(February 12, 2015) 

On February 12, 2015 the European Court of Justice (CJEU) ruled in Cases C-349/13; Minister Finansów versus Oil Trading Poland sp. z o.o. (ECLI:EU:C:2015:84).

 

Must Article 3(3) of Directive 92/12 — now corresponding to the first subparagraph, point (a), and the second subparagraph of Article 1(3) of Directive 2008/118 — be interpreted as not precluding a Member State from imposing excise duty on lubricating oils falling within CN codes 2710 19 71 to 2710 19 99 used for purposes other than as motor fuels or heating fuels, in accordance with the rules of the harmonised excise duty arrangements, levied on the consumption of energy products?

 

The dispute in the main proceedings and the question referred for a preliminary ruling 

·       Oil Trading Poland’s (OTP) activity involves selling lubricating oils falling within CN codes 2710 19 71 to 2710 19 99 of the combined nomenclature, used for purposes other than as motor fuels or as heating fuels. OTP purchases those lubricating oils in intra-Community transactions and resells them in Poland.

 

·       On 10 April 2009, OTP submitted a request for interpretation of Polish tax law, in relation, in particular, to whether those lubricating oils were subject to excise duty. In his written interpretation of 23 April 2010, the director of the Bydgoszcz Tax Chamber, acting on behalf of the Minister, answered that question in the affirmative.

 

·       Ruling on an action brought against that interpretation, the Wojewódzki Sąd Administracyjny w Szczecinie (Regional Administrative Court, Szczecin) took the view that lubricating oils used for purposes other than as motor fuels or as heating fuels were not subject to harmonised European Union excise duty arrangements and that the provisions of Polish law subjecting them to excise duty should not be applied.

 

·       The Minister appealed on a point of law against that decision to the Naczelny Sąd Administracyjny (Supreme Administrative Court); that court observes that it follows from the judgment in Fendt Italiana (C‑145/06 and C‑146/06, EU:C:2007:411) that lubricating oils which are not subject to harmonised excise duty are products other than those referred to in the first indent of Article 3(1) of Directive 92/12, so that, in accordance with the first subparagraph of Article 3(3) of that directive, Member States retain the right to introduce or maintain taxes levied on those products, provided that those taxes do not give rise to border-crossing formalities.

 

·       Nevertheless, the referring court is of the view that that judgment does not provide any answer to whether a tax on the consumption of such lubricating oils may be levied in accordance with the harmonised excise duty arrangements, that is, by subjecting those products, when undergoing an intra-Community acquisition, to the same obligations and formalities as those imposed on products to which those arrangements apply.

 

·       In that regard, the referring court states that lubricating oils used for purposes other than as motor fuels or as heating fuels and originating from another Member State may be acquired under two arrangements in Poland. First, under Article 40(6) of the Law on excise duty, they may be subject to the duty suspension arrangement, which requires compliance with strict administrative formalities such as, inter alia, the granting of registered consignee status and product warehousing. According to the referring court, the opening and operation of a tax warehouse entails obligations involving significant costs; in practice, it is often impossible for smaller undertakings making intra-Community purchases of lubricating oils to perform such obligations, and the use of tax warehouse services provided by another operator also involves additional costs. Those undertakings are therefore at a disadvantage compared to ones operating in the domestic lubricating oils market.

 

·       Secondly, in accordance with Article 78(3) of the Law on excise duty, during an intra-Community acquisition of those products under the excise payment procedure, they are subject to the obligations set out in Article 78(1) of that law. Referring to the judgments in Brzeziński (C‑313/05, EU:C:2007:33) and Kalinchev (C‑2/09, EU:C:2010:312), the referring court questions whether the obligations of declaring the intra-Community purchase and guaranteeing payment of the excise duty before import are to be regarded as formalities connected with the crossing of frontiers for the purposes of Article 3(3) of Directive 92/12 and the second subparagraph of Article 1(3) of Directive 2008/118. It has doubts as to whether it should be considered that those obligations aim to ensure payment of the excise duty, in so far as that aim may be achieved through compliance with other obligations laid down in Article 78(1) of the Law on excise duty, namely the obligations of submitting a simplified declaration, calculating the excise duty and paying it within 10 days from when the tax obligation arose and of maintaining records of intra-Community acquisitions of excise goods.

 

·       The referring court also notes that, pursuant to Articles 21(1)(2) and 78(1)(3) of the Law on excise duty, the deadlines for paying the excise duty differ according to whether the lubricating oils are acquired on the domestic market or are subject to an intra-Community acquisition under the excise payment procedure; such a difference may be contrary to Article 110 TFEU.

 

·       In those circumstances, the Naczelny Sąd Administracyjny decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:

‘Must Article 3(3) of Directive 92/12 — now corresponding to the first subparagraph, point (a), and the second subparagraph of Article 1(3) of Directive 2008/118 — be interpreted as not precluding a Member State from imposing excise duty on lubricating oils falling within CN codes 2710 19 71 to 2710 19 99 used for purposes other than as motor fuels or heating fuels, in accordance with the rules of the harmonised excise duty arrangements, levied on the consumption of energy products?’

 

The CJEU ruled as follows:

Article 3(3) of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products and Article 1(3) of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12 must be interpreted as not precluding products which do not fall within the scope of those directives, such as lubricating oils used for purposes other than as motor fuels or as heating fuels, from being made subject to a tax governed by rules identical to those relating to the harmonised excise duty arrangements set out in those directives, where the imposition of such a tax on those products does not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.

 

For further information click here to be forwarded to the text of the ruling as published on the website of the Court of Justice, which will open in a new window.

 

 

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