When ANAF opens a tax audit or issues a tax assessment against your business in Romania, the procedural clock starts immediately and missteps in the early stages can significantly narrow your options at court. Ferraz & Whitmore advises international companies and funds on the full dispute path – from audit defence through administrative appeal (contestatie) to litigation before the Romanian courts and cross-border treaty dispute resolution. This page sets out the key mechanisms, typical risk points and how our team supports clients at each stage.
When You Are Likely to Need Specialist Support
Tax disputes in Romania arise in a range of circumstances: an ANAF field inspection that escalates into a formal tax assessment, a transfer pricing adjustment affecting intercompany transactions, a withholding tax challenge on cross-border payments, or a refusal of a VAT refund claim. International groups face an additional layer of complexity because the same transaction may be scrutinised by tax authorities in more than one jurisdiction simultaneously.
Engaging legal counsel early – ideally before the audit concludes – preserves the widest range of procedural options. Waiting until a tax assessment notice has been issued and the administrative appeal period has begun to run leaves less time to gather documentation and frame the arguments that will matter most if the dispute proceeds to court.
The Romanian Tax Dispute Path
Romania follows a mandatory two-stage dispute process before a taxpayer can bring a claim before the courts.
- Stage 1 – Administrative appeal (contestatie) to ANAF. Once a tax assessment is issued, the taxpayer must file a contestatie with ANAF before approaching the courts. This internal review is a formal precondition, not an optional step. The quality of the written submissions at this stage matters: arguments not raised here may be harder to introduce later.
- Stage 2 – Administrative-fiscal litigation. If ANAF's decision on the contestatie is unfavourable, or if ANAF does not resolve the appeal within the statutory period, the taxpayer may bring proceedings before the competent administrative-fiscal court. Depending on the amount and nature of the assessment, the case may progress through successive levels of the Romanian court system.
- Final appeal – High Court of Cassation and Justice. Complex or high-value disputes, or those raising points of principle, may ultimately reach the High Court of Cassation and Justice, Romania's supreme court for matters of law. Decisions at this level can set precedents that affect the treatment of similar issues across the country.
At any stage, the taxpayer may also seek an individual advance tax ruling from ANAF on uncertain future transactions, which can help manage prospective risk even if it does not resolve an existing assessment.
If your business is currently facing an ANAF inspection or has received a tax assessment, our team is available to review your position. Write to us at info@ferrazwhitmore.com or visit our contacts page to arrange an initial discussion.
Cross-Border and Treaty Dimension
For international businesses, a Romanian tax dispute rarely exists in isolation. Transfer pricing adjustments, permanent establishment challenges and withholding tax disputes all have the potential to create double taxation involving two or more jurisdictions. Several mechanisms exist to address this.
- Mutual Agreement Procedure (MAP). Most of Romania's tax treaties include a MAP provision allowing the competent authorities of the two states to negotiate a resolution that eliminates double taxation. MAP runs in parallel with, not instead of, domestic proceedings, and treaty provisions govern the precise scope and timelines in each case.
- EU Arbitration Convention (90/436/EEC). For transfer pricing disputes between EU Member States, the EU Arbitration Convention provides a structured path that can lead to binding arbitration if the competent authorities do not reach agreement within a set period.
- Tax Dispute Resolution Mechanisms Directive (EU) 2017/1852. This EU Directive expanded and modernised the dispute resolution framework for double-taxation disputes within the EU, introducing clearer timelines and an enforceable arbitration option where competent authority negotiations fail. Its interaction with MAP under bilateral treaties requires careful analysis in each case.
Our litigation and arbitration practice in Romania works alongside the tax team to coordinate domestic court proceedings with any concurrent international dispute resolution process, ensuring that positions taken in one forum are consistent with those advanced in another.
Typical Pitfalls in Romanian Tax Disputes
Across the disputes we have handled, certain recurring issues tend to determine whether a challenge succeeds or fails.
- Documentation gaps. ANAF inspectors will scrutinise the substance behind intercompany arrangements, the basis for transfer prices and the contractual and operational evidence supporting claimed deductions. Assembling a complete, consistent documentary record early is essential.
- Missing procedural deadlines. The appeal path in Romania is time-sensitive. A failure to file the contestatie within the required period, or to bring court proceedings promptly after an adverse ANAF decision, can extinguish rights that cannot be recovered. For a comparative overview of appeal deadlines across jurisdictions, see our guide to tax appeal deadlines compared.
- Inconsistent characterisation across jurisdictions. In cross-border disputes, characterising a payment or structure differently in Romania than in the other state involved creates exposure in both. Early alignment of positions across all affected jurisdictions is a priority.
- Underestimating the administrative appeal stage. Some clients treat the contestatie as a formality before going to court. In practice, ANAF does uphold some appeals, and a well-argued submission at this stage can resolve a dispute faster and at lower cost than litigation.
- Regime-specific complexities. Features of Romanian tax law such as the micro-enterprise regime and the participation exemption interact with international structures in ways that are not always obvious. Assessments often arise at precisely these intersection points.
How Ferraz & Whitmore Approaches Tax Audit Defence
Our team works with clients across the full lifecycle of a Romanian tax dispute. During an active ANAF audit, we assist with document production, communication with inspectors and the preparation of responses to information requests – aiming to address issues before they crystallise into an assessment. Where an assessment has already been issued, we analyse the legal and factual basis, develop the written arguments for the contestatie and, if necessary, prepare and conduct court proceedings through to the High Court of Cassation and Justice.
For groups with cross-border exposure, we coordinate with the firm's advisers in other jurisdictions and, where relevant, manage or support MAP and EU arbitration processes running alongside domestic proceedings. Our tax structuring practice in Romania works closely with the disputes team so that any restructuring decisions taken during or after a dispute are informed by the litigation risk and vice versa.
We do not take a one-size-fits-all approach. The strategy for a transfer pricing dispute involving a multinational group differs materially from an approach suited to a domestic VAT reassessment, and we calibrate our involvement accordingly.
Self-Assessment: Key Questions to Ask Before a Dispute Escalates
If your business is under ANAF scrutiny or anticipates a challenge, the following questions are worth working through with your legal and tax advisers.
- Is the documentation supporting your transfer pricing policy complete, current and accessible?
- Do your intercompany agreements accurately reflect actual conduct and economic substance?
- Have you identified whether the same transactions are under scrutiny in any other jurisdiction?
- If a tax assessment is issued, have you noted the deadlines for administrative appeal and preserved your rights?
- Are you aware of any applicable MAP or EU Directive mechanism that could be activated in parallel?
- Has your Romanian entity sought an individual advance tax ruling on any significant uncertain position?
If you would like to discuss a current audit, a received assessment or a potential dispute, our team is ready to help. Please contact us at info@ferrazwhitmore.com or through our contacts page.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.