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Zamfirescu Racoti Predoiu requests the Court of Justice of the European Union to deliver a preliminary decision regarding the modality of interpretation and application of Council Directive 2006 / 112 / CE referring to the commune VAT system

Bucharest, December 5, 2012 - The fiscal dispute team of Zamfirescu Racoti Predoiu Attorneys at Law (ZRP) filed a claim with the Court of Justice of the European Union (CJUE) for the delivery of a preliminary decision in relation to the interpretation of the internal legal provisions regarding the payment of the value-added tax (VAT) by the natural persons assimilated to taxable persons. This action was taken for the resolution of a case pending before Alba Iulia Court of Appeal.

The request has in view the clarification of the following aspects:

•    Establishing of the taxable basis in the situation in which the parties establish a final and irrevocable price by the sale-purchase agreement, and afterwards the fiscal authorities consider the sale operation to be taxable due to the reconsidering of the seller’s statute of taxable person (art. 73 and 78 of the Directive);

•    Qualification of the sale of immovable assets from the personal patrimony of a natural person as economic activity of “exploitation” of the tangible assets in order to obtain incomes with continuity character (article 9, paragraph (1), second paragraph of the Directive);

•    Possibility of granting of the right to deduct the VAT and the moment when such a possibility intervenes (article 167 of the Directive).

In the case of the acquisition operations performed previously by a person considered by the fiscal inspection as being taxable person, it must be clarified whether the right to deduct the VAT is granted at the moment of exigibility of the tax or only afterwards, at the moment of its registration for VAT purposes.

The answers that would follow to be offered by CJUE have a decisive influence on the modality in which the appeal court could solve the case, as they regard the modality of interpretation and application of the Directive in relation to the common value-added tax system.

“We found that the Romanian courts of law had a certain fear in interpreting the internal provisions that did not provide expressly the assimilation of the sale of assets from the personal patrimony as being incomes from the economic activity of exploitation with continuity character, although at the moment of performance of the operation there was no unequivocal express legal provision. In what regards the client that our law firm is representing, in order to avoid the abusive interpretation of art. 127 of the Fiscal Code, we requested the suspension of the case until the CJUE’s judgment on the preliminary questions, and the court allowed the suspension claim”, Stan Tîrnoveanu, Managing Partner of ZRP, stated.

The fiscal dispute team coordinated by Stan Tîrnoveanu was formed of Nicoleta Boboc, Senior Associate and Ovidiu Serban – Associate.