ECJ-Recent Developments in Direct Taxation 2013

S. 202I. Introductory remarks

It is not unusual for the governments that have been reprimanded by the Court of Justice of the European Union (“ECJ”) for levying taxes contrary to EU Law, which discriminate against cross-border transactions, to change the law in question such that the scope of that tax is widened and it becomes applicable to domestic transactions as well. We find that it is rarely the case that national authorities repeal the tax when the option is available of setting it right simply by levying the tax on additional categories of transactions and bringing more taxpayers into the net. The Romanian government is no exception to this quite standard policy decision, but it has displayed particular creativity in that it has managed to introduce provisions which produce the initially intended effect in respect of those taxpayers who carried out taxable transactions in the past, when the tax they paid was found to have run counter to EU Law.

Case C-331/2013 Nicula, pending before ECJ, which is discussed in this paper, should be a test of the strategy the Romanian government has adopted and should reveal to us whether it will succeed or, on the contrary, if the taxpayers who are f...