The civil law firm Costaș, Negru & Asociații notes with satisfaction that, on October 16, 2025, a tax process that lasted almost 10 years between the time the tax inspection was carried out and the time a final decision was issued was successfully completed.
In the case in point, a company operating in the construction sector was the subject of a “classic” tax inspection a decade ago, mainly being accused of the fact that a significant part of its purchases from 2011 to 2014 were fictitious, as the company’s suppliers had not declared their deliveries. As a result, additional tax obligations were established representing corporate income tax and VAT in a total amount of 20,475,566 lei.
Developing the company’s defense, the lawyers Costaș, Negru & Asociații put forward a line of argument over time that included the following:
– In light of the consistent case law of the Court of Justice of the European Union, the company was not liable for the behavior of its own suppliers, as long as the tax authorities did not prove that the company initiated a tax fraud mechanism, voluntarily participated in such a tax fraud mechanism, or knew or should have known that it was participating in a tax fraud mechanism.
– In the criminal proceedings conducted in parallel, the Prosecutor’s Office attached to the Hunedoara Court of Justice ordered the dismissal of the charges of tax evasion and money laundering, the incidence of the judgment of the Court of Justice of the European Union in case C-277/14, PPUH, being retained.
The tax process had a tortuous evolution, which involved the first oral presentation of an appeal under the 2016 Tax Procedure Code, the suspension of the resolution of the tax appeal as a result of the formulation of tax accusations, the judicial obligation of the tax authority to resume this procedure, the resolution of the tax appeal, a first procedural cycle at the end of which the High Court of Cassation and Justice sent the case to the trial court for better motivation, the cancellation of 96.5% of the tax obligations by a sentence of the Timișoara Court of Appeal and, finally, the rejection of the appeals of the tax authorities by a decision of October 16, 2025 of the High Court of Cassation and Justice.
By civil sentence no. 917 of 17 February 2024, the Timișoara Court of Appeal annulled most of the tax obligations. The lower court expressly referred to the judgments of the Court of Justice of the European Union in cases such as Maks Pen EOOD (C-18/13), Mahageben and Peter David (C-80/11 and C-142/11), Axel Kittel and Recolta Recycling (C-439/04 and C-440/04), Optigen (C-354/03) and noted that, following the completion of the criminal procedure, not even the tax authorities were supporting the thesis of the fictitious purchases. Based on the judicial expertise administered in the case, the court analyzed the purchases from each supplier in detail, resized the fiscal situation from the tax inspection report and, with minor exceptions, validated their deductible nature when calculating corporate income tax and recognized the right to deduct VAT.
The lawyers of Costaș, Negru & Asociații note, with the same satisfaction, that the arguments presented for 10 years in a complex tax dispute were not only heard, but also listened to, their appropriate valorization being reflected both by the solid argumentation of the trial court, and the confirmation of the solution by the rejection of the appeals by the High Court of Cassation and Justice. Although the conduct of a tax procedure and the tax trial for 10 years means a considerable consumption of resources, the result achieved is in itself a satisfaction.
The defense of the company was ensured by a team of lawyers coordinated by av. dr. Cosmin Flavius Costaș from the Arad Bar Association.
Costaș, Negru & Asociații is a civil law firm with offices in Cluj-Napoca, Bucharest and Arad, which provides assistance, legal representation and consultancy in several areas of practice through a team of 16 lawyers and consultants. Details regarding legal services and the composition of the team can be found on the website https://www.costas-negru.ro. All rights for materials published on the company’s website and through social networks belong to Costaș, Negru & Asociații, their reproduction being permitted only for information purposes and with correct and complete citation of the source.
