Costaș, Negru & Asociații notified the Cluj Court of Appeal with a request for partial suspension of H.G. no. 1393/2024.
During the debates, the key elements of the debate were scored:
– Excise duties are an indirect tax, and the burden of paying excise duties falls on the final consumer, not on intermediaries. From this perspective, keeping excise duty neutral only for some taxpayers is contrary to European law.
– The Fiscal Code cannot be changed in any way by methodological rules, even if in Romania there is a “culture” of changes of this type. The principles of legality, legal security and legitimate trust require a strict interpretation of the tax rules, with the practical consequence that the texts of the Tax Code will always prevail, and not the methodological rules.
– In this case, no fiscal advertising requirement was respected. The tax base for the minimum turnover tax was presented in the Code as an attractive one, which did not double the profit tax. The proposed change at the level of methodological norms is radical, unknown to taxpayers and harmful to them. In addition, the amendment took effect retroactively, in November 2024, with practical application from January 1, 2024.
As we mentioned previously, by civil sentence no. 46 of January 29, 2025 of the Cluj Court of Appeal, the suspension request was admitted until the merits of the action in the partial annulment of H.G. no. 1393/2024. The extended reasoning of this sentence is to be provided later, within the legal term.
Currently, other tax litigation courts in the country are pending applications with the same purpose and, essentially, with the same argumentation.
The client’s defense was provided in the case by a team composed of av. dr. Cosmin Flavius Costaș, the coordinator of the tax law practice of the civil society of lawyers Costaș, Negru & Asociații and av. Sabina Maerean, both from the Arad Bar Association.
Costaș, Negru & Asociații is a civil society of lawyers with offices in Cluj-Napoca, Bucharest and Arad, which offers assistance, legal representation and consultancy in several practice areas through a team composed of 18 lawyers and consultants. Details regarding legal services and team composition can be found on the website https://www.costas-negru.ro. All rights for the materials published on the company’s website and through social networks belong to Costaș, Negru & Asociații, their reproduction being permitted only for informational purposes and with correct and complete citation of the source.
