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In a judgment of 12 May 20221, the Court of Justice of the European Union (CJEU) ruled that a customs representative cannot be held liable for the payment of value-added tax (VAT) on import, unless national legislation explicitly says so. By doing so, the court recognises that there is no legal basis in EU customs law for such liability, and that the answer is to be found in the EU VAT Directive. In turn, while the EU VAT Directive provides for the possibility for EU member states to make customs representatives liable for import VAT, this option needs to be transposed into national legislation implementing the Directive. Customs brokers cannot be liable for import VAT in those member states where VAT laws do not specifically provide for their liability.

The court goes one step further by adding that the principle of legal certainty requires that the persons liable for import VAT (customs representatives, as the case may be) must be expressly and unambiguously identified in the national legislation. For Belgium, the dedicated legal provision2 arguably fails to comply with this standard imposed by the court.

The role and liability of the customs representative

The importation of goods into the EU will trigger the incurrence of a customs debt.3 The EU’s customs laws lay down the rules governing that customs debt. These rules are set in regulations that are directly applicable in exactly the same manner in all EU member states. The primary person who is liable to pay the import duties is the declarant. This is the person in whose name the customs declaration is lodged.4

It is very common to use a service provider, the so-called customs representative, when completing customs formalities. Representatives assume a specific responsibility towards their principal, but also towards the customs authorities. Where customs representatives are acting in a so-called ‘indirect’ capacity (as opposed to a direct capacity), they are acting on behalf of a principal, but in their own name (not the name of the principal). Such an indirect representative will qualify as the declarant, with the corresponding liability for the payment of the customs debt to the authorities. This is a joint and several liability, together with the principal.5

Whereas EU customs laws clearly set out the rules determining the persons liable for the payment of customs duties, they do not explicitly cover the liability of the customs debtor for the payment of other taxes that are triggered at the time of import, such as VAT. In practice, however, customs authorities across the EU widely consider that the indirect customs representative is liable for the payment of both customs duties and VAT on import, even in the absence of a legal provision recognising such VAT liability. In U.I., the CJEU provides guidance on this matter.