Court of Justice of the European Communities (including Court of First Instance Decisions)

Provisional text

OPINION OF ADVOCATE GENERAL

CAMPOS SÁNCHEZ-BORDONA

delivered on 16 July 2020 (1)

Case C‑656/19

BAKATI PLUS Kereskedelmi és Szolgáltató Kft.

v

Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága

(Request for a preliminary ruling from the Szegedi Törvényszék (Szeged Court), formerly the Szegedi Közigazgatási és Munkaügyi Bíróság (Szeged Administrative and Labour Court, Hungary))

(Reference for a preliminary ruling — Taxation — Value added tax (VAT) — Directive 2006/112/EC — Exemptions on exportation — Goods contained in the personal luggage of travellers not established within the European Union — Concept of personal luggage — Fraud — Refusal of the right to deduct VAT)

1.        Directive 2006/112/EC (2) exempts from value added tax (‘VAT’), under certain conditions, supplies of goods to be transported out of the European Union in the personal luggage of travellers.

2.        The referring court seeks the interpretation of the Court of Justice concerning the concept of ‘personal luggage of travellers’. Specifically, it asks whether it may have regard to customs legislation that uses the same or a similar expression, (3) or whether it should take into account only the ‘normal meaning of terms’.

I.      Legal framework

A.      EU law. Directive 2006/112

3.        Article 146(1) states:

‘Member States shall exempt the following transactions:

…

(b)      the supply of goods dispatched or transported to a destination outside the Community by or on behalf of a customer not established within their respective territory …;

… .’

4.        Article 147 provides:

‘1.      Where the supply of goods referred to in point (b) of Article 146(1) relates to goods to be carried in the personal luggage of travellers, the exemption shall apply only if the following conditions are met:

(a)      the traveller is not established within the Community;

(b)      the goods are transported out of the Community before the end of the third month following that in which the supply takes place;

(c)      the total value of the supply, including VAT, is more than EUR 175 or the equivalent in national currency, fixed annually by applying the conversion rate obtaining on the first working day of October with effect from 1 January of the following year.

However, Member States may exempt a supply with a total value of less than the amount specified in point (c) of the first subparagraph.

2.      For the purposes of paragraph 1, “a traveller who is not established within the Community” shall mean a traveller whose permanent address or habitual residence is not located within the Community. In that case “permanent address or habitual residence” means the place entered as such in a passport, identity card or other document recognised as an identity document by the Member State within whose territory the supply takes place.

… .’

B.      National law. Az általános forgalmi adóról szóló 2007. évi CXXVII. törvény (4)

5.        Article 98 states that:

‘(1) Supplies of goods dispatched by post or transported from the country to a country outside the Community are exempt from the tax, provided that the supply or transport:

…

(b)      is carried out by the purchaser, or by a third party acting on his behalf if the additional conditions established in paragraphs 3 and 4 of this article or in Articles 99 and 100 of this law are satisfied.

…

(3) Paragraph (1)(b) may apply, subject to the provisions in Articles 99 and 100, where, in this context, the purchaser is not established in Hungary or, in the absence of any establishment, does not have his permanent address or habitual residence here.

….’

6.        According to Article 99:

‘(1) Where the customer is a foreign traveller and the goods supplied … form part of his personal luggage or his traveller’s luggage, in order for the exemption provided for in Article 98(1) to apply:

(a)      the value of the supply, including the tax, must exceed an amount equal to EUR 175;

(b)      the foreign traveller must prove his status by means of travel or other documents issued by authorities recognised as competent in Hungary which identify the person in question;

(c)      at the point of departure of the goods from the Community the authority must certify that the goods have left the territory by endorsing and stamping the form provided for this purpose by the State tax authorities …; the goods must be presented simultaneously with the original invoice which confirms that the goods have been supplied.

… .’

7.        Article 259(10) defines a foreign traveller as:

‘… a natural person who is not a national of a Member State of the Community or a holder of a right of residence in a Member State of the Community, or a person who is a national of a Member State of the Community but who resides outside Community territory.’

II.    Facts (as set out by the referring court) (5) and questions referred for a preliminary ruling

8.        Bakati Plus Kereskedelmi és Szolgáltató Kft (‘Bakati Plus’) is a wholesale supplier of ornamental plants and a non-store retailer of other goods. Since 2015, its annual turnover has increased from 50 million Hungarian forints (‘HUF’) to HUF 1 billion.

9.        During 2016, the year in question, almost all of the business of Bakati Plus consisted in the sale of large quantities of foodstuffs, cosmetics and cleaning products to Serbia, which it supplied to 20 individuals belonging to three families.

10.      The goods were transported by an agent of Bakati Plus from its warehouse to another warehouse which the Serbian buyers had rented in Hungary, close to the border with Serbia.

