The Part, the Whole, and the Recycling

In case C-365/22, a Belgian trader purchased permanently withdrawn or scrap cars from the market and resold them as spare parts without removing anything from the vehicles.

The trader applied the margin tax rules for used goods, which were not accepted by the Belgian tax authorities. They argued that the cars, in their current condition or after refurbishment, were not suitable for reuse, and buyers only purchased the cars for their spare parts.

In contrast, the European Court of Justice attributed significance to this matter (and approved margin taxation for such cases) if, based on objective circumstances (such as the appearance and condition of the vehicles, their sales value, invoicing methods, or the economic activity of the persons acquiring the vehicles), the extractable parts could still be used, even after refurbishment, thus remaining in the economic cycle.