Through Decision no. 6/2026 of the High Court of Cassation and Justice, published in Official Gazette no. 443 of May 26, 2026, the Court admitted the appeal in the interest of the law and established that a company’s right to carry forward the negative VAT balance in subsequent fiscal periods is not subject to prescription.
What does it stipulate?
The Decision clarifies an essential fiscal issue that has generated non-uniform practice and uncertainty for the business environment. The High Court established a fundamental distinction between two options available to a company with a negative VAT balance (deductible VAT greater than collected VAT): requesting a refund and carrying forward to the next period. Only the right to request the actual refund of money from the state is a fiscal claim subject to the general 5-year prescription period. In contrast, the right to carry forward the negative balance is not subject to any prescription period.
The Court noted that carrying forward is not an autonomous claim right, but a technical operation, part of the continuous mechanism for calculating and regularizing VAT. When a company carries forward a negative balance, that amount is taken over and integrated into the calculation of the settlement for the next fiscal period, losing its individuality. Practically, the carried forward negative balance is absorbed into current operations, contributing to the determination of the new balance payable or refundable. This mechanism does not represent passivity on the part of the taxpayer, but an active exercise of a legal option.
The central argument of the decision is the protection of the principle of VAT neutrality. If the right to carry forward were time-limited, a company could permanently lose the right to recover its deductible VAT, thus unfairly bearing a fiscal burden. Such a situation would violate a fundamental principle of the common VAT system. The only limitation to the right to carry forward occurs when the company ceases its economic activity and loses its status as a taxable person, at which point there is no longer a “subsequent period” in which the carry forward can be made.
Who does it apply to?
The Decision applies to all taxable persons registered for VAT purposes in Romania. The impact is direct for companies that currently or occasionally generate negative VAT balances, such as:
- Exporters, who invoice without VAT (exemption with right of deduction), but acquire goods and services from Romania with VAT.
- Companies in the major investment phase, which acquire assets (equipment, real estate) with significant deductible VAT, before generating corresponding taxable revenues.
- Start-ups and expanding companies, which have high operational expenses in the initial periods, with lower revenues.
- Any company that, in a certain fiscal period, records acquisitions with VAT greater than taxable supplies.
Source: Official Gazette, Part I, no. 443 of May 26, 2026.
Note: This material is strictly for informational purposes and does not constitute legal, fiscal, or business advice. As the interpretation and application of legal provisions may vary significantly depending on the specific circumstances of each entity, we recommend seeking specialized legal assistance before adopting any operational decisions based on these changes.