Judgment summary
This document is a request for a preliminary ruling from the Curtea de Apel Oradea (Court of Appeal, Oradea, Romania) to the Court of Justice of the European Union, lodged on 2 July 2026 (decision to refer of 22 May 2026).
The referring court asks the Court of Justice to interpret Article 26(2) and Article 63 TFEU in the context of national legislation requiring tax authorities to adjust transfer prices between related parties to the median value of the arm's length range of financial indicators or comparable transactions [see question, unnumbered].
The underlying dispute concerns Romagnetics Srl, a Romanian company, and a transfer pricing adjustment made by the Romanian tax authorities in respect of intra-group transactions with its Belgian partner, AM Belgium, for the period 2017-2021 [2].
Background
The appellant, Romagnetics Srl, is a Romanian company registered with the National Trade Register Office [1]. During 2017-2021 it earned revenue from selling assets to its related party, AM Belgium [2].
A tax audit took place between 7 September 2022 and 16 January 2023, focusing on transfer prices charged on intra-group transactions with AM Belgium, in respect of which the appellant's financial statements and D101 declarations for 2019, 2020 and 2021 reportedly showed a loss [3]. The tax authorities requested a transfer pricing file from the appellant [3].
On the basis of the audit and the transfer pricing file submitted, the tax authorities concluded that the appellant had not shown the related party transactions were consistent with market prices for 2018, 2019, 2020 and 2021, as the profit margin indicator (Rata Rentabilității Veniturilor, 'RRV') fell outside the interquartile range [4]. The auditors adjusted the appellant's revenue to the median RRV value of the 14 comparable companies identified in the appellant's own transfer pricing file [4].
The appellant objected, invoking the OECD Transfer Pricing Guidelines and Article 11(4) of the Tax Code, and the principle of non-retroactivity regarding databases used in preparing the file [6]. The objections were dismissed, and the tax assessment notice and tax audit report were issued and sent to the appellant on 8 February 2023 [7]. The appellant's administrative complaint was also dismissed as unfounded [7].
The tax authorities relied on Article 11(4) of the Tax Code and Article 9(1) and (2) of ANAF Decree No 442/2016 in adopting the median value [8]. The appellant then brought proceedings under Article 281 et seq. of Law No 207/2015 on the Code of Tax Procedure [9].
By judgment No 576/CA of 25 July 2025, the Tribunalul Bihor dismissed the appellant's action, holding that the tax authorities had lawfully adjusted the transfer prices to the central market trend value, and had not adjusted to the lower quartile as the appellant had requested [10, 11]. The appellant appealed, seeking to set aside that judgment and have the action upheld in its entirety, including annulment of the administrative acts [12].
Core dispute
In its appeal, Romagnetics Srl requested that the Curtea de Apel Oradea refer a question to the Court of Justice under Article 267 TFEU on the interpretation of Article 26(2) TFEU (free movement of goods and capital) [13].
Specifically, the appellant questioned whether those provisions preclude national rules under which a Romanian company held by a Belgian entity and supplying products to other EU Member States must have its tax base calculated at the median level of the arm's length range determined by the national tax authorities, in circumstances where paragraph 3.62 of the OECD Guidelines states that the range is free of error and that any point within it is correct [13].
The respondents did not express a position on the appellant's request for a preliminary reference [15].
The question referred to the Court of Justice is whether Article 26(2) and Article 63 TFEU must be interpreted as precluding national legislation that, for transactions between related parties, requires tax authorities to adjust transfer prices to the median value of the arm's length range of companies' financial indicators or of comparable transactions identified.
Court findings
The referring court set out the relevant national provisions, namely Article 11(4) of Law No 227/2015 on the Tax Code, which requires transactions between related parties to comply with the arm's length principle and allows tax authorities to adjust income or expenditure on the basis of the central trend in the market [17], and Article 9(1) to (3) of ANAF Decree No 442/2016, which defines the central market trend as the median value of the arm's length range or, where fewer than a certain number of comparables exist, the arithmetic mean [17].
The referring court considered that the outcome of the dispute depends on the answer to the question referred, given the principle of the primacy of EU law, under which national courts must apply EU rules with direct effect in priority over conflicting national law [21, 22].
The referring court expressed its own view that the national rules requiring adjustment to the median value of the arm's length range of financial indicators are not contrary to Article 26(2) and Article 63 TFEU, in situations where those national rules apply generally to all economic operators in comparable situations [24].
Outcome
The document records the lodging of a request for a preliminary ruling by the Curtea de Apel Oradea to the Court of Justice of the European Union, dated 2 July 2026, with the decision to refer dated 22 May 2026.
The text sets out the question referred for a preliminary ruling on the interpretation of Article 26(2) and Article 63 TFEU in connection with national transfer pricing adjustment rules, but it does not contain a ruling or answer from the Court of Justice.
Tp method highlighted
The transfer pricing dispute concerned intra-group transactions between the appellant, Romagnetics Srl, and its related Belgian partner, AM Belgium, for the years 2017-2021 [2].
The tax authorities found that the appellant's profit margin indicator (RRV) fell outside the interquartile range of the 14 comparable companies identified in the appellant's own transfer pricing file, and adjusted the appellant's revenue to the median RRV value of those comparables [4].
Under Article 11(4) of the Tax Code, methods for determining market value of related party transactions include the comparable uncontrolled price method, the cost-plus method, the resale price method, the net margin method, the profit split method, and any other method recognised in the OECD Transfer Pricing Guidelines [17].
Under Article 9(1) and (2) of ANAF Decree No 442/2016, the tax authorities adjust or estimate transfer prices to the value represented by the central market trend, defined as the median value of the arm's length range of financial indicators or comparable transactions, or, where a maximum of three comparables are identified, the arithmetic mean [17].
The appellant relied on paragraph 3.62 of the OECD Guidelines, which states that where a range comprises results of relatively equal and high reliability, any point within the range may be argued to satisfy the arm's length principle [18].
Major issues / areas of contention
- Whether Article 26(2) and Article 63 TFEU preclude national legislation requiring tax authorities to adjust transfer prices between related parties to the median value of the arm's length range of financial indicators or comparable transactions.
- Whether adjustment to the median, rather than to any other point in the arm's length range (such as the lower quartile), is compatible with the free movement of capital under Article 63 TFEU.
- The relationship between Article 11(4) of the Romanian Tax Code, Article 9 of ANAF Decree No 442/2016, and paragraph 3.62 of the OECD Transfer Pricing Guidelines, which states that any point within a reliable arm's length range may satisfy the arm's length principle.
- The application of the principle of primacy of EU law where national tax legislation may conflict with directly effective TFEU provisions.