ECJ ruling: VAT despite formal errors? What companies need to know now
- Patricia Lederer
- Jun 30
- 2 min read
Reimporting goods – no tax exemption for minor formal errors? The European Court of Justice (ECJ) has provided clarity with a recent ruling. This is in favor of companies.
Frankfurt am Main
June 30, 2025
The case:
Horses, customs duties and a forgotten registration
A Swedish businesswoman exported two competition horses to Norway and failed to properly declare them to customs upon their return to the EU (Sweden). She was stopped by customs authorities shortly thereafter and promptly faced a VAT demand equivalent to approximately €3,750.
Reason: While reimportation is generally possible tax-free, it is only possible if the animals are properly registered and presented to customs. These formal requirements were not met.
The question: Formal error = tax liability?
The case ended up before the Supreme Administrative Court in Sweden, which referred the matter to the European Court of Justice. Specifically, the issue was the interpretation of:
Article 143(1)(e) of the VAT Directive 2006/112/EC
Article 86(6) and Article 203 of the EU Customs Code Regulation (EU) No 952/2013
The key question: Does the tax exemption on re-importation cease to apply simply because formal obligations (e.g. presentation, registration) were not complied with – even though all material requirements were met?
The verdict: Formal errors ≠ tax liability (mostly)
In its judgment of 12 June 2025, case number C-125/24 , the ECJ clarifies:
As long as there is no attempt at deception , tax exemption may not be refused solely on the grounds of formal errors.
The reasoning: The EU legislature wants to protect the "good faith" of entrepreneurs – and not penalize every forgotten customs declaration with full import duties. A negligent formal error is not sufficient to overturn the tax exemption.
The consequences: More legal certainty – but with limits
What does this mean for companies in Germany?
Good news : Anyone who makes a formal error when reimporting goods (e.g. forgets to present the goods) does not automatically have to pay import VAT – unless there is an attempt at fraud.
But be careful : The ECJ also makes it clear that customs authorities may refuse tax exemption in cases of fraud or deception .
Our conclusion at TaxPro:
The ECJ ruling clearly shows: Customs and tax authorities may not impose excessive or disproportionate requirements regarding VAT . Formal regulations are important – but not everything. The decisive factor remains whether the requirements are met in substance.
If authorities nevertheless attempt to derive a tax claim based on a mere formal error, TaxPro is the right place for you. Our firm consistently and expertly enforces your rights – before the tax office, customs authorities, and in court.
