Brexit has given rise to a significant increase in customs representation in the EU and more particularly for non-EU established entities. Many UK companies, who no longer qualify as established in the EU, were required to appoint indirect representatives to import goods on their behalf into the EU market. Indirect representation means that the party clearing the goods and submitting the declaration is jointly liable for the content of the declaration and the customs debt arising from the import. But what about import VAT? Who will be liable?  

Some may argue that indirect representatives may be liable for import VAT under Article 201 of the EU VAT Directive 2006/112/EC which states that: “on importation, VAT shall be payable by any person or persons designated or recognised as liable by the Member Stater of importation”. Others may refer to Article 77(3) of Regulation (EU) No 952/2013 which provides that: “in the event of indirect representation, the person on whose behalf the customs declaration is made shall also be a debtor”, meaning that the indirect representative is liable not only for customs duties, but also for import VAT.

However, the ECJ has ruled differently. This decision is the result of actions brought by U.I. Srl (the applicant) against two tax assessments. The applicant had carried out a number of customs transactions on behalf of two of its clients (i.e. import companies) acting as an indirect representative and had submitted the relevant declarations in its own name and on behalf of those two companies. In the case at hand, the Venice Customs office had found in the course of tax inspections, that the ‘declarations of intent annexed to each import declaration’ were ‘unreliable’ because they were based on an allegedly mistaken assumption that the relevant export companies were established exporters. The import transactions which were the subject of the tax inspections were therefore not exempted from VAT. The Venice Customs Office had found that the import companies as well as the applicant in the main proceedings were jointly liable for the payment of VAT.

However, the ECJ sided with the applicant in this case and ruled that indirect representatives would only be liable for the payment of duties and not VAT. Coming back to Article 201 of the VAT Directive, it must be interpreted as meaning that the indirect customs representative cannot be held liable for payment of import VAT, jointly with the importer, in the absence of national provisions designating him or recognising him, explicitly and unequivocally, as being liable for that tax.

To know more, the full text can be found here.


Thomas joined Baker McKenzie as a Senior Trade Advisor in the Tax Practice Group in April 2022. He has 10+ years of experience in the field of Customs, International Trade and Implementation of Duty Optimization Programs. Thomas is a guest lecturer at the University of Antwerp (UAntwerp) and holds a US Customs Broker License.