Who is liable to pay VAT upon imports – the declarant, or the goods‘ owner?
The Supreme Administrative Court (SAC) held that the customs declarant, i.e. the ‘regime holder’ is liable to pay tax upon the import of goods from a non-EU country. In the court’s opinion, by lodging the customs declaration, such an entity expresses their will for the goods to be released to a certain customs regime, therefore knowingly undertaking to meet the related obligations.
In the case in question (2 Afs 133/2018 – 38), WNE-CZ, s.r.o. importing goods from China was stated as the customs declarant and goods recipient in the single administrative document (SAD), and the goods were cleared for free circulation on its behalf. However, some of the goods were imported for WEBERA, s.r.o. On this part of the imported goods, WNE-CZ, s.r.o. did not pay any tax on import, stating that the goods were not intended for its economic activity, and, moreover, were owned by WEBERA, s.r.o.
The SAC first stated that the wording of neither the VAT Act nor of the VAT Directive directly defines who is to be the person on whose behalf the goods are released to a customs regime of free circulation upon import. The court, however, also held that the Czech legislators had identified the person on whose behalf the goods were released for free circulation as the person liable to pay VAT upon the import of the goods so released. It further follows from the VAT Act together with the Customs Code that the person on whose behalf the goods are released to a certain customs regime should be the declarant, since by lodging a customs declaration they express their will for the goods to be released to a certain customs regime, therefore knowingly undertaking to meet the related obligations (such as payment of customs duties).
Finally, the SAC held that the ownership of the goods being imported is irrelevant for determining the taxable person for the purposes of the VAT Act.