The Commission annulled the decisions of the Customs Department on the application of joint and several liability
The Commission decided to uphold the taxpayer's (the applicant) and annulled the decisions of the Customs Department under the Ministry of Finance of the Republic of Lithuania (hereinafter referred to as the Customs Department) whereby the applicant was not exempted from paying the calculated import value added tax (hereinafter referred to as VAT) late payment interest. The Commission found that the Customs Department had incorrectly applied the principles of joint and several liability and had unjustifiably imposed on the applicant the obligation to pay late payment interest on import VAT paid by another company (the importer).
The essence of the dispute. The applicant, acting as an indirect customs agent, submitted several import declarations on behalf of the company (importer). After customs verification, the territorial customs office found that the declarations contained an incorrect currency, so the import duties were recalculated and the VAT underpayment and late payment interest were calculated. The territorial customs office, based on the rules of joint and several liability, attributed the obligation to pay late payment interest to both the company (importer) and the applicant (declarant). It should be noted that the import VAT was covered by the company's funds. At the same time, the company had overpaid taxes, so no penalties were calculated for the company.
During the tax dispute, the applicant stated that she was not an importer and therefore could not be considered a joint and several debtor for import VAT. The applicant also stated that the Customs Department had misinterpreted the provisions of the Union Customs Code on indirect representation and had therefore unjustifiably extended the joint and several liability. In the applicant's opinion, after paying the VAT arrears, the interest was calculated unjustifiably, as no damage was caused to the budget.
After examining these tax disputes, the Commission, in accordance with Article 77(3) of the Union Customs Code, Article 2(25) and Article 94 of the Value Added Tax Law (VATL), Article 6.6(6) of the Civil Code, and the case law of the Court of Justice of the European Union (C-714/20, C-204/09, C-611/17, etc.), the Supreme Administrative Court of Lithuania (LVAT) in its ruling of 4 November 2025 in administrative case No. eA-1266-442/2025, stated that the importer is the only person liable to pay import VAT; an indirect representative cannot be considered a joint and several debtor unless this is clearly and unambiguously established in national law; the customs authorities did not provide evidence that the applicant had assumed the functions or responsibilities of an importer.
In addition, Commission member Jurgita Narkevičiūtė noted that joint and several liability cannot be applied automatically. The grounds for the Supreme Administrative Court's ruling of 4 November 2025 once again confirmed the practice established by the ECJ that the liability of taxpayers must be clearly established by law. This means that customs authorities are restricted in their practice of recognizing declarants as import VAT debtors solely on the basis of their declaration actions. In the context of these disputes, it is also important that in the absence of an obligation to perform the primary obligation (to pay import VAT), there can be no obligation to perform the secondary obligations derived from the primary obligation.