On April 27, 2016 the Court of Justice of the European Union (CJEU) judged in Case C‑528/14 X versus Staatssecretaris van Financiën, (ECLI:EU:C:2016:304).

This request for a preliminary ruling concerns the interpretation of Article 3 of Council Regulation (EC) No 1186/2009 of 16 November 2009 setting up a Community system of reliefs from customs duty (OJ 2009 L 324, p. 23).

 

Does Regulation No 1186/2009 include the possibility that a natural person has at the same time his normal place of residence in both a Member State and a third country and, if so, does the relief from import duties provided for in Article 3 of the regulation apply to personal property, which, when a person ceases to have his normal place of residence in the third country, is transferred to the European Union?

If Regulation No 1186/2009 precludes two normal places of residence and an assessment of all the circumstances does not suffice to determine the normal place of residence, on the basis of which rule or which criteria is it necessary to determine, for the purposes of the application of that regulation, in which country the person concerned has his normal place of residence in a case such as the present case in which that person has both personal and occupational ties in the third country and personal ties in the Member State?

 

The request has been made in proceedings between X and the Staatssecretaris van Financiën (State Secretary for Finance) concerning the latter’s refusal to allow X’s personal property to be transferred from Qatar to the Netherlands free of import duties.

 

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

·        Until 1 March 2008, the applicant in the main proceedings (‘the applicant’) resided and worked in the Netherlands. From 1 March 2008 until 1 August 2011, he worked in Qatar, where accommodation was made available to him by his employer. The applicant had both occupational and personal ties with that third country. His wife continued to live and work in the Netherlands. She visited him six times, the total duration of her visits being 83 days. During the period in question, the applicant spent 281 days outside Qatar, during which he visited his wife, his adult children and his family in the Netherlands and went on holiday in other States.

 

·        With a view to his return to the Netherlands, the applicant requested authorisation to import his personal property into the European Union from Qatar free of import duties, pursuant to Article 3 of Regulation No 1186/2009. That request was refused by decision of the Inspector of Taxes on the ground that there was no transfer of the normal place of residence to the Netherlands within the meaning of that article. He was deemed to have maintained his normal place of residence in that Member State throughout his stay in Qatar, so that that third country had never been his normal place of residence.

 

·        The applicant brought an action challenging that decision before the Rechtbank te Haarlem (District Court, Harlem), which upheld the action. The Inspector of Taxes appealed against that court’s decision before the Gerechtshof Amsterdam (Appeal Court, Amsterdam). The latter court observed that, according to the case-law of the Court of Justice, the normal place of residence is the place where the person concerned has the permanent centre of his interests. It went on to state that, having regard to the applicant’s personal and occupational ties, it was not possible to determine where the permanent centre of his interests was. In those circumstances, according to that court, primacy should be given to personal ties, with the result that, during the period concerned, the applicant’s normal place of residence was the Netherlands, not Qatar.

 

·        The applicant lodged an appeal in cassation before the referring court. After noting that Regulation No 1186/2009 did not provide a definition of ‘normal residence’, that court observed that the approach adopted by the Gerechtshof Amsterdam (Appeal Court, Amsterdam) raised the issue of whether, during the period concerned, the applicant had a normal place of residence in both the Netherlands and Qatar. It stated that the objectives of that regulation do not appear to preclude, in circumstances such as those under consideration here, either the existence of a normal place of residence in both the Netherlands and Qatar or the application of the relief from import duties provided for in Article 3 of the regulation, as the applicant gave up his place of residence in Qatar and transferred his personal property to the Netherlands.

 

·        In the event that Regulation No 1186/2009 is to be interpreted as precluding the possibility of a dual place of normal residence, the referring court seeks to ascertain the criteria to be taken into account, in circumstances such as those in the main proceedings, in determining which of the two places of residence is to be regarded as the normal place of residence for the purposes of the application of that regulation. In that regard, the referring court asks whether the criteria established by the Court in the judgments in Louloudakis (C‑262/99, EU:C:2001:407) and Alevizos (C‑392/05, EU:C:2007:251) are relevant for the purpose of determining the ‘normal place of residence’ within the meaning of Article 7(1) of Directive 83/182 and Article 6(1) of Directive 83/183, in particular the primacy to be given to personal ties in that determination.

 

·        In those circumstances, the Hoge Raad der Nederlanden (Supreme Court, Netherlands) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling: 

(1)     Does Regulation No 1186/2009 include the possibility that a natural person has at the same time his normal place of residence in both a Member State and a third country and, if so, does the relief from import duties provided for in Article 3 of the regulation apply to personal property, which, when a person ceases to have his normal place of residence in the third country, is transferred to the European Union?

(2)     If Regulation No 1186/2009 precludes two normal places of residence and an assessment of all the circumstances does not suffice to determine the normal place of residence, on the basis of which rule or which criteria is it necessary to determine, for the purposes of the application of that regulation, in which country the person concerned has his normal place of residence in a case such as the present case in which that person has both personal and occupational ties in the third country and personal ties in the Member State?

 

The CJEU judged as follows:

1.     Article 3 of Council Regulation (EC) No 1186/2009 of 16 November 2009 setting up a Community system of reliefs from customs duty is to be interpreted as meaning that, for the purposes of the application of that provision, a natural person may not have at the same time a normal place of residence in both a Member State and in a third country.

 

2.     In circumstances such as those in the main proceedings, where the person concerned has both personal and occupational ties in a third country and personal ties in a Member State, it is necessary, for the purpose of determining whether the normal place of residence of that person within the meaning of Article 3 of Regulation No 1186/2009 is in the third country, to attach particular importance to the length of that person’s stay in the third country when carrying out an overall assessment of the relevant facts.

 

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

 

Did you know that in our section CJEU Rulings we have made a selection of rulings of the CJEU? We have organized these rulings based on the subject they relate to (e.g. Freedom of establishment, Free movement of capital, Indirect taxes on the raising of capital, etc).

 

 

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