BRIEFING DOCUMENT: ECJ CASE C-405/24 L. s.c. v Dyrektor Krajowej Informacji Skarbowej
Source: CURIA – Documents (Judgment of the Court (Eighth Chamber), 8 May 2025, Case C‑405/24) & VAT and Customs Update Resource
Date: 2025-05-08 (Date of Judgment)
Subject: Interpretation of EU VAT Directives regarding the exemption of small, non-commercial consignments imported from third countries.
Key Issue: Whether a Member State’s legislation can exclude small, non-commercial consignments sent from a third country by private individuals to private individuals residing in a different Member State from a VAT exemption at the point of importation.
Summary:
This briefing reviews the Judgment of the Court of Justice of the European Union (CJEU) in Case C-405/24, concerning the interpretation of Article 143(1)(b) of Directive 2006/112/EC (the VAT Directive) and Article 1 of Directive 2006/79/EC (the Small Consignments Directive). The case arose from a request for a preliminary ruling from the Polish Supreme Administrative Court regarding the application of a Polish law (Article 52 of the Law on VAT) which restricted a VAT exemption for imported small consignments to those where the consignee resided in Poland. The CJEU ruled that the relevant EU Directives preclude such national legislation, confirming that the VAT exemption applies irrespective of whether the consignee resides in the Member State of importation or another Member State.
Main Themes and Important Ideas/Facts:
- Scope of the VAT Exemption for Small Consignments: The central theme is the geographical scope of the VAT exemption for small consignments of a non-commercial character sent from third countries by private persons to other private persons within the EU.
- Interpretation of EU Directives: The Court’s judgment is based on a comprehensive interpretation of Article 143(1)(b) of Directive 2006/112 and Article 1 of Directive 2006/79, considering the wording, context, and purpose of these provisions.
- Literal Interpretation: The Court noted that Article 1(1) of Directive 2006/79 refers to consignments sent to private persons “in a Member State” without specifying the Member State of importation. The use of an indefinite article in several language versions supports this interpretation. The judgment states: “Since Article 1(1) of Directive 2006/79 does not refer to a specific Member State and does not mention, in particular, the Member State of importation, the wording of that provision tends to indicate that the exemption from VAT which it provides for applies to consignments sent to private persons in any of the Member States.”
- Contextual Interpretation: The Court examined the legislative history of the relevant directives. Directive 78/1035 (the predecessor to Directive 2006/79) and the proposal for that directive also referred to consignments sent to private persons “in the European Union,” indicating no intention to link the exemption to the consignee’s residence in the importing Member State. Furthermore, the objective of aligning the VAT exemption with customs duty exemptions (as stated in Recital 3 of Directive 2006/79) is relevant, as the corresponding customs regulations (Regulation No 918/83 and Regulation No 1186/2009) also applied to consignees within the “customs territory of the Community” without specifying the Member State of importation. The judgment highlights: “Recital 3 of Directive 2006/79 states that, for practical reasons, the limits within which the exemption from VAT on the importation of small consignments of a non-commercial character from third countries is to be applied should, for practical reasons, be as far as possible the same as those laid down for exemptions from import duties by Regulation No 918/83.”
- Teleological Interpretation (Purpose): The Court considered the purpose of the exemption, which is to simplify arrangements for low-value, non-commercial consignments between private individuals, acknowledging their “emotional character” and typically low value. The judgment notes: “From that perspective, there is no difference between goods in consignments of a non-commercial character sent from third countries by private persons to other private persons, depending on the Member State of residence of the consignee of the consignment.”
- Preclusion of Restrictive National Legislation: The CJEU concluded that a national law, such as the Polish Article 52(1) of the Law on VAT, which limits the VAT exemption to consignments where the consignee resides in the Member State of importation, is contrary to the relevant EU Directives. The final ruling states: “Article 143(1)(b) of Council Directive 2006/112/EC… and Article 1 of Council Directive 2006/79/EC… must be interpreted as precluding legislation of a Member State which excludes from the exemption from VAT provided for in those provisions small consignments of a non-commercial character sent from a third country by private persons to private persons residing in another Member State.”
- Definition of “Small Consignments of a Non-Commercial Character”: Article 1(2) of Directive 2006/79 defines these consignments as being:
- Of an occasional nature.
- Containing goods intended for personal or family use, without commercial purpose indicators.
- Having a total value not exceeding 45 euros.
- Sent by the sender to the consignee without payment.
Implications:
The judgment clarifies that Member States cannot restrict the VAT exemption for small, non-commercial consignments imported from third countries based solely on the consignee’s residence being in a different Member State. This ensures a consistent application of the exemption across the EU and aligns the VAT treatment with the corresponding customs duty exemption. It has direct implications for national laws that impose such restrictions, requiring them to be amended to comply with EU law.
See also