11.      There, in return for payment of the price in cash, the driver providing the transportation would hand over the goods to the buyers, together with the invoices issued by the representative of Bakati Plus and the VAT refund application forms. The goods were then taken by private car, as traveller’s luggage, to Serbia.

12.      The mechanism for obtaining the exemption from VAT operated as follows: a) Bakati Plus would complete the VAT refund application form, which was subsequently endorsed and stamped by the customs office of exit of the goods; b) a second copy of the form would be returned to Bakati Plus; c) Bakati Plus would refund the tax to the buyers in accordance with the VAT Law; and d) Bakati Plus would apply to deduct the amount of the refund in its VAT return.

13.      Bakati Plus knew that its customers were buying the goods in order to resell them on Serbian markets. It was also aware that the involvement of several members of the same family in the transaction served to ensure that the value of each supply did not exceed HUF 1 million, thus making it easier, under Hungarian customs procedure rules, for the goods to be taken across the border from Hungary to Serbia unhindered.

14.      Following a tax inspection, the Nemzeti Adó- és Vámhivatal Csongrád Megyei Adó- és Vámigazgatósága (Tax and Customs Directorate for the province of Csongrád, Hungary; ‘the first-tier tax authority’) found that the purchases made by the three Serbian families from Bakati Plus exceeded the scope of personal needs and family use, had been made for the purposes of resale and, therefore, could not be classified as ‘traveller’s luggage’. It also stated that the company did not qualify for an exemption on any other grounds.

15.      As a result of that inspection, by a decision of 27 June 2018, the first-tier tax authority ordered Bakati Plus to pay the differences in VAT, plus a late-payment surcharge and a fine.

16.      On 31 October 2018, the Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága (Appeals Directorate of the National Tax and Customs Administration, Hungary) confirmed the first-tier decision, which had been challenged before it by Bakati Plus. In dismissing the challenge it cited a judgment of the Kúria (Supreme Court, Hungary) which ruled that:

–        In interpreting the concept of traveller’s luggage, both the quantity of the goods and the frequency of the purchases are relevant. In the absence of any definition of that concept in the VAT Law or in Directive 2006/112, according to national practice, traveller’s luggage is to be regarded as the goods which a traveller purchases for his own personal needs or as a gift, and must under no circumstances be for commercial purposes.

–        Nor did Bakati Plus qualify for the exemption for the supply of goods for export, since it did not request export customs clearance in connection with the transactions and no consideration was given to processing the transactions as exports: the buyers expressly asked for the exemption for foreign travellers to be applied.

17.      Bakati Plus challenged the second-tier administrative decision before the Szegedi Törvényszék (Szeged Court, formerly the Szegedi Közigazgatási és Munkaügyi Bíróság, Hungary), (6) which has referred the following questions to the Court of Justice for a preliminary ruling:

‘1. Is it compatible with Article 147 of Council Directive 2006/112/EC … for a Member State to operate a practice whereby the concept of “personal luggage”, established as forming part of the concept of the supply of goods to foreign travellers, which is exempt from value added tax, is treated in the same way as both the concept of personal effects used in the Convention concerning Customs Facilities for Touring, done at New York on 4 June 1954, and the Additional Protocol thereto, and the concept of “luggage” defined in Article 1(5) of Commission Delegated Regulation (EU) 2015/2446 supplementing Regulation (EU) No 952/2013 of the European Parliament and of the Council as regards detailed rules concerning certain provisions of the Union Customs Code ^[(7)^]?

2. In the event of a negative answer to the previous question, how is the concept of “personal luggage” in Article 147 of the VAT Directive to be defined, given that that directive does not define it? Is the national practice whereby the tax authorities of a Member State take into account only the “normal meaning of terms” compatible with the provisions of Community law?

3. Must Articles 146 and 147 of the VAT Directive be interpreted as meaning that, where a taxable person does not qualify for the exemption for the supply of goods to foreign travellers under Article 147 of that directive, it must be examined, where appropriate, whether the exemption for the supply of goods for export under Article 146 of that directive is applicable, even if the customs procedures laid down in the Union Customs Code and in delegated legislation have not been carried out?

4. If the answer given to the previous question is that, where the exemption for foreign travellers is not applicable, the transaction qualifies for a VAT exemption on the ground that the goods are for export, can the legal transaction be classified as a supply of goods for export that is exempt from VAT contrary to the intention expressed by the customer at the time of placing the order?

5. In the event of an affirmative answer to the third and fourth questions, in a situation such as that in the case at issue, in which the issuer of the invoice knew at the time of supplying the goods that they had been purchased for the purposes of resale but the foreign buyer nonetheless wished to remove them from the territory under the scheme applicable to foreign travellers, with the result that the issuer of the invoice acted in bad faith in issuing the tax refund application form available for that purpose under that scheme, and in refunding the output VAT pursuant to the exemption for foreign travellers, is it compatible with Articles 146 and 147 of the VAT Directive and the EU law principles of fiscal neutrality and proportionality for a Member State to operate a practice whereby the tax authority refuses to refund tax incorrectly declared and paid on supplies of goods to foreign travellers without classifying such transactions as supplies for goods for export and without making a correction to that effect, notwithstanding that it is indisputable that the goods left Hungary as traveller’s luggage?’

