Comments on ECJ C-657/22: Higher Excise Does Not Automatically Trigger VAT on Energy Products

The Court of Justice of the European Union ruled on April 25, 2024, in case C-657/22.
The ruling clarified that VAT is not due on the additional excise duty for energy products reintroduced into tax warehouses and intended for heating fuel.
A Romanian company reintroduced an energy product into its tax warehouse due to compatibility issues with customers’ heating systems.
The company did not comply with national regulations on markings, coloring, and customs notification.
Romanian tax authorities applied a higher excise duty rate for unmarked energy products, specifically the rate for diesel fuel, which is over twenty-one times higher than the rate for heating fuels.
VAT was also applied to the increased excise duty.
The Court noted that under Directive 2003/96/EC, energy products are taxed differently based on their actual use to avoid unequal treatment.
Member States have discretion in determining penalties for violations but must adhere to EU principles.
A penalty regime that imposes the highest excise duty rate on heating fuel, significantly higher than for diesel, violates the EU principle of proportionality.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.