1. Why ICAS is back on everyone’s radar
A specific turnover tax for the oil & gas sector already existed, but Government Ordinance no. 3/2025 (GO no. 3/2025) materially expanded the scope and tightened the mechanics (including for non-resident operators without a Romanian permanent establishment), and with additional compliance burdens (notably a EUR 1 million guarantee).
The result is that a levy which may previously have been manageable for certain operators now raises structural questions of: (i) predictability and proportionality under Romanian constitutional standards; and (ii) compatibility with EU internal-market constraints, especially where the tax behaves like a cascading turnover charge along multi-stage supply chains.

2. The amended mechanics at a glance
Under the amended art. 46^2 of the Romanian Fiscal Code, ICAS is calculated from the beginning of the fiscal year (which, in practice, requires computing the tax base starting 1 January 2025, despite the ordinance entering into force only in early February 2025).
For foreign legal entities without a registered permanent establishment, the provision includes specific compliance architecture, including registration/representation rules and the obligation to constitute a EUR 1,000,000 guarantee (with strict timelines, potential execution, and severe operational consequences).

3. The “cascading tax” problem: when a turnover levy stops being neutral
A recurring criticism is that, in multi-stage distribution models (e.g., producer/importer → wholesaler → distributor/retailer), ICAS can operate as a cascading charge, being applied repeatedly to turnover generated at successive links of the same economic flow, without a VAT-type deduction mechanism.
This matters because it can produce outcomes where the effective burden:
is driven by supply-chain structure rather than economic value added;
penalizes intermediation models and multi-link chains; and
becomes difficult to reconcile with neutrality and proportionality expectations in both constitutional and EU-law terms.

4. Non-resident operators: the guarantee and proportionality concerns
OG 3/2025 introduced (or significantly sharpened) a regime for non-resident entities without a permanent establishment which, among other things, requires a fixed EUR 1,000,000 guarantee, with tight deadlines and severe consequences for non-compliance (the prohibition on carrying out any customs formalities or excise-related procedures with respect to goods under the operator’s responsibility).
From a legal-risk perspective, a one-size-fits-all guarantee can be challenged as:
disproportionate (not calibrated to individual risk, turnover, compliance history);
structurally discriminatory in effect (applies only to a category strongly correlated with cross-border establishment); and
capable of making the Romanian market less attractive for EU operators.

5. EU law pressure points: where ICAS can collide with internal-market rules
Even where a tax is formally “general” or “sectoral,” EU law looks at its effects.
Freedom of establishment (Articles 49 and 54 TFEU) – If ICAS (especially combined with the guarantee and compliance hurdles) makes cross-border operation materially less attractive, it can be framed as a restriction by effect on establishment, per well-known CJEU standards that capture measures which hinder or reduce attractiveness, even absent overt nationality criteria.
Internal taxation and competition distortion (Articles 110 – 113 TFEU) – Where the economic design of ICAS burdens multi-link chains more heavily than integrated models, the measure can be argued to distort competition within the internal market, an angle that becomes relevant when supply chains are intrinsically cross-border.
VAT system integrity (Article 401 VAT Directive) – The strongest operational “EU test” often comes from Article 401 of the VAT Directive, which constrains national levies that compromise the functioning of the common VAT system. The concern here is that ICAS may behave like a turnover charge with cascading characteristics, affecting neutrality and trade.

6. Constitutional pressure points in Romania: predictability, legality, and fair taxation
Several constitutional themes are typically invoked against taxes with the ICAS profile as amended:
Legal certainty and predictability in fiscal matters (art. 1(5) of the Constitution and the broader constitutional rule-of-law standards), especially when rules operate cumulatively, affect ongoing fiscal years, or delegate essential elements to secondary legislation.
Non-retroactivity / foreseeability concerns (art. 15(2) of the Constitution), when the tax is applied in a way that effectively impacts the fiscal year as a whole after the year has started (through “cumulative from the beginning of the year” mechanics).
Fair allocation of the tax burden and proportionality (art. 56 of the Constitution), where the burden is detached from profitability and may create excessive incidence relative to economic margins.
Reserve of law in taxation (art. 139 of the Constitution) and the limits of delegated legislation (art. 108 of the Constitution), particularly where essential tax components are effectively shaped by executive acts.
EU law primacy and the duty of conformity (art. 148 of the Constitution), given that a domestic fiscal measure incompatible with EU rules cannot survive constitutional review.

7. One practical question: how does ICAS apply in 2026?
In one sentence: ICAS continues to apply in 2026 because the applicability window of art. 46^2 was extended (in December 2025) “until 31 December 2026 inclusive” (or the last day of a modified fiscal year ending in 2027), while the tax remains calculated and paid quarterly on a cumulative basis.

8. Takeaways for businesses
For operators in the Romanian oil & gas chain (especially groups with cross-border structures) ICAS after GO no. 3/2025 is not just a cost item. It is a legal-risk driver that may justify:
careful modelling of supply-chain incidence (to identify cascading effects),
documentation of discriminatory or disproportionate burdens (notably on non-residents),
adopting a litigation strategy that aligns constitutional arguments (predictability, legality, fair burden) with EU law arguments (establishment, internal taxation, VAT-system integrity).

Elena Carabineanu
Counsel