On November 12, 2015 the Court of Justice of the European Union (CJEU) judged in Case C‑198/14 Valev Visnapuu versus Kihlakunnansyyttäjä and Suomen valtio — Tullihallitus (ECLI:EU:C:2015:751).
Article 110 TFEU and Articles 1(1), 7 and 15 of European Parliament and Council Directive 94/62/EC of 20 December 1994 on packaging and packaging waste must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, which imposes an excise duty on certain beverage packaging, but lays down an exemption for packaging integrated into a functioning return system.
The dispute in the main proceedings and the questions referred for a preliminary ruling
· EIG, a company established in Estonia and controlled by Mr Visnapuu, maintained a website (‘www.alkotaxi.eu’) through which Finnish residents could purchase various brands of alcoholic beverages of high or low alcohol strength. After those purchases were paid for, EIG organised home delivery from Estonia to Finland for some of its customers.
· EIG did not declare the importation of alcoholic beverages to the Finnish customs authorities, with the result that no excise duty was imposed. EIG also did not designate a tax representative, within the meaning of the seventh subparagraph of Paragraph 7 of the Law on Excise Duty, who could have paid the excise duty on the goods received in Finland to the Finnish customs authorities. Nor did EIG declare the goods to be dispatched or lodge a guarantee for the payment of the excise duty before the goods were sent to Finland. In addition, EIG also did not pay the excise duty on certain beverage packaging in respect of the packaging of those goods. Lastly, as regards the delivery of the alcoholic beverages to the purchaser after importation, EIG had neither a wholesale licence nor a retail sale licence for the purposes of Paragraph 8 of the Law on Alcohol.
· On the basis of the charges brought by the district prosecutor, the Helsingin käräjäoikeus (Helsinki District Court) found that it was clear that the activities of EIG between 24 June and 18 August 2009 had led to the non-imposition of excise duty on 4 507.30 litres of beer, 1 499.40 litres of cider, 238.70 litres of wine and 3 450.30 litres of spirits imported into Finland. Thus, in total, excise duty on alcoholic beverages amounting to EUR 23 144.89 and excise duty on certain beverage packaging amounting to EUR 5 233.52 was evaded, for a total amount of EUR 28 378.40.
· The Helsingin käräjäoikeus (Helsinki District Court) also found that Mr Visnapuu had transported the abovementioned volumes of alcoholic beverages from Estonia to Finland and sold them in Finland. On that basis, it imposed an eight-month suspended sentence on Mr Visnapuu for aggravated tax fraud and infringement of the Law on Alcohol. Mr Visnapuu was also ordered to pay EUR 28 378.40 to the Finnish State for the unpaid taxes, along with interest and costs.
· In the context of his appeal before the referring court, Mr Visnapuu claimed, first, that the charges against him should be dropped and the decision ordering him to pay damages annulled and, secondly, that his costs, plus interest, should be reimbursed. In the alternative, he claimed that the referring court should make a request for a preliminary ruling to the Court of Justice.
· The referring court states that the sequence of events is not in dispute on appeal. Finnish customers ordered alcoholic beverages from EIG via its website and Mr Visnapuu, as EIG’s representative, delivered those beverages to some customers by importing the beverages to Finland from Estonia, even though he did not have a licence in accordance with Paragraph 8(1) of the Law on Alcohol. EIG, which had not set up a scheme for the recycling or reuse of packaging or joined such a scheme, did not make a customs declaration to the customs authorities when those alcoholic beverages were imported, with the result that no excise duty was imposed. Nor is it disputed before the referring court that Mr Visnapuu imported the quantities of alcoholic beverages found by the Helsingin käräjäoikeus (Helsinki District Court) and failed to pay the amounts of taxes stated in the judgment delivered by that court.
· The referring court considers that the application of the national legislation in the main proceedings raises several questions of EU law concerning the legislation relating to the excise duty on certain beverage packaging and the requirement to have a retail sale licence in order to import alcoholic beverages with a view to their retail sale in Finland.
