Physical departure from the suspension arrangement of the products subject to excise duties is required to exist a release for consumption. Judgment of the ECJ of June 2nd, 2016. Polihim


The Court of Justice of the European Union (CJEU) has ruled about the moment that the excise duty levies the exit of goods by an authorized warehousekeeper who manages a tax warehouse, which sells primarily to an intermediary and the latter to the final consumer who is exempt of excise duty by the national legislation, being the goods delivered directly to the final consumer by the authorized warehousekeeper.

In the main proceedings it is disputed whether with the first delivery that is carried out by the authorized warehousekeeper to an intermediary that does not meet the conditions to be exempt from excise duty nor has the purpose of aiming the goods for an exempt provision according to the EU Directive, but of reselling them, becomes due the excise duty on energy products (fuel oil) even when goods have not left the tax warehouse when delivered.

The local tax authorities (Bulgaria) considered that the release for consumption of fuel oil had been made in favor of the intermediary and the excise duty should be accrued since the purchaser had not the status of exempt consumer, while the authorized warehousekeeper criterion was based on the release for consumption carried out with the intention to allocate finally the goods for the production of electrical energy which meant an exempt transaction, even if there is a first sale to an intermediary, as far as the goods are put directly at disposal of the final consumer.

Based on these facts is questioned to the Court if it has to be understood that the products are consumed by the direct purchaser, which are not used in any production process, or are consumed by the third party that is given such use. In other words, if the sale of a product subject to excise duty within the tax warehouse, without this physically leaving that deposit, constitutes a release for consumption.

The Court, as it has reiterated on numerous occasions, mentions that besides attending the tenor of the ruling also should be considered the context and the objectives pursued by it. First, it analyzes the term “release for consumption” as defined in the European Directive on excise duties: “the departure of excise goods, including irregular departure, from a duty suspension arrangement“, which takes you to establish the physical departure of products and not its sale as the determining fact of release for consumption.

Secondly, given that excise duties levy on specific consumption and not with the selling, the time of accrual should be closer to the consumption, so as long as they remain in the tax warehouse there can be no consumption even though they have sold. Finally, the term “irregular departure” reinforces the interpretation that the release for consumption takes place at the time of the physical leaving.

Attached is a copy of the judgment with Case-Law number C-355/14.

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ECJ Excise duties 355 14

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