For months, the EU and the United Kingdom (UK) have been negotiating an agreement to regulate their mutual relations after Brexit. After several missed deadlines, the parties finally reached a last minute agreement on 24 December 2020. This agreement is to apply as from 1 January 2021 and regulate, among other things, trade relations between the EU and UK. The previous Withdrawal Agreement remains unaffected. Our latest newsletter summarizes what the trade agreement means for VAT and customs law.
Upon the expiry of the agreed Brexit transition period on 31 December 2020, EU legislation on excise duties will no longer apply in the United Kingdom (UK). It will no longer be possible to dispatch or receive excise goods directly to and from the UK. In future, such transactions will have to comply with customs formalities, as well as with EU and UK excise legislation. In this newsletter you will find out what the UK excise duty rules, applicable as from 1 January 2021, will mean for companies established in the EU.
Regardless of the outcome of the negotiations on a free trade agreement, customs formalities for the movement of goods between the EU and the UK will have to be complied with as of 1 January 2021. Although the UK will provide simplifications concerning importation for a transitional period of six months, these will only apply to companies established in the UK. In our current Customs Newsletter you can find out about the consequences of the UK's new customs and import VAT regulations for companies established in the EU.
The customs value of goods often consists of more than just the price invoiced. Transport costs are not the only other items to be considered. In particular, if the buyer provides the manufacturer of the goods in the third country with objects or intangible assets free of charge, these may impact on the ultimate customs value. The ECJ has now decided, in its judgment of 10 September 2020 (C-509/19 – BMW), that this “impact” is not restricted to intangible assets developed outside the EU.
The UK ceased to be a part of the EU on 1 February 2020. Due to the agreed transitional arrangements, this fact has, so far, largely gone unnoticed in everyday life. However, this transitional arrangement will end in 100 days. Regardless of whether the UK and the EU ultimately reach a trade agreement, a customs union between the two areas no longer exists. Border controls and customs formalities will become necessary. Other changes are also to be expected. In this newsletter we summarise the main points, to the extent that they are currently known.
In the case Pfeifer & Langen (C-97/19), the ECJ held that an amendment of the name of the declarant in a customs declaration is possible in accordance with Art. 78 of the CC. The Member States’ domestic courts, including German courts, have not previously considered this possible. However, the application of this new judgment is limited to special circumstances. This limitation on amendment will, in general, continue to apply for the foreseeable future, despite the ECJ decision, due to the current legal situation, with Art. 173 of the UCC, which provides stricter conditions for the amendment of customs declarations as Art. 78 of the CC did.
The European Commission has updated its information on customs related issues due to the COVID-19 pandemic. In our previous Newsletter 01/2020, we reported on exemption from import duties and simplifications in the movement of goods. In this current newsletter we summarize the most important details regarding the preferential treatment of goods, temporary storage, the transport procedure and simplified customs declarations.
The outbreak of SARS-CoV-2 continues to have an overwhelming impact on the entire global economy and everyday life. Many goods that were previously plentifully available are currently in short supply. This includes urgently needed medical equipment. The European Commission has now decided to offer relief from customs duty and import VAT for these goods. In addition, other measures have been introduced which are intended to promote the movement of goods, as a whole.
Almost one year after the Union legislator changed the definition of the term “exporter”, the German customs authorities have now finally updated the Regulation "Export procedure and re-export". In doing so, they have fundamentally changed their understanding of the term "exporter". The new definition offers companies more legal certainty and flexibility. In principle, they can, with the appropriate contractual agreement, now determine the exporter.
In the FedEx case, the ECJ once again dealt with the incurrence of import VAT in cases of conduct contrary to customs law. This time it was a question of whether customs infringements in one Member State lead to the incurrence of import VAT in that Member State, even though the goods have indisputably gone to another Member State. The ECJ has consistently followed its previous case law by ruling that, despite the customs infringements, the import VAT only arises in the Member State in which the goods entered the economic network of the Union.
