Where should the import VAT be levied in case of illegally imported goods?
C‑791/22. – G. A. | Even for goods illegally imported, the import VAT must be levied in the Member State where the goods have entered into the economic circulation of the Union.
G.A. is an individual residing in Poland, who, on the local “black market”, purchased a commercial quantity of cigarettes with Ukrainian and Belarusian stamps, then transported them to Germany and handed them over to a German buyer. However, the German customs authorities caught them, and for the confiscated cigarettes, they imposed an obligation on G.A. to pay customs duties and import VAT.
The customs decision took into account that, according to a special provision of the Union Customs Code, customs debt of less than 5000 euros must be paid at the place of determination, and it believed that since the customs debt arose in Germany, the import VAT should also be paid here. G.A. filed a lawsuit for the judicial review of the customs decision. The Hamburg court had doubts about whether the import VAT had to be paid in Germany because it considered that the place of supply rule of the VAT Directive prevails, according to which the place of supply for the import of goods is the Member State where the goods are located when entering the Union, which, in this case, is Poland.
The European Court confirmed in its judgment that, based on the place of supply rules provided by the VAT Directive, the import VAT is payable in the Member State where the goods enter the economic circulation of the Union. In this case, it is Poland. The provision of the VAT Directive stating that import VAT must be paid when customs duty is due only regulates the time of the obligation to pay taxes, which does not affect the place of supply.
