CJEU - Recent Developments in Direct Taxation 2024

1. What to (not) expect from the five cases on the Romanian windfall tax that are pending before CJEU

1.1. Introduction

Before discussing the five Romanian windfall tax cases (C-391/23, C251/24, C-261/24, C-392/24 and C462/24) currently pending before the Court of Justice of the European Union (the Court), some background context is necessary. A ‘windfall tax’ is supposed to be a one-time surtax levied on a company or industry when unusual economic conditions result in large and unexpected profits. If it is imposed in Europe on electricity providers, this measure is also supposed to be technologically neutral, not retroactive and designed in a way that does not affect wholesale electricity prices and long-term price trends. The Romanian windfall tax has none of these characteristics.It was introduced in November 2021, was not a one-off occurrence and is still in force three years later. It is not levied on excessive profits, as the tax base is not designed to reflect the windfall profits generated by the spikes in energy or oil prices. Instead, it is levied on the value of electricity sold over an arbitrarily determined price of EUR 90 per MWh, so it resembles a turnover tax. Lastly,...