On 1 July 2022 another important change in the tobacco tax sector came into force. Substitutes for manufactured tobacco, which were previously not subject to tobacco tax in Germany, are taxable as from 1 July 2022. This applies, in particular, to liquids for e-cigarettes, the market for which is ever-increasing. Under certain conditions, tobacco tax will be due on these liquids, even if they do not contain any nicotine. Those taxable persons concerned will, consequently, be faced with new challenges.
In practice, the lack of deductibility of irregular import VAT often leads to a final VAT burden falling upon the companies involved. The remedy could, in certain cases, be the analogous application of the customs law provision on the extinguishment of import duties. However, the ECJ has, in a recent decision, now rejected this.
The start of 2022 has brought with it some changes. This also applies to matters relating to customs law. Our newsletter summarizes the most important changes - also with regard to foreign countries.
The planned modernisation of the German Tobacco Tax law has now been a topic of debate for many months. On 11 June 2021, during the course of an overnight meeting, the German Bundestag passed far-reaching amendments to the Tobacco Tax Act by means of the so-called Tobacco Tax Modernisation Act. From 1 January 2022, cigarettes, water pipe tobacco and so-called heat-not-burn products will be taxed at much higher rates. As from 1 July 2022, the substances for so-called e-cigarettes will also be subject to tobacco taxation, even if they do not contain any nicotine.
In its judgment of 3 March 2021 in the case C-7/20 – VS, the European Court of Justice upheld its previous case law concerning the perspective it has adopted on import VAT in the case of infringements. From the ECJ’s perspective, and in contrast to the concept of import from a customs law perspective, the physical transfer or the place of detection of the infringement is not decisive for the importation and thus for the incurrence of import VAT. Rather, what is decisive is in which state the imported object enters the economic network.
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.
