Opinion of Advocate General Campos Sánchez-Bordona delivered on 23 January 2025.#‘Tauritus’ UAB v Muitinės departamentas prie Lietuvos Respublikos finansų ministerijos.#Request for a preliminary ruling from the Lietuvos vyriausiasis administracinis teismas.#Reference for a preliminary ruling – Customs union – Union Customs Code – Method for determining the customs value – Article 70 – Transaction value – Goods imported on the basis of a provisional purchase price – Definitive price dependent on various factors not known on the date of acceptance of the customs declaration.#Case C-782/23.

1.

The dispute giving rise to this request for a preliminary ruling concerns the amount of interest on arrears due on account of the late payment of the value added tax (VAT) relating to an import.

2.

In order to determine the amount of that interest, the exact amount of the import VAT must be established. The import VAT amount depends, in turn, on how the customs value of the imported goods is calculated, in accordance with Regulation (EU) No 952/2013. ( 2 )

3.

Article 15 (‘Provision of information to the customs authorities’), paragraph 2, states:

‘The lodging of a customs declaration … by a person to the customs authorities … shall render the person concerned responsible for all of the following:

…’

4.

Article 48 (‘Post-release control’) provides:

‘For the purpose of customs controls, the customs authorities may verify the accuracy and completeness of the information given in a customs declaration … and the existence, authenticity, accuracy and validity of any supporting document and may examine the accounts of the declarant and other records relating to the operations in respect of the goods in question … after having released them.’

5.

Article 70 (‘Method of customs valuation based on the transaction value’) states:

‘1.   The primary basis for the customs value of goods shall be the transaction value, that is the price actually paid or payable for the goods when sold for export to the customs territory of the Union, adjusted, where necessary.

2.   The price actually paid or payable shall be the total payment made or to be made by the buyer to the seller or by the buyer to a third party for the benefit of the seller for the imported goods and include all payments made or to be made as a condition of sale of the imported goods.

3.   The transaction value shall apply provided that all of the following conditions are fulfilled:

…

…’

6.

Article 71 (‘Elements of the transaction value’) and Article 72 (‘Elements not to be included in the customs value’) provide for the adjustments which have to be made in order to determine the customs value under Article 70. ( 3 )

7.

Article 73 (‘Simplification’) states:

‘The customs authorities may, upon application, authorise that the following amounts be determined on the basis of specific criteria, where they are not quantifiable on the date on which the customs declaration is accepted:

8.

Article 74 (‘Secondary methods of customs valuation’) states:

‘1.   Where the customs value of goods cannot be determined under Article 70, it shall be determined by proceeding sequentially from points (a) to (d) of paragraph 2, until the first point under which the customs value of goods can be determined.

…

2.   The customs value, pursuant to paragraph 1, shall be:

3.   Where the customs value cannot be determined under paragraph 1, it shall be determined on the basis of data available in the customs territory of the Union, using reasonable means consistent with the principles and general provisions of all of the following:

9.

Article 101 (‘Determination of the amount of import or export duty’) provides:

‘1.   The amount of import or export duty payable shall be determined by the customs authorities … as soon as they have the necessary information.

2.   Without prejudice to Article 48, the customs authorities may accept the amount of import or export duty payable determined by the declarant.

…’

10.

Article 166 (‘Simplified declaration’), states in paragraph 1:

‘The customs authorities may accept that a person has goods placed under a customs procedure on the basis of a simplified declaration which may omit certain of the particulars referred to in Article 162 or the supporting documents referred to in Article 163’.

11.

Article 167 (‘Supplementary declaration’) provides:

‘1.   In the case of a simplified declaration pursuant to Article 166 … the declarant shall lodge a supplementary declaration containing the particulars necessary for the customs procedure concerned at the competent customs office within a specific time limit. [ ( 6 )]

In the case of a simplified declaration pursuant to Article 166, the necessary supporting documents shall be in the declarant’s possession and at the disposal of the customs authorities within a specific time limit.

The supplementary declaration may be of a general, periodic or recapitulative nature.

