EU Taxation and Customs

Under EU law, taxes and customs cover two closely related areas that are central to how the European Union regulates the economy, supports the internal market, and manages its external borders:

1. Customs under EU law

The Customs Union was established by the Treaty on the Functioning of the European Union (TFEU). Thereby, all goods can move freely between EU Member States without customs duties or border checks. The EU applies a Common Customs Tariff to goods imported from outside the EU, applying the same duties and rules regardless of the point of entry.

The Union Customs Code governs customs procedures like declarations, clearance, special procedures, and penalties. It focuses on facilitating trade while ensuring security, compliance, and the protection of the EU's financial interests. Customs authorities are national bodies in each Member State, but they apply EU customs law uniformly.

2. Taxes under EU law

The EU itself does not impose direct taxes (such as income tax or corporate tax), but it heavily regulates aspects of indirect taxation to ensure the functioning of the internal market.

Key areas are:

• Value Added Tax (VAT) harmonizing rules across the EU to prevent trade distortions.
• Excise duties, which are special taxes on specific goods such as alcohol, tobacco, and energy products, harmonizing rules to ensure fair competition and prevent double taxation.
• Customs duties, technically a tax collected at the external border on imports.
• Environmental taxes and digital taxes that, while not fully harmonized yet, are emerging areas the EU is pushing forward through initiatives like the Carbon Border Adjustment Mechanism and proposals for a digital levy.
• Tax coordination and cooperation including Initiatives against tax avoidance and evasion and corporate taxation frameworks to ensure a fairer, more transparent system.

In today's interconnected European economy, navigating the complex landscape of EU taxation and customs law is essential for businesses engaged in cross-border trade. Our EU Taxation and Customs practice offers expert advice and representation to companies, financial institutions, and individuals operating across the European Union and beyond.

We assist clients in a wide range of matters, including:

• Handling disputes and litigation relating to customs decisions and duty recovery at both national and EU levels.
• Supporting clients in navigating EU tax cooperation rules, including anti-avoidance, transfer pricing, and exchange of information frameworks.
• Advising on EU initiatives such as the Carbon Border Adjustment Mechanism (CBAM) and digital taxation proposals.
• Assisting with investigations, audits, and enforcement actions by national customs and tax authorities.
• Representing clients before Member State courts and the Court of Justice of the European Union (CJEU) in tax and customs cases.

You are welcome to contact us here if you would like to learn more what we can do for you.