The court will have to re-examine the case on application of value-added tax during unfinished customs procedure
25. septembris, 2015.
On 25 September, the Department of Administrative Cases of the Supreme Court abolished the judgement of the Administrative regional court, which quashed the decision of the State Revenue Service to impose an obligation to the applicant to pay value-added tax for goods stolen during transportation of goods from Estonian customs authority to consignees’ customs authority in Latvia. By abolishing the judgement of the court of appellate instance, it must re-examine the case in part concerning calculated value-added tax.
In its judgement, the Supreme Court pointed out its previous conclusions that, considering Paragraph Two Section 12 of the law “On Value-Added Tax” (respective provision states that tax must be paid by any person, when issuing goods for free circulation), value-added tax must be paid the same way, or when import tax is paid, namely, when, depending on particular circumstances, it becomes chargeable. However, the responsible person is the one, who is responsible for performance of respective actions (in accordance with the law – any person). Therefore, when determining value-added tax debt and a person responsible for it, provisions of Customs Code must be applied to the extent, if regulation on value-added tax does not set special provisions. The Supreme Court pointed out in its judgement: “Although the purpose of the Customs Code does not include determination of payment procedure of value-added tax and persons responsible for paying of this tax, it, however, does not mean that provisions of the Customs Code are not applicable in collection of value-added tax”.
The Supreme Court compared the examined case with conclusion stated in the judgement by Court of Justice of the European Union of 15 May 2014, case No. C-480/12, namely, that obligation to pay value-added tax incurs in case goods are imported, which, in turn, may be established, if goods are removed from external transit procedure of the Community, causing customs debt.
On 4 March and 8 March 2010, the applicant – Estonian company OU “Paljassaare Tolliladu”, as a principal, processed transit declaration for dispatch of goods – frozen humpback salmon caviar – to “Reneta” Ltd. Estonian customs authority was indicated as consignor’s customs authority, and customs control point in Saldus was indicated as consignee’s customs authority. On 31 May 2010, Estonian customs authority declared that Latvian customs authority is responsible for reimbursement of debt in respect of this transit operation.
The State Revenue Service performed check on unclosed customs procedure. By the decision of the State Revenue Service of 2 November 2010, customs debt of 27 278.67 Ls, inter alia, customs tax of 8241.29 Ls and value-added tax of 19 037.38 Ls, was calculated to the applicant to be paid to the state budget.
By the judgement of 30 July 2014, the Administrative regional court abolished the appealed decision in the part concerning obligation imposed to the applicant to pay value-added tax of 27 087.75 euro (19 037.38 Ls). The court of appellate instance upheld the decision in rest part.
Information prepared by Baiba Kataja, the Press secretary of the Supreme Court
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