…

4.   The simplified declaration referred to in Article 166 or the entry in the declarant’s records referred to in Article 182, and the supplementary declaration shall be deemed to constitute a single, indivisible instrument taking effect, respectively, on the date on which the simplified declaration is accepted in accordance with Article 172 and on the date on which the goods are entered in the declarant’s records.

…’

12.

Article 172 (‘Acceptance of a customs declaration’), paragraph 2, states:

‘The date of acceptance of the customs declaration by the customs authorities shall, except where otherwise provided, be the date to be used for the application of the provisions governing the customs procedure for which the goods are declared and for all other import or export formalities.’

13.

Article 173 (‘Amendment of a customs declaration’) stipulates:

‘1.   The declarant shall, upon application, be permitted to amend one or more of the particulars of the customs declaration after that declaration has been accepted by customs. The amendment shall not render the customs declaration applicable to goods other than those which it originally covered.

…

3.   Upon application by the declarant, within three years of the date of acceptance of the customs declaration, the amendment of the customs declaration may be permitted after release of the goods in order for the declarant to comply with his or her obligations relating to the placing of the goods under the customs procedure concerned.’

14.

In accordance with Article 85:

‘In respect of the importation of goods, the taxable amount shall be the value for customs purposes, determined in accordance with the Community provisions in force.’

15.

The account of the facts provided in the order for reference is as follows:

16.

Tauritus disagreed with the decision of the Regional Service and took its disagreement, successively, to the Muitinės departamentas prie Lietuvos Respublikos finansų ministerijos (Customs Department of the Ministry of Finance of the Republic of Lithuania), the Mokestinių ginčų komisija prie Lietuvos Respublikos Vyriausybės (Tax Disputes Commission under the Government of the Republic of Lithuania) and the Vilniaus apygardos administracinis teismas (Regional Administrative Court, Vilnius, Lithuania), which all found the calculation of the interest on arrears to be justified.

17.

Tauritus brought an appeal against the judgment of the court of first instance before the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania), which, by a judgment of 17 June 2020, sent the matter back to the customs administration for reconsideration.

18.

In the opinion of the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania), the customs authority had improperly calculated the customs value of the goods by using the method known as the ‘transaction value’ method. The application of Article 70(1) of the Customs Code could not be based on a final price which was not, nor could be, known on the dates on which the goods were imported and the initial declarations were lodged.

19.

The matter having been sent back to the customs administration, that administration, by a decision of the Customs Department of 31 December 2020, confirming the decision of the Regional Service, reiterated Tauritus’ obligation to pay the interest on arrears. According to that authority:

20.

That decision having been confirmed by the Vilniaus apygardos administracinis teismas (Regional Administrative Court, Vilnius, Lithuania) in a judgment of 19 January 2022, Tauritus brought a further appeal before the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania), which has referred the following questions to the Court of Justice for a preliminary ruling:

21.

The request for a preliminary ruling was received at the Court on 19 December 2023.

22.

Written observations were submitted by the Spanish and Lithuanian Governments, and by the European Commission.

23.

The Spanish, French and Lithuanian Governments, as well as the Commission, appeared at the hearing held on 6 November 2024.

24.

As I have already said, the purpose of the present proceedings is to establish the amount of interest on arrears which a company is required to pay following payment of import VAT.

25.

The dispute revolves around the method used to determine the customs value of the imported goods. ( 11 ) The amount of the tax liability and, consequently, the calculation of the interest on arrears payable depends on that value.

26.

In particular, Tauritus determined the customs value in accordance with the secondary method provided for in Article 74(3) of the Customs Code. That method is to be used when it is not possible to use the primary method provided for in Article 70 of that code. ( 12 ) The customs authority, conversely, proposes that the primary method should apply to the present case.

27.

The referring court emphasises that the dispute ‘concerns only the amount of the interest on arrears charged to the appellant’, an amount which, in its view, is ‘directly related to the amount of the tax arrears and the moment when the tax liability arises’. ( 13 )

28.

The referring court has not, however, referred any question to the Court regarding the temporal scope of the interest on arrears, that is to say, regarding when it begins to be chargeable. On that point, I repeat, the request for a preliminary ruling is silent, which implies leaving open the question of the start and end dates for calculating the interest, and which the questions referred do not address.

