In its most recent decisions (judgments of 23.04.2014 – VII R 1/13 and VII R 2/13), the Federal Fiscal Court (BFH) commented on the assessment basis for the customs value of goods that are acquired after being brought into the customs territory of the European Union (EU) but before being released for free circulation. According to the BFH, the customs value and thus the basis for the calculation of import duties are the FOB price of the last third country seller plus the actual transport and insurance costs.
In the BFH lawsuit, the complaining European company had acquired chicken parts from another European company, which in turn had purchased the goods from a Brazilian exporter. Although this product was already in the customs territory of the EU at the time of sale, it had not yet been released for free circulation and was therefore considered to be goods from a third country. This situation can always occur when goods are purchased which are in temporary storage, in a customs warehouse or transit procedure or which have been assigned another customs-approved treatment or use. At the time of release for free circulation, the plaintiff declared the sales price of the company established in the EU as the customs value. After a customs check, however, the responsible main customs office (HZA) took the view that the sales price of the last third country company, i.e. the Brazilian exporter, was decisive and demanded further import duties by way of subsequent collection. Both the First-Instance Finance Court (FG) and the Federal Fiscal Court upheld the HZA. The customs value of goods is generally determined by the CIF price of the goods paid to enter the customs territory of the Union. If the purchase contract has been concluded on a FOB basis, transport and insurance costs actually paid must be added to the purchase price.
Every entrepreneur should take this decision of the Federal Fiscal Court to heart. Incorrect information in a customs declaration can not only lead to considerable subsequent collection of import duties after a customs inspection. For example, the status of Authorised Economic Representative (AEO) may also be withdrawn. Finally, fines and criminal investigations may be imminent.
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