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News from Members Filip & Company obtains double confirmation of the legality of voluntary transfer pricing adjustments at the HCCJ

Filip & Company obtains double confirmation of the legality of voluntary transfer pricing adjustments at the HCCJ

by Alcatel-Lucent Romania (NOKIA Affiliate) May 26, 2023

The High Court of Cassation and Justice has confirmed the deductibility of expenses and VAT generated by transfer pricing adjustments made by affiliated companies under contracts signed at group level.

In two cases involving corporate income tax and VAT, the dispute resolution team consisting of George Trantea (partner), Adrian Cristea (senior associate) and Adrian Zamfir (associate) demonstrated that the obligation to adjust the prices charged by affiliated companies to market value is both a right and a duty. This right cannot be ignored by ANAF inspectors for the simple reason that checking compliance with market value would be the exclusive prerogative of the tax authority.

The tax authorities examined the contractual mechanisms for adjusting the price owed by a Romanian company, part of a multinational group, for goods obtained from its affiliated supplier and how the price it paid to affiliated distributors was determined.

“This double victory is the result of more than 5 years of effort by the Filip & Company team, which has enjoyed the trust of the client and, in the end, the correct understanding of the magistrates of the litigation section of the High Court of Cassation and Justice. The decisions obtained are a benchmark and we are convinced that they will help to support the positions of companies in other disputes before ANAF or the courts”, said George Trantea, partner, and one of the coordinators of the Dispute Resolution practice at Filip & Company.

In its decision on corporate income tax, the Administrative and Fiscal Litigation Division of the High Court of Cassation and Justice upheld the lower court’s interpretation and confirmed that affiliated companies have the right to adjust prices charged between affiliated companies through contractual mechanisms and with a view to aligning profits with market value. This right may be reflected in the contracts signed by the affiliated parties involved and need not be linked to a specific transaction.

The reasoning in relation to corporate income tax led the same Administrative and Fiscal Litigation Division of the High Court of Cassation and Justice to overturn the tax decision in the second VAT case as well. In this case, the judges of the High Court of Cassation and Justice, after overturning the decision of the Court of Appeal, confirmed the company’s right to deduct VAT on the annual transfer pricing adjustments, even if they are reflected in invoices separate from the actual transactions.

The decisions obtained before the Supreme Court by Filip & Company are extremely useful as some tax authorities continue to ignore the global adjustments clauses in contracts concluded by affiliated companies. Although there were also correct decisions at ANAF level, many companies were forced to pay additional taxes and/or VAT because some inspectors considered that only the authority could decide whether a certain profit was at market level or not.

The decisions reflect a very good understanding of the operation mechanisms of multinational groups by the judges of the HCCJ, who also recognized the company’s right to recover interest on the overpayments.



Filip & Company

Filip & Company is one of the leading law firms in Romania providing top quality assistance in all relevant areas of law for businesses operating in Romania or considering Romania. Specialized in complex projects that require an innovative approach, Filip & Company lawyers have significant experience in various areas, such as infrastructure and concession, mergers and acquisitions, energy, corporate, real estate, competition law, finance, and capital markets but also labour law, data protection, consumer or environment protection. The law firm also provides legal assistance and representation in disputes and arbitrations with significant implications for the clients’ businesses. Please visit to find out more about Filip & Company’s expertise areas and team.


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