· In those circumstances, the Helsingin hovioikeus (Helsinki Court of Appeal), decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
1. Is the permissibility of the Finnish system of beverage packaging duty, under which beverage packaging duty is levied if the packaging is not part of a return system, to be examined in the light of Article 110 TFEU instead of Article 34 TFEU? The return system in question must be a deposit-based system under which the packer of the alcoholic beverages or the importer alone or in accordance with the provisions laid down in the Law on Waste or in the corresponding legislation of the Åland Islands [Finland] takes care of the reuse or recycling of beverage packagings so that the packaging is refilled or recovered as raw material.
2. If the answer to Question 1 is affirmative, is that system compatible with Articles 1(1), 7 and 15 of Directive 94/62/EC when examined in combination with Article 110 TFEU?
3. If the answer to Question 1 is negative, is that system compatible with Articles 1(1), 7 and 15 of Directive 94/62/EC when examined in combination with Article 34 TFEU?
4. If the answer to Question 3 is negative, is the Finnish beverage packaging duty system to be regarded as authorised on the basis of Article 36 TFEU?
5. May the requirement that a person using alcoholic beverages for commercial or other business purposes needs a separate retail sale licence for his activity relating to imported alcoholic beverages, in a situation in which a Finnish buyer has purchased via the internet or another method of distance selling from a vendor in another Member State alcoholic beverages which the vendor transports to Finland, be regarded as concerning the existence of a monopoly or as part of the operation of a monopoly, so that the provisions of Article 34 TFEU are not therefore an impediment to it, but it is to be evaluated in the light of Article 37 TFEU?
6. If the answer to Question 5 is affirmative, is that licence requirement in such a case compatible with the conditions laid down for State monopolies of a commercial character in Article 37 TFEU?
7. If the answer to Question 5 is negative and Article 34 TFEU is applicable to the case, is the Finnish system, under which, where alcoholic beverages are ordered from abroad via the internet or another means of distance selling, their import for personal consumption is permitted only if the person ordering the goods or a person unconnected to the vendor transported the alcoholic beverages into Finland, and under which a licence in accordance with the Law on Alcohol is otherwise required for the import, a quantitative restriction on imports or a measure having equivalent effect contrary to Article 34 TFEU?
8. If the answer to the preceding question is affirmative, can the system be considered justified and proportionate in order to protect the health and life of humans?
The CJEU ruled as follows:
1. Article 110 TFEU and Articles 1(1), 7 and 15 of European Parliament and Council Directive 94/62/EC of 20 December 1994 on packaging and packaging waste must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, which imposes an excise duty on certain beverage packaging, but lays down an exemption for packaging integrated into a functioning return system.
2. Articles 34 TFEU and 36 TFEU must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, under which a seller established in another Member State must hold a retail sale licence in order to import alcoholic beverages with a view to their retail sale to consumers residing in the first Member State, where that seller, or someone acting on his behalf, transports those beverages, provided that that legislation is appropriate for securing the attainment of the objective pursued, in the present case the protection of health and public policy, that the objective in question could not be achieved with at least an equivalent level of effectiveness by less restrictive methods and that the legislation does not constitute a means of arbitrary discrimination or a disguised restriction on trade between the Member States, which it is for the referring court to verify.
For further information click here to be forwarded to the text of the ruling as published on the website of the CJEU, which will open in a new window.
Did you know that in our section CJEU Rulings we have made a selection of rulings of the CJEU? We have organized these rulings based on the subject they relate to (e.g. Freedom of establishment, Free movement of capital, Indirect taxes on the raising of capital, etc).
Copyright – internationaltaxplaza.info
Stay informed: Subscribe to International Tax Plaza’s Newsletter! It’s completely FREE OF CHARGE!
and
Follow International Tax Plaza on Twitter (@IntTaxPlaza)
