Companies declared inactive by ANAF

Important victory obtained by Pavel, Mărgărit and Associates for the business environment – the court suspends an abusive ANAF inactivity decision and reaffirms the principle of tax fairness The situation of companies declared inactive by ANAF within “The Ghost Nest” has generated a strong wave of reactions in the business community. Thousands of businesses suddenly found themselves with frozen accounts, suspended operations, and hesitant partners. Among them was an inactive company based in Bucharest, which sought assistance from Pavel, Mărgărit & Associates, a legal team composed of an experienced civil law lawyer and a fiscal lawyer specialised in litigation against public authorities. Through the diligent efforts of Pavel, Mărgărit & Associates, the court ordered the suspension of the tax inactivity decision, a measure which not only safeguarded the affected company but also reaffirmed the importance of legality and transparency in the application of tax law. This landmark ruling proves that abusive administrative measures can be effectively challenged when an inactive company declared by ANAF benefits from the expertise of a tax attorney or a lawyer for taxes. The case thus sets a valuable precedent for other companies facing similar situations before the tax authority. ANAF declared thousands of companies inactive in what became known as “The Ghost Nest” – a measure disputed by the business sector The name “The Ghost Nest” refers to an area of Bucharest where, according to ANAF, thousands of companies had their registered office and were deemed inactive. This sweeping classification led to the wrongful inclusion of many legitimate businesses in the registry of dormancy, even though they were fully operational. In August, ANAF issued over 2,000 inactivity decisions, effectively paralysing commercial activity for a large number of companies. To enable an inactive company to legally challenge such a decision, it is crucial for the business owner to first file an administrative appeal with ANAF. Only after this step can the request for suspension be filed under Article 14 of Law no. 554/2004 on Administrative Litigation, within 30 days from the date of being informed of the decision. Pavel, Mărgărit & Associates acted promptly after receiving the decision, submitting both the administrative appeal and, subsequently, the request for suspension under the Fiscal Procedure Code. This timely intervention ensured that the company was protected. The court confirmed that the mere labelling of a business address as a “ghost” location does not justify declaring a company inactive, thus preventing abuse of power by the tax authority. How a tax inactivity decision issued by ANAF can be suspended The suspension of a decision declaring an inactive company by ANAF may be obtained under Article 14 of Law no. 554/2004 on Administrative Litigation, within a maximum of 30 days from the date the taxpayer becomes aware of the content of the act. This is a procedural right designed to protect the taxpayer’s legitimate interests pending the resolution of the main case. For a reactivation to become possible, it is necessary to submit a formal request for suspension to the competent court, following the prior filing of the administrative appeal. It should also be noted that the suspension ruling issued by the court is not final and can be challenged by way of appeal within five days of its communication. What are the effects of suspending a tax inactivity decision The suspension of a decision declaring an inactive company produces immediate and significant effects: the business can resume normal operations, issue invoices, and regain its right to deduct VAT. Simultaneously, with the reactivation of the company, its name is temporarily removed from the registry of dormancy. The judgment obtained by Pavel, Mărgărit & Associates allowed the affected company to avoid irreparable losses and to continue its business without disruption. “Obtaining a favourable ruling for a company declared inactive by ANAF is essential to protecting both the continuity of economic activity and the taxpayer’s fiscal rights. The involvement of a tax lawyer or a lawyer for taxes is not only a strategic advantage but also a legal safeguard ensuring a fair challenge of the decision and the subsequent reactivation of the inactive company,” said Dr. Radu Pavel, Managing Partner at the Romanian Law Firm Pavel, Mărgărit & Associates. If your business has been affected by an ANAF inactivity decision, if you face issues related to your registered office, fiscal obligations, or administrative uncertainties, our team provides tailored legal assistance through a tax lawyer, tax attorney, civil law lawyer, and specialists in company registration. Don't navigate these challenges alone. Contact Us today for expert assistance tailored to your needs. Contact Us In practice, the suspension of such a decision acts as a crucial safeguard, providing the business with time to prove that it has been wrongfully declared inactive. In parallel, reactivation procedures can be prepared by a specialised legal team handling all necessary company registration steps, starting up your own business, and securing your headquarter office. In certain cases, companies may choose to establish their registered office through international lawyer headquarters, thereby ensuring a permanent and compliant headquarter office. This guarantees timely receipt of communications from the tax authority, preventing administrative blockage or wrongful declarations of dormancy by ANAF. An inactive company does not necessarily mean the absence of genuine economic activity, often it is the result of administrative overreach. Through the suspension obtained under Article 14 of Law no. 554/2004 on Administrative Litigation, Pavel, Mărgărit & Associates demonstrated that the law provides efficient mechanisms for protecting businesses against unjustified inactivity measures. It is crucial that the administrative appeal be submitted in due time and that the suspension request be filed within the statutory 30-day period. Pavel, Margarit and Associates Law Firm is one of the top law firms in Romania, providing high-quality legal services. The firm’s clients include multinational and domestic companies of great magnitude. In 2025, the law firm’s success stories brought it international recognition from the most prestigious international guides and publications in the field. As a result, Pavel, Margarit and Associates Law Firm ranked 3rd in Romania in the Legal 500’s ranking of business law firms with the most relevant expertise. The law firm is internationally recognized by the IFLR 1000 Financial and Corporate 2025 guide. Additionally, Pavel, Margarit and Associates Law Firm is the only law firm in Romania recommended by the international director of Global Law Experts in London in the Dispute Resolution practice area. All relevant information about Pavel, Margarit and Associates Law Firm can be found on the website www.avocatpavel.com.