EU: Shortages in cross-border shipments | KPMG | GLOBAL

EU: Shortages in cross-border shipments of “excise-able” goods

EU: Shortages in cross-border shipments

A judgment of the Court of Justice of the European Union (CJEU) did not concern the Union Customs Code or export, but would be of interest to companies that move liquid bulk excise goods through the EU.


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The case is: BP Europa, C-64/15 


The case concerns the delivery of an amount of gas oil from the Netherlands to a tax warehouse in Germany under the excise duty suspension arrangement. Upon arrival at the destination, the holder of the tax warehouse discovered that the amount stated on the electronic administrative document (e-AD) and the actual amount received differed by 0.202%. 

At issue was whether the shortage of gas oil qualified as an “irregularity” or as “goods that did not arrive” resulting in excise tax (duty) payment. 

To answer this question, the CJEU first had to determine two other issues: 

  • When does the movement of excise goods under a duty suspension arrangement end? 

The chargeability of excise tax (duty) attaches to a departure from that arrangement. The CJEU found that the movement under suspension ends when the consignee, after all the goods are unloaded from the means of transport, finds that there are shortages compared to the amount that was declared on the e-AD and that was to have been delivered. 

  • Does the provision for “goods, dispatched under the suspension arrangement that did not arrive” only apply to the total amount of the goods dispatched or do these rules apply to that part of the total freight that does not arrive? 

The CJEU found that a shortage does qualify as “goods, dispatched under the suspension arrangement that did not arrive” and the rules do not only apply to a complete shipment. 


According to the CJEU, shortages detected at the tax warehouse of destination are to be treated as “irregularities” and not as “goods, dispatched under the suspension arrangement that did not arrive.” This irregularity then, by definition, occurs in the EU Member State of destination. The excise tax (duty) thus is chargeable by this EU Member State. 

Because the EU Member State of destination collects the excise tax (duty), it would issue an assessment to the party to the transaction in the EU Member State of dispatch. If this party wants to appeal the assessment, it will have to do so according to the appeal procedures and language of the EU Member State of destination. 

KPMG observation

Professionals have observed that companies need to review their contractual general terms and conditions for the supply of excise goods to tax warehouses in other EU Member States to see whether the terms cover the implications from this CJEU judgment.


Read an April 2016 report prepared by the KPMG member firm in the Netherlands: Export of products subject to excise duty or export formalities / Shortages in cross-border shipments of excise goods

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