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The Romanian company provides transportation services. It transported goods from the port of Rotterdam (the Netherlands) to Cluj-Napoca (Romania) under transit procedure. Goods were released … into free circulation in Romania. It treated transportation service as VAT exempt because it assumed that transportation cost was included into the import VAT taxable base. Tax authorities claimed otherwise: the taxpayer failed to provide documents confirming that the transportation cost was included into the import VAT taxable base. Consequently, they denied the exemption. The dispute between the company and the tax authorities reached as far as the Court of Justice of the EU (CJEU), which recently issued clarifications on the application of the provisions of the VAT Directive in this case.

If you import aluminium, steel and iron products, cement, fertilisers, hydrogen or electricity, you should already have answered the question of who in your company speaks the language of the … Carbon Border Adjustment Mechanism (CBAM), i.e. is knowledgeable in this area and responsible for compliance. And not just you, but also your suppliers from outside the EU, as they will provide you with information on the carbon emissions generated in the production of goods. So who in your supplier company speaks the CBAM language? In this article we look at the links between CBAM and customs, as well as other areas, to help you answer the question of whether the primary responsibility for CBAM compliance should lie with the person responsible for customs matters.

Skaitytojo klausimas: Koks bus muitinės vaidmuo pereinamuoju laikotarpiu (2023 m. spalis – 2025 m. gruodis) įgyvendinant pasienio anglies dioksido kontrolės mechanizmą (PADKM)? Atsakydami į klausimą … ne tik apžvelgiame muitinės vaidmenį, bet ir atkreipiame dėmesį į visų susijusių asmenų vaidmenis ir pabrėžiame ataskaitas teikiančio deklaranto atsakomybę.

Instead of declaring non-Union goods for release for free circulation under code 40 (in which case import VAT will also become due), an importer established in another Member State (MS) than … that in which such goods will be released for the procedure (and will thus become Union goods) has – often using the services of a representative who is either a freight forwarder or a customs broker – the option of declaring code 42, thus avoiding the obligation to pay the import VAT and regular VAT in the import clearance MS, with the consequence that (only) the regular VAT is to be paid in the MS of destination (where the importer or consignee is established) on an intra-EU acquisition (and the importer can thus avoid a VAT registration in the MS of import clearance). This is already my summary of the opportunities. The remaining part of this article will deal with the pitfalls experienced by customs practitioners in Austria (AT) and Germany (DE). At the end, I will also try to give an outlook into the future.

The EU-UK Trade and Co-operation Agreement signed at the end of 2020 made very little mention of the impact of VAT on UK businesses trading within the EU. Zero Tariffs and Zero Quotas were the … most pressing concerns for companies looking to see minimal disruption to their trading activities. However, the complexities of VAT legislation and application for businesses are a stark reminder that difficulties remain when trading both out of and with the UK. One of these difficulties relates to the VAT Triangulation concept, essentially a transaction and supply of goods where there are three or more EU member states involved and the supply chain is not as simple as 1, 2, 3. Most importantly, however, is that the UK is no longer able to benefit from the VAT Triangulation simplification offered by the EU, which will therefore result in the need for UK businesses to have to register for VAT purposes when making sales into the EU.

Editors' note: In this article, Mr Rowbotham, author of numerous books on trade and logistics topics, shares some parts of the book he is currently working on. Topics covered: Introduction to … domestic duties, excise duty and the UK due diligence requirements, for both domestic and import purposes. This is the continuation of the articles "The risk challenge of indirect tax - customs (Part I)” and "The risk challenge of indirect tax - VAT (Part II)".

Editors' note: In this article, Mr Rowbotham, author of numerous books on trade and logistics topics, shares some parts of the book he is currently working on. Topics covered: Introduction to … VAT and the challenges it poses for businesses, types of VAT fraud, EU triangulation (How do we prove VAT zero-rating?), call off and consignment stock VAT, postponed VAT accounting. This is the continuation of the article "The risk challenge of indirect tax - customs (Part I)”.

Indirect tax - customs duty, excise duty and VAT - while it must be paid correctly, also offers various cash enhancement opportunities, which is crucial for all organisations seeking to continuously … improve their internal indirect tax function. However, the prerequisite is due diligence. In this article, we overview the host of indirect taxes and indirect tax compliance obligations and focus on the “prerequisite” by discussing risk analysis in customs control based on the rules of HRMC (the UK Customs) and highlighting the importance to achieve “low-risk” status. We also overview customs duty. In the following articles, we will discuss VAT and excise more in detail.

Those who pay their mortgages have become accustomed to paying higher interest rates. However, this applies not only to mortgages, but also to other interest and late payment charges that we … may not think about in practice. For example, increased interest on customs duties, which are additionally charged by customs authorities when discrepancies are found after customs clearance.

In a recent ruling, the Court of Justice (the Court) delivered its decision in the case of Zes Zollner Electronic, addressing the issue of amending customs declarations and the consequences of … failing to declare the correct quantity of goods. The case involved a Romanian company, Zes Zollner Electronic (ZZE), which declared only half of the actual quantity of goods received, resulting in a customs infringement.

To reduce carbon emissions in the EU and globally, the EU has put in place a legal framework - the Carbon Border Adjustment Mechanism (CBAM), set out in a recently published regulation. The CBAM … will apply to imports of certain goods such as fertilisers, screws, wires, hydrogen, etc., the range of which will be expanded. The obligation for importers of these goods or their indirect customs representatives to submit quarterly CBAM reports comes into force already this year.

The EU Commission has presented a proposal for the reform of the Union Customs Code (as well as amendments of several other legal acts). In view of the largely failed centralisation (and thus … standardisation) of customs activities and – apart from ICS2 – IT systems, as well as a lack of harmonisation of customs sanctions, the proposals for an EU Customs Data Hub, an EU Customs Authority, the shift to the (deemed) importer as the person responsible for duties and all compliance aspects, as well as a partial harmonisation of customs sanctions are bold steps with regard to which the business community suffering from unequal treatment within the EU Customs Union and Single Market can only wish the EU Commission success in the Council and the Parliament.

In the European Union customs law, it is possible for an economic operator to obtain binding tariff or origin information decisions, which provide assurance about the tariff classification or … origin of goods. However, does such a customs decision always guarantee legal security just because national customs has issued a favorable decision to the trader?

Classification under a tariff subheading is not an end in itself but serves to determine which measures, tariff or other, should be applied to the goods concerned. However, in case of inward … processing in the EU, the question has been raised, whether the duty rate of the processed goods at the time of release for free circulation must be applied in certain cases even though the tariff classification, customs value, and origin of the imported goods are the basis for the duty calculation.

Reader's question: Goods FOB Singapore are shipped to Tallinn. Rotterdam is the port of transshipment (containers are only moved from one vessel to another). What transportation costs - Singapore-Rotterdam … (€ 2,000) or Singapore-Tallinn (€ 3,000) - should be included into the dutiable value of goods upon their importation in Estonia?

In mid-December 2022, negotiators of the Council and the European Parliament reached an agreement of a provisional and conditional nature on the Carbon Border Adjustment Mechanism (CBAM). The … agreement needs to be confirmed by ambassadors of the EU member states, and by the European Parliament, and adopted by both institutions before it is final. However, according to the agreed timetable, the transition period for its implementation is set to come into force in October 2023. What should companies do?

Tariff quotas mean less or no duty when importing goods. Most tariff quotas are allocated on a first come, first served basis; therefore, the timing of lodging a customs declaration might be … crucial. What if, due to issues concerning customs IT systems, you are late and the quota is exhausted? Can you ask customs to invalidate the customs declaration and wait until the new tariff quota is opened?