Final Decision on the Taxation of Photovoltaic parks
The Timişoara Court of Appeal has given final judgment in the Haţegan Attorney's case against ANAF, DGFP Timiş, on behalf of one of the largest developers of renewable energy projects. Thus, the Court has upheld the Timis Tribunal's ruling and has ruled that several components of the photovoltaic park (including those with the highest value, i.e. photovoltaic panels, inverters and command unit) cannot be considered as constructions, thus avoiding the huge increase in building tax due.
This court decision comes amid a period of significant development of the renewable energy sector through solar panels in Romania, which saw photovoltaic capacity reaching 98 GW in 2017, up 29% from the previous year.
Haţegan Attorneys, through the Tax Department, obtained a final decision in court, representing one of the largest developers of renewable energy projects in the western part of Romania.
Considering the special regulations on building tax, developers of photovoltaic parks place some components (including photovoltaic panels) in the equipment group, and others in the construction group.
In 2016, the tax authority conducted an audit of Hategan Attoneys’ client. As a result, the company was obliged to reclassify several assets belonging to the Technological Equipment category in the Construction group, subgroup 1.7.3. This approach would automatically generate the obligation to increase the tax base taken into account when determining the tax on construction applicable between 2014 and 2015. Thus, the company had to pay differences of approximately RON 1 million plus interest, increases and penalties.
‘A final court ruling can have a major positive impact on the renewable energy industry, encouraging further development of this sector. Moreover, along with this decision, we have taken important steps towards aligning the photovoltaic tax regime in Romania with the European standards and practices’, said Alexandra Jivan, Partner at Haţegan Attorneys and Tax Department Coordinator.
With this new success, the Haţegan Attorneys Tax Department maintains a particularly good rating of litigation in the area of tax law, demonstrating that proper enforcement of the law by the authorities is necessary and must be consistently applied to all companies operating in Romania.
Haţegan Attorneys is an independent law firm established in 2004 which offers an integrated range of legal advisory services to meet the needs of companies and organisations both in Romania and internationally. Located in Timisoara, Haţegan Attorneys specialises in investments from German countries and includes numerous important companies operating in the country.
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