29.

With regard to the ‘amount of the tax arrears’, which is the other factor mentioned by the referring court, everything appears to indicate that Tauritus has not, as such, challenged the VAT amount ultimately charged. If that is so (something which it is for the referring court to establish), Tauritus must be deemed to have accepted, implicitly, the customs value – and, therefore, the taxable value – of the goods for the purposes of payment of the import VAT.

30.

In that context, the statement of the court a quo on which the order for reference hinges stands out for its hypothetical nature: ‘if the customs value – and, therefore, the taxable amount – were found to have been determined incorrectly, part of the interest on arrears charged could not be considered justified.’ ( 14 )

31.

If the person liable for payment does not object to the amount of the ‘tax arrears’ (in respect of VAT), established precisely on the basis of the transaction value, I cannot see what need there would be to deliberate that transaction value now, in connection with the payment of interest on arrears. ( 15 )

32.

Hence, at the hearing, certain doubts were raised regarding the usefulness of any response which the Court may give to the referring court. If its questions were to be regarded as hypothetical (not strictly necessary to resolve the original dispute), ( 16 ) the request for a preliminary ruling would be inadmissible.

33.

In any event, I shall comment on the questions referred, in case the Court should decide to undertake a substantive examination of them, based on a presumption of their relevance.

34.

The referring court requests an interpretation of Article 70 of the Customs Code. It wishes to know whether paragraph 1 of that article is applicable to a situation where ‘at the time of acceptance of the customs declaration and on the basis of the sale occurring immediately before the goods were brought into the customs territory, only the price provisionally payable is known, which is subsequently (that is to say, after the declaration has been lodged and the goods have been released for free circulation) adjusted upwards or downwards in the light of circumstances beyond the control of the parties to the transaction and unknown at the time of lodging the declaration’.

35.

The Court has already ruled on the determination of the customs value of imported goods. Its case-law contains the following statements:

36.

In view of those criteria, the primary valuation method (Article 70 of the Customs Code) should, in principle, be applied to the original dispute. Contrary to what certain intervening parties maintained at the hearing, the importer is not free to choose, at its discretion, the valuation method applicable to the goods; that view seems incorrect to me and runs counter to the assumption that there is a hierarchy between the successive valuation methods, expressly imposed by the Customs Code itself.

37.

It is my view, conversely, that the importer must apply the method which the conditions of each transaction require. It may only exclude the application of the primary method (provided for in Article 70 of the Customs Code) when the requirements established for that method are not satisfied. Only in that scenario may it use one of the secondary methods (provided for in Article 74(1) of the Customs Code), opting for the method best suited to the circumstances of the import, and, failing that, the residual method provided for in Article 74(3).

38.

According to the referring court, a number of reasons stand in the way of the (mandatory) application of the method provided for in Article 70 of the Customs Code in the present case:

39.

For the referring court, the circumstances it enumerates would lead to the application of one of the secondary (residual) valuation methods provided for in Article 74 of the Customs Code, specifically, in the present case, that set out in paragraph 3 of that article.

40.

In my opinion, taking into account the totality of the information provided to the Court, there was nothing to prevent the application of Article 70(1) of the Customs Code in the present case, for these reasons:

41.

The price declared by Tauritus was provisional, as had been agreed in the contracts for the sale of the goods. ( 22 ) Those contracts and their annexes stated that the final price would be conditional on two factors which could only be known after import, namely the average prices of the fuel on the market and the average exchange rate. ( 23 )

42.

Both factors constitute ‘conditions of sale’, for the purposes of Article 70(1) and (3)(b) of the Customs Code. As such, they contribute to the quantification of certain payments which, by virtue of the contractual relationship between the buyer and the seller, are of such importance to the latter that, if those payments were not made, the sale would not ultimately take place. ( 24 )

43.

Certainly, the amount of the payments concerned was not completely determined at the time of the customs declaration. However, the conditions for its definitive calculation meant that that amount was already, from the moment of signing the contracts, perfectly determinable. Only if that were not so should the transaction value method be excluded, pursuant to Article 70(3)(b).

