- Returning Goods and VAT Exemption: Goods leaving the EU lose their Union status and are treated as non-Union goods upon reimportation, necessitating customs formalities and potentially incurring VAT. However, legislation provides relief for “returning goods” that meet specific conditions, allowing for avoidance of both import duties and VAT.
- Case C-125/24 (Palmstråle) and Legal Inquiry: The case centers on whether the VAT exemption for returning goods is contingent on fulfilling all customs formalities, even when the goods substantively qualify for exemption. The Swedish court has referred this question to the EU Court, prompting an analysis of the relationship between the Union Customs Code and the VAT Directive.
- Advocate General Kokott’s Opinion: AG Kokott argues that the VAT exemption should not be denied solely due to procedural errors in customs regulations, emphasizing the different purposes of VAT and customs law. She suggests that compliance with customs formalities should not be a strict prerequisite for the VAT exemption, advocating for a more flexible interpretation that prioritizes substantive conditions over administrative compliance.
Source VAT-consult
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