ECJ C-7/20 (Hauptzollamt Münster) – Judgment – VAT on importation arises in the Member State where an obligation imposed by the customs legislation of the EU has not been complied with

On March 3, 2021, the ECJ issued its decision in the case C-7/20 (Hauptzollamt Münster). This case is about the “import” of car from Turkey to Germany for private journeys for a few months, and is relevant for VAT, customs and tariff classification.

Article in the EU VAT Directive

Article 71(1) of Council Directive 2006/112/EC (Chargeable event and chargeability of VAT)

Article 71
1. Where, on entry into the Community, goods are placed under one of the arrangements or situations referred to in Articles 156, 276 and 277, or under temporary importation arrangements with total exemption from import duty, or under external transit arrangements, the chargeable event shall occur and VAT shall become chargeable only when the goods cease to be covered by those arrangements or situations.
However, where imported goods are subject to customs duties, to agricultural levies or to charges having equivalent effect established under a common policy, the chargeable event shall occur and VAT shall become chargeable when the chargeable event in respect of those duties occurs and those duties become chargeable.

Facts

The applicant resides in Germany.
In October 2017, he transferred his passenger car with a Turkish registration number from Turkey to Germany without reporting it to the customs office.
At a police check in Germany it was found that the car had been imported.
In March 2018, the applicant moved the car back to Turkey again, where he sold the car.
Defendant, the main customs office Münster imposed import duties and VAT on imports on the applicant.
The defendant takes the view that the applicant has unlawfully introduced the car into the customs territory of the European Union.
The applicant takes the view that there is no question of a taxable importation because he uses the car for a short period only as a means of transport for private journeys.
According to his own claims, he implicitly placed the car under the Temporary Import regime.
The question is whether Article 71(1) of the VAT Directive is to be interpreted as meaning that that the provision of Article 87(4) of Regulation 952/2013 applies by analogy to a VAT debt triggered by importation.

Questions

Is the second subparagraph of Article 71(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax ¹ to be interpreted as meaning that Article 87(4) of Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 establishing the EU Customs Code can be applied mutatis mutandis to the recovery of VAT (import turnover tax)?

AG Opinion

None

Decision (Unofficial translation)

Art. 71 para. 1 subpara. 2 of the Council Directive 2006/112 / EC of November 28, 2006 on the common system of value added tax is to be interpreted as meaning that the import value added tax for goods subject to duty is incurred in the Member State in which an infringement of an obligation under Union customs law has been established, provided that the question in question Goods entered the economic cycle of the Union in this Member State, even if they physically entered the customs territory of the Union in another Member State.

Summary

According to the CJEU, the VAT on importation with regard to goods subject to customs duty arises on the basis of Article 71 (1) (2nd subparagraph) of the VAT Directive in the Member State where it has been established that an obligation imposed by the customs legislation of the EU has not been complied with, when the goods concerned – even though they have been physically introduced into the customs territory of the Union in another Member State – have been brought into the EU economic circuit in the Member State where this determination took place.

Source