III. Procedure before the Court of Justice

18.      The order for reference was received at the Court of Justice on 4 September 2019.

19.      Written observations were submitted by Bakati Plus, the Hungarian Government and the European Commission.

IV.    Assessment

20.      In accordance with the indications given by the Court of Justice, this Opinion will address only the first and second questions referred, which concern the concept of ‘personal luggage of travellers’ found in Article 147 of Directive 2006/112.

21.      I consider it appropriate to point out, however, that whatever the interpretation of that concept under Article 147 of Directive 2006/112, the solution to the case could depend on other elements that need to be taken into account if, as the referring court appears to suggest, the facts are deemed to constitute a plot hatched by the seller of the goods in collusion with the Serbian buyers to evade Hungarian tax laws. (8)

22.      I shall turn first to the second element of the second question referred, the answer to which can, in my view, be inferred from the case-law of the Court of Justice. I shall then go on to explain how I believe the expression ‘personal luggage of travellers’ in Article 147 of Directive 2006/112 is to be understood.

23.      The case-law of the Court of Justice on VAT exemptions stresses that these constitute independent concepts of EU law, (9) whose interpretation (which must be strict) (10) is to be found by taking into account their wording, their context and the objective pursued by the rules of which they are part. (11)

A.      Literal interpretation. The normal meaning of the terms ‘personal luggage of travellers’ as a starting point (second part of the second question referred).

24.      With regard to the literal interpretation of the provisions containing the VAT exemptions, the Court of Justice states that the meaning and scope of terms for which EU law provides no definition must be determined by reference to their usual meaning in everyday language. However, it immediately goes on to state that account must be taken of ‘the context in which [the terms] occur and the purposes of the rules in question’. (12)

25.      The response to the referring court should therefore be that national practice that interprets the expression ‘personal luggage’ in Article 147 of Directive 2006/112 by taking account solely of the ‘normal meaning of terms’ does not accord with that case-law. That ‘normal meaning’ cannot be seen in isolation from the specific context of the rule or its purpose.

26.      It is essential for the interpretation of a rule to be guided by its context and its purpose where its terms do not have a single ‘normal meaning’. That is the case with the expression at issue here.

27.      Prima facie (and intuitively) a traveller’s ‘personal luggage’ includes those items which he generally takes with him for his private use, plus other small items to be given as presents or to be kept as souvenirs.

28.      That interpretation would exclude from Article 147 of Directive 2006/112 goods for commercial purposes which the traveller takes with him when he leaves the territory of the European Union. However, it is not the only possible interpretation.

29.      It could be argued that the phrase ‘personal luggage’ refers instead to the way in which the traveller’s goods are transported. From that perspective, the ‘personal luggage of travellers’ is the luggage transported from one place to another with the traveller, whatever its contents. (13) That would include both ‘hand luggage’ and ‘accompanied luggage’, (14) that is, the other cases that make the journey by the same means of transport as their owner, in a space designed for that purpose (such as the hold of a plane, or the boot of a car). Under that approach, whether or not the exportation was of a commercial nature would be irrelevant.

30.      A literal interpretative approach does not, therefore, provide a single answer. As I have already explained, systematic and teleological criteria must also be taken into account.

B.      Context and purposes of the VAT exemption for goods exported in the personal luggage of travellers

1.      Contextual interpretation

31.      Article 147 of Directive 2006/112 is the second of the two articles that form Chapter 6 (‘Exemptions on exportation’) of Title IX (‘Exemptions’). In practice, Article 147 is simply an expansion, in particular, of Article 146(1)(b).

32.      In my view, Directive 2006/112, particularly Chapter 6 of Title IX and, above all, Articles 146 and 147, provide the basis for the interpretation of the expression ‘personal luggage’ of travellers used in Article 147. Those provisions may also cover other rules of the VAT regime.

33.      However, the referring court and, to some extent, the Commission (15) favour the customs rules. I shall begin by addressing those rules and their role as ‘context’.

(a)    VAT regime and customs regime

34.      The national practice whose compatibility with Directive 2006/112 is under debate in the proceedings makes use of two concepts from the customs field:

–        The concept of ‘personal effects’ used in the Convention concerning Customs Facilities for Touring, done at New York on 4 June 1954, and the Additional Protocol thereto. (16)

–        The concept of ‘baggage’ used in the Delegated Regulation supplementing the Union Customs Code. (17)

35.      It should be noted, from the outset, that the European Union is not a party to the 1954 New York Convention, which is not currