Updated: Sep 9, 2022
NEWSLETTER 2022 - 03
BASIS OF ASSESSMENT FOR IMPORT TAX
In a ruling dated December 23, 2021 (2C 372/2021), the Federal Supreme Court (FSC) had to decide on the basis on which the automobile tax and the import tax were to be assessed when an importer initially imports an automobile into Switzerland under the temporary admission procedure and subsequently releases it for free circulation. As the tax value for the definitive importation, the complainant, A AG, which in addition to operating a car garage also trades in new and used automobiles, always stated the same value as before in the temporary admission procedure, namely the amount according to the invoice of the foreign supplier.
The reason for this procedure was that, allegedly, at the time of the definitive importation, there was still no purchase contract for the vehicle. However, since the vehicle was redeemed on the same day to a private individual in Switzerland, the facts of the case were examined in more detail by the Zurich Customs Inspectorate.
While the lower instance was of the opinion that the assessment of the automobile tax and the import tax should be based on the respective purchase price that the complainant had agreed with its domestic customer, the complainant took the legal view that the purchase price that it had paid to its foreign suppliers was decisive.
What does an importer of automobiles have to consider?
The basis of assessment for the automobile tax, which is levied on the import of automobiles, is what the manufacturer or producer, or a third party in their place, receives in return for the delivery. In assessing the import tax, the consideration paid or payable by the importer is decisive if the goods are imported in fulfillment of a sale or commission transaction. Automobile and import tax are calculated according to the circumstances at the time of transfer of the automobile from the temporary admission procedure to free circulation. The subjective taxpayer for both taxes involved here is the person who is a debtor under customs law; the debtors under customs law are the persons who bring the goods or have them brought across the customs border, as well as those on whose account the goods are imported or exported.
The complainant initially brought the automobiles into the customs territory under the temporary admission procedure and thus "executed" the purchase contract with the foreign supplier also in the VAT sense. The temporary admission procedure is used by car dealers such as the complainant to enable the complainant's customers to inspect the automobiles at its premises and, if necessary, to accompany them on a test drive. Even in the case of a definitive import without already having a purchase contract with the customer, the automobile and import taxes may not be assessed according to the remuneration paid to the foreign supplier, but always according to the circumstances at the time of the release of the automobiles for free circulation, according to the Federal Supreme Court (FSC). The purpose of the importation was thus not the fulfillment of the contract between the complainant and its foreign supplier, but exclusively the delivery of the automobile to the customer and thus the fulfillment of the contract between the complainant and the customer.
According to the FSC, it is this legal transaction that initiates the importation and the fulfillment of which serves the importation. Accordingly, the FSC states that it shares the opinion of the Federal Administrative Court (FAC) for the assessment of the automobile tax and the import tax. The price is decisive, which is key at the time of the release of the automobiles into free circulation.
Of course, we will be happy to assist you with any further questions or with the correct evaluation of the basis of calculation for the import tax.
With best regard from your VAT/Customs team
Mónika Molnár Florian Hanslik Anita Machin