The Bucharest Court of Appeal sent a request to the Court of Justice of the European Union to obtain clarifications regarding the interpretation of some provisions of the EU’s operating treaty. This request comes in the context in which a Romanian court has to settle a dispute between the local subsidiary of the Swiss company Axpo and the Government of Romania regarding the overtaxation of electricity trading.
The request made by the Romanian court was recently published in the official journal of the European Union. The main problem is the additional tax imposed in 2022, by Emergency Ordinance no. 27, electricity traders, which practically resulted in the taxation of 98% of the gains obtained from electricity trading. Professional associations criticized this measure, stating that it led to the disappearance of energy trading, negatively affecting market liquidity. Subsequently, a 100% tax was applied to the profit obtained from energy export transactions.
Traders contested these provisions, considering them discriminatory, as the remaining 2% does not even cover operating costs. EFET (European Federation of Energy Traders) has warned that these measures will lead to the insolvency of local market participants and the withdrawal of foreign companies from the market, with negative consequences for European energy markets.
Axpo Energy Romania, which also carries out trading activities, sued the Government in relation to overcharging, and now the Bucharest Court of Appeal requests clarifications from the CJEU regarding the application of the European treaty in this case.
Thus, the Bucharest Court of Appeal asks whether a state can impose an additional and differentiated tax on a category of market participants, whether this measure affects competition as defined in the treaty, whether the tax represents state aid for those who are not taxed and if it was previously notified to the European Commission, if the surcharge imposed in Romania respects the principle of proportionality, ignoring the operating expenses of trading, if it is discriminatory and if it is in accordance with the Treaty on the Functioning of the European Union.
Depending on the answer given by the CJEU, the Bucharest Court of Appeal will decide in this case. If the CJEU considers that the special surcharge on energy trading does not fully comply with EU law, the Romanian Government will find itself in a delicate situation, because these taxes also finance the mechanism for capping electricity and gas prices, a mechanism that will be in valid until March 31, 2025.
Source: www.cotidianul.ro
