Tax & Legal

The European Court of Justice (ECJ) had to deal with questions regarding the exemption from import VAT on the re-importation into the EU of goods exempt from customs duties. Specifically, whether the import VAT exemption is accessory to the exemption from customs duties for re-imported goods or if both exemptions are to be applied independently.

The European Commission is taking action to tackle risks stemming from low-value imports sold via non-EU online retailers and marketplaces hosting non-EU traders.

In the present proceedings, the European Court of Justice (ECJ) had to decide whether the Commission may refuse to recognize a relocation of production solely on the ground that the relocation is intended to escape customs duties imposed in connection with a trade dispute between two States. The plaintiffs claim for the relocation of the origin of the goods (here: Harley Davidson motorcycles) was dismissed by the General Court. The ECJ as the court of last resort also rejected the grounds of appeal.

Following a request for a preliminary ruling by the Hamburg Tax Court, the ECJ held that Article 215 (4) Customs Code, dealing with the determination of the place of origin of import VAT is not automatically applicable if goods were brought into the customs territory of the EU in breach of customs rules and if they are subsequently transported to another Member State.

In a Hungarian case the European Court of Justice had to review the obligation of the Member States to provide for effective, proportionate and dissuasive penalties for failure to comply with the customs legislation and held that a fine corresponding to 50% of the shortfall in customs duties is in accordance with the principle of proportionality.

On 1 July 2022 the European Commission adopted a resolution enabling Member States to temporarily waive customs duties and VAT on the importation from third countries of food, blankets, tents, electric generators and other life-saving equipment destined for Ukrainians affected by the war.

On 30 June 2021, the Federal Ministry of Finance published information on its homepage regarding the abolition of the small consignment exemption limit.