44.

As the Spanish Government noted at the hearing, with the endorsement of the French Government, neither of those conditions of sale (average prices of the fuel and average exchange rate) was subject to the exclusive control of either contracting party, but rather both depended on objective circumstances of an external nature. Those circumstances could easily be verified by the customs authorities, to whom the declarant would be able to provide evidence of the price finally paid, after adding to the provisional price, or subtracting from it, the agreed adjustments, resulting from publicly disclosed factors.

45.

Contrary to what the referring court appears to maintain, ( 25 ) the considerations which led the Court to deliver the judgment in Hamamatsu Photonics Deutschland cannot, in my opinion, be extrapolated to the present case. I concur, in that assessment, with the unanimous position expressed at the hearing by the participating governments and by the Commission.

46.

The contracts concluded by Tauritus stipulated that the final sale price was subject to easily verifiable objective conditions, unlike what occurred in the judgment in Hamamatsu Photonics Deutschland. In that particular case, an undertaking purchased goods from its parent company which were invoiced at intra-group prices and the total of the amounts invoiced for the goods underwent regular verification and, where necessary, adjustment, using a method known as the ‘Residual Profit Split Method’. That method involved combining the allocation of a minimum profit with the division of a residual profit on a proportional basis and the establishment of an operating margin range which determined whether additional credits or debit charges were made. ( 26 )

47.

The conditions for determining the value of the goods in the judgment in Hamamatsu Photonics Deutschland were then notably more complicated and, in particular, more difficult for the customs authority to verify than those of the case which concerns us here. It is therefore my view that the case-law of that judgment cannot be extended to the present proceedings.

48.

In short, I maintain that the primary method set out in Article 70(1) of the Customs Code would be appropriate in circumstances such as those of the original dispute. The price actually paid or payable for the imported goods (which, as I have stated, as a general rule, constitutes the basis for calculating the customs value) could have been adjusted ex post, on the basis of easily objectifiable factors that had already been provided for in the contract of sale, in order to reflect the real economic value of those goods.

49.

The referring court is seeking an interpretation of Article 173(3) of the Customs Code. It wishes to know, in particular, whether the declarant is obliged to apply to the customs authorities to amend the customs value, determined and declared in accordance with Article 74 of that code, where ‘the price actually payable for the goods, as referred to in Article 70(1) of that [code], which was not and could not have been known at the time of lodging the declaration, becomes apparent after those goods have been released for free circulation’.

50.

The answer to the second question referred could be unnecessary, if it is confirmed that the transaction value in the present case had to be calculated using the primary method set out in Article 70 of the Customs Code.

51.

In any event, given the terms in which the second question of the referring court is posed, I shall address it in my analysis, for which it is necessary to clarify the mechanism for adjusting the final price, when its calculation depends on certain future (but easily objectifiable) factors.

52.

In that scenario, the adjustment of the final price is done by means of a process carried out in two stages: (a) that relating to the time of the declaration, when only the provisional price is known; and (b) that relating to the time at which, the remaining conditions of sale having been fulfilled, the definitive price of the released goods is established.

53.

To that end, the Customs Code provides two mechanisms:

54.

According to the mechanism provided for in Article 166 of the Customs Code, the importer initially declares the provisional price of the goods and then, at the relevant time, the definitive price, using the supplementary declaration (Article 167 of that code).

55.

Conversely, the mechanism provided for in Article 73 of the Customs Code is reserved for imports which, on the date on which the customs declaration is accepted, are only quantifiable on the basis of specific criteria set by the customs authorities.

56.

Given the facts of the dispute, it is my view that the mechanism provided for in Article 166 of the Customs Code should have been used and not that provided for in Article 73 of that code, since the two factors established in the contracts of sale for calculating the final price (average price of the fuel and average exchange rate) allowed the total amount of that price to be determinable on the date of the customs declaration. It would, therefore, have been sufficient to use the simplified declaration provided for in Article 166, in the expectation of making the supplementary declaration referred to in Article 167.

57.

In the presence of elements which, by themselves, allow the amounts determining the customs value to be quantified, there is no need to resort to the mechanism provided for in Article 73 of the Customs Code, that is to say, through the setting of other specific criteria.

58.

The mechanism provided for in Articles 166 and 167 of the Customs Code, as well as satisfying the relevant accuracy requirements (Article 15 of that code), ensures that the real economic value of the goods is determined in the end. The mechanism provided for in Article 73, on the other hand, does not allow for such accuracy, since it operates according to criteria which, even though they are specific, will never be able to yield a result as reliable as that produced by the price elements which determine, exactly, the real economic value of the imported goods.

59.

I have already set out why the secondary valuation method used by Tauritus (that provided for in Article 74(3) of the Customs Code) was not appropriate. It is a purely residual method, restricted to cases in which it is not even possible to determine the customs value according to the methods established in Article 74(1). Those methods, in turn, are only applicable if it is not possible to use the primary method provided for in Article 70 of the Customs Code, because the price of the goods (transaction value) is subject to conditions which prevent its value from being determined.

60.

If, as I propose, the conditions established in the contracts concluded between Tauritus and its suppliers allowed the final price to be determined easily and objectively, the primary method should have been used (Article 70 of the Customs Code) to discover the actual value of the transaction.

61.

I should add that the residual method provided for in Article 74(3) of the Customs Code cannot naturally, for want of a better word, be supplemented by the amendment procedure under Article 173 of that code. That is to say, the two provisions cannot be combined to form a complex procedure, in the way that Articles 166 and 167 of the Customs Code are combined.

62.

Indeed, the simplified declaration provided for in Article 166 of the Customs Code has its necessary addition in the supplementary declaration provided for in Article 167 of that code, for the purposes of making up the customs declaration in its entirety (the two ‘constitute a single, indivisible instrument’, according to Article 167(4) of the Customs Code).

63.

In the present circumstances, adhering to the text of the second question referred, Article 173 of the Customs Code, which provides for the ‘amendment of a customs declaration’, was not applicable.

64.

The amendments permitted under Article 173 of the Customs Code are not intended to supplement a prior declaration of a provisional nature, but rather to correct the content of a declaration that was lodged, at the relevant time, as a finished and complete declaration. Apart from that, it must be borne in mind that the use of amendments, because they represent an exception to the principle of the irrevocability of the customs declaration, is subject to a restrictive regime. ( 28 )

65.

To put it another way, customs declarations stating a final price that is not subject to subsequent adjustments may, where necessary, be amended (but not supplemented) under Article 173 of the Customs Code. Conversely, declarations stating a provisional price that is subject to easily verifiable subsequent adjustments are to be governed by Articles 166 and 167 of that code.

66.

If, from the start (at the time of lodging the declaration), it is known that the price of the goods is only provisional, it is not permissible to conceal that information from the customs authorities and wait until the time the final price is known, in order to make them aware of it by means of an amendment, pursuant to Article 173, of the initial declaration.

67.

In the interests of the accuracy and completeness of the information given in the initial declaration, as required by Article 15(2)(a) of the Customs Code, the appropriate course of action is to communicate that fact at the time of the initial declaration itself.

68.

Thus it is my view that, in circumstances such as those at issue, the initial declaration should take the form of a simplified declaration (Article 166 of the Customs Code), which would subsequently be supplemented in accordance with Article 167 of that code. It was not appropriate to have recourse to Article 173 of the Customs Code, in order to amend a declaration lodged in accordance with Article 74(3) of that code, with the aim of correcting information that was known to be incomplete from the start.

69.

What has been reasoned thus far, logically, does not prevent the customs authorities, as part of a tax inspection, verifying the accuracy and completeness of the information provided in customs declarations. In particular, such authorities are empowered to ascertain what the economic value of the imported goods was (the price actually paid after the relevant adjustments to the provisional price) and to deduce the appropriate consequences with a view to calculating the import VAT and interest on arrears.

70.

The second question, however, does not concern the powers of customs authorities to carry out controls.

71.

In the light of the foregoing, I propose that the Court of Justice should reply to the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania) as follows: