Total relief from import duties for a means of transport used privately by an EU-established person may be granted only if such use is provided for in a contract of employment between that person and the non-EU-established owner of the vehicle.

In this case (C-182/12, Gábor Fekete), the Court of Justice of the European Union (CJEU) examined the total relief from import duties for a means of transport used privately by an EU-established person. In this regard, the CJEU ruled that such relief may be granted only if such use is provided for in a contract of employment between that person and the non-EU-established owner of the vehicle.

Fekete was driving a private vehicle, owned by a non-EU-established foundation. It was imported into EU territory without a customs declaration under the temporary importation scheme with total relief from import duties. The Hungarian customs authority commenced proceedings due to the fact that Fekete was unable to provide proof of the customs status of the vehicle. They decided that a customs debt was incurred in respect of that vehicle, and customs duties and VAT were due. The authorities based its decision on the ground that Fekete unlawfully introduced the vehicle into the customs territory of the EU.

In the referring court, Fekete argued that for the purposes of total relief from customs duties, there was no need for an employment contract as he was using the vehicle privately. The Hungarian customs authority, however, argued that for the purposes of the application of the relief provided for by that provision, the private use of the vehicle must be provided for in a contract of employment between the non-EU-established owner of the vehicle and the EU-established private person. Fekete only produced an authorisation of the foundation, signed by its chairman.

The referring court observes, however, that the wording of that provision also seems to envisage total relief from import duty where the use of the vehicle by the private person is ‘otherwise authorised by the owner’ of that vehicle. This referring court seeks to know whether the concerned provisions must be interpreted to mean that total relief from import duties for a means of transport used privately by an EU-established person may be granted only if such private use was provided for in a contract of employment between that person and the non-EU-established owner of the vehicle, or rather, to mean that such relief may also be granted where the person, regardless of the existence of an employment relationship, is otherwise authorised by the owner of the vehicle to use it privately.

The CJEU ruled that, with regard to previous legislation corresponding with the specific provisions in force, the total relief from import duties for a means of transport used privately by an EU-established person may be granted only if such use is provided for in a contract of employment between that person and the non-EU-established owner of the vehicle.