The concept of tax disputes refers to disputes in which one of the involved parties is a public authority and the purpose of the litigation is either the total or partial annulment of an administrative act, or compelling the public authority to issue an administrative act or perform a specific administrative operation. This obligation arises when the public authority in Romania fails to respond within the legal deadline or unjustifiably refuses to issue the requested administrative act. In this context, the VAT refund claims process can generate tax disputes and companies potentially conflicting with the Romanian tax authorities when they fail to respond within the legal timeframe or unjustifiably refuse to approve VAT refund claims related to commercial activities. For these reasons, a tax lawyer and a litigation lawyer from Romanian Law Firm Pavel Mărgărit and Associates can provide legal assistance and representation before administrative courts to ensure compliance with legal procedures in VAT refund operations and to protect the right to obtain interest in case of delays.
What VAT refund entails
In Romania, VAT refund is regulated by the Fiscal Code and represents the process through which companies can request the reimbursement of VAT from the Romanian tax authorities. This becomes possible when the amounts obtained from business activities are lower than the expenses incurred. Companies have the right to request VAT reimbursement when the deductible VAT value exceeds the total collected VAT. Thus, according to the Fiscal Code, any taxable person registered for VAT purposes can request VAT reimbursement quarterly or monthly if there are negative amounts to be settled.
Deadline for VAT reimbursement
Usually, VAT reimbursement takes place within a 45-day period, extending to 90 days in situations where the VAT return settlement process involves an anticipated audit. However, the initial deadline may be extended if the resolution of the request requires the administration of additional evidence for a decision. Nevertheless, in practice, significant delays occur, and situations arise where tax authorities do not adhere to these legal deadlines, and taxpayers have the right to request interest for the delayed VAT reimbursement, according to the provisions of the Fiscal Procedure Code.
In cases of delays or issues in the VAT reimbursement process, legal assistance from a specialized tax lawyer in Romania is essential. A lawyer with expertise in administrative and tax litigation can offer support by effectively communicating with the Romanian tax authorities and providing legal assistance during tax audits. In situations where it is necessary, legal representation before administrative courts is also offered.
Right to interest
According to the provisions of the Fiscal Procedure Code, taxpayers have the right to interest for amounts to be refunded from the budget, starting from the day following the expiration of the legal deadline. In accordance with these provisions and the practice of the Court of Justice of the European Union (CJEU) in this field, the taxpayer’s right to interest is automatically triggered when the tax authority exceeds the VAT refund deadline. Thus, the reason for the delay in granting the refund of excess VAT becomes insignificant because there is no distinction between a late refund caused by administrative resolution outside the legal deadlines and one generated by administrative acts that illegally excluded the refund and were subsequently annulled by a court decision.
It is important for companies to timely assert their right to interest for the delayed VAT reimbursement before the administrative courts in Romania. This is why The Romanian Law Firm Pavel Mărgărit and Associates offers specialized legal assistance and representation in fiscal disputes, covering a wide range of services, including consultancy in drafting and reviewing relevant legal documents, representation before administrative courts in tax disputes, and effective strategies for obtaining interest in cases of delayed VAT reimbursements.