01 September 2023

CLECAT calls for a fair level playing field for Austrian Freight Forwarders representing importers from other Member States

CLECAT, the European Freight Forwarders’ Association, has issued today a letter to the European Commission urging the Commission to take action against Austria to end rules and practices infringing provisions of EU customs and VAT law which jeopardize a level playing field in the internal market. These practices are unfairly impacting Austrian freight forwarders representing EU established importers which are not VAT-registered in Austria.

In a letter to the European Commission issued last year CLECAT argued that the European Commission should urge Austria to make it possible for freight forwarders to act as direct representatives when representing EU established importers so that the representative, in principle, does not bear the financial liability for import duties and VAT himself. This is normal practice in any other Member State in the EU. 

This is not the case in Austria when the importer is established in another Member State but not registered for VAT in Austria. Austrian freight forwarders can lodge customs declarations (and request VAT exemptions provided for importers) only when they place themselves in the position of the importer by acting as the importer’s indirect representative. They are charged with import duties and VAT; however, they are denied the right to deduct the VAT.

CLECAT argues that there is no legal basis in the UCC for such limitations to the possibility of direct representation. On the contrary, Article 18(1) UCC allows for a choice between direct and indirect representation when the person represented is established in the customs territory of the EU (Art. 170(2) UCC lays down the requirement that the declarant must be established in the EU).

As customs representatives in Austria declaring goods under CP42 have no possibility to act as direct representative when they are representing a person established in another Member State, if that person is not VAT registered in Austria, their fiscal liability is always at stake when they lodge such declarations. In the case of direct representation, they would only be liable if they have provided wrong information and knew or ought reasonably have known.

Furthermore, customs representatives in Austria are at a competitive disadvantage compared to  customs representatives carrying out their business in other Member States which distorts the level playing field for the profession in the EU.

CLECAT would like to emphasise that it is necessary to ensure that the legal provisions governing customs representation are subject to correct, uniform, and effective implementation across all Member States to achieve the goals and benefits of the UCC as originally envisaged. Diverging interpretation and application of the customs legal framework and procedures distort the competitiveness of businesses in the Single Market and their right to equal treatment. Furthermore, unlawful, and misaligned practices among Member States’ customs authorities create major difficulties in the practical implementation of the customs rules.

The preliminary conclusion the European Commission (DG TAXUD) is that the declarant's right to choose between direct and indirect representation is restricted by Austria's practice in an acceptable manner as importers must have a VAT identification number in Austria if they want to benefit from the VAT exemption on imports based on Art. 143(1)(d) VAT Directive. CLECAT has asked to Commission to review CLECAT’s legal advice – as outlined in the letter with this press release – and to seek clarification from the Commission’s Legal Service.