High Court Decision no. 6/2026: an important clarification for foreign investors operating in Romania
Romania’s High Court confirmed that the right to carry forward a negative VAT balance to subsequent VAT periods is not time-barred, strengthening fiscal predictability for businesses and investors.
Decision no. 6/2026 of the High Court of Cassation and Justice provides an important clarification for the Romanian VAT system by drawing a clear distinction between the carry-forward of a negative VAT balance and a VAT refund claim. While a refund claim gives rise to a receivable against the state and remains subject to limitation rules, the carry-forward mechanism is part of the technical settlement of VAT and is not extinguished merely by the passage of time.
For foreign investors, this is particularly relevant in projects involving substantial upfront investment, a mismatch between input costs and taxable revenues, or longer development phases before steady taxable operations are reached. In such cases, preserving negative VAT balances over time helps protect working capital, reduces the risk of deductible VAT becoming a final cost, and supports a more reliable view of Romania’s tax environment.
At the same time, the ruling should be read within its proper limits. The Court did not state that all VAT-related rights are imprescriptible; it only confirmed that the right to carry forward the negative VAT balance is not subject to prescription, whereas refund claims remain time-limited and deduction rights must still be assessed separately under the applicable legal conditions.
