Hamamatsu Photonics Deutschland GmbHConsumer Products
Case C-529/16 – European Court of Justice
Hamamatsu Photonics Deutschland GmbH (“Hamamatsu”) v Hauptzollamt München (“Main Customs Office Munich”)
The case concerns the interpretation of articles 28-31 of the Customs Code, as a result of the dispute between Hamamatsu and the Main Customs Office in Munich, Germany, following the latter’s refusal to proceed with the partial reimbursement of customs duties declared and paid by Hamamatsu following the purchase of goods imported from the parent company in Japan, invoiced at domestic group prices. The invoiced amounts were checked on the basis of the “residual profit sharing” method on a regular basis and, if necessary, corrected to ensure that the sales prices were in line with the arm’s length conditions provided for by the OECD principles.
Between October 2009 and September 2010, Hamamatsu’s operating margin was below the established target range and transfer prices were adjusted accordingly, with Hamamatsu receiving a credit in the amount of 3,858,345.46 euros.
Hamamatsu requested the reimbursement of customs duties for the imported goods, for the amount of 42,942.14 euros, a request that was rejected on the grounds that the method adopted was incompatible with art. 29 para. (1) of the Customs Code. Hamamatsu declared an appeal, and the Munich Financial Court considers that the annual final account constitutes the final transfer price, established in accordance with the conditions of full competition provided by the OECD principles and thus, the price declared to the customs authorities would only constitute a fictitious price, and not a price “to be paid” for the imported goods, under Art. 29 of the Customs Code.
According to a consistent jurisprudence of the Court, customs valuation aims to establish a fair, uniform and neutral system which excludes the use of arbitrary or fictitious customs values. Therefore, the customs value must reflect the real economic value of some imported goods and take into account all the elements of these goods that have an economic value.
Therefore, the customs value of the imported goods is represented by their transaction value, i.e. the actual price paid or payable for the goods when they are sold for export in the customs territory of the Union, subject to the adjustments to be made in accordance with articles 32 and 33 of the Customs Code. However, it must be remembered that the situations in which the Court admitted a subsequent adjustment of the transaction value are limited, among others, to specific situations related in particular to the lack of quality of the product or to defects detected after its release into free circulation.
Accordingly, the Court stated that articles 28-31 of the Customs Code must be interpreted in the sense that they do not allow to retain, as customs value, an agreed transaction value, composed in part of an amount initially invoiced and declared and in part from a flat-rate adjustment after the end of the billing period, without it being possible to know whether, at the end of the billing period, this adjustment will be operated upwards or downwards.