Import VAT Is Not Part of the Customs Debt

Abstract

The Court of Justice of the European Union, with the ruling of 12 May 2022 rendered in case C-714/20, affirmed two important principles: first of all, the Court held that Article 77 (3) of the Union Customs Code must be interpreted as meaning that, on the basis of that provision alone, the indirect customs representative is only liable for the duties due on goods which he has declared to customs, while not being also liable for the value added tax for import of the same goods; moreover, this representative, pursuant to Article 201 of the Council Directive 2006/112/EC - the European Community -, pertaining to the common system of value added tax, cannot be held liable for the payment of the value added tax on imports, jointly and severally with the importer, in the absence of national provisions that designate or recognize him or her, explicitly and unambiguously, as the payer of this tax. The legal question submitted to the Court of Justice has a long history. Already during the validity of the Community Customs Code, repealed from 1 May 2016, several customs administrations of the Member States of the European Union (including Italy) used to, in case of revision of the import customs declaration from which resulted in a greater duty and VAT (Value Added Tax) debt, notify an assessment notice both to the importer and to his/her indirect customs representative, jointly and severally, to recover both taxes. This is a consequence that derived, under the Community Code, from Article 201, paragraph 3, and, in the Union Code, from the express provision of Article 77, paragraph 3: both provisions, in identifying the figure of the debtor of the customs duties, state it is the ‘declarant’, while ‘In the event of indirect representation, the person on whose behalf the customs declaration is made shall also be a debtor’. However, this approach has been the subject of numerous disputes, fundamentally based on the consideration that the reference to Article 77 of the Union Customs Code (and, before that, Article 201 of the Community Customs Code) did not appear relevant to justify the recovery of VAT. The Court of Justice has now clarified the meaning of these provisions. Importer, representation, declaration, solidarity, person, territory, obligations, duties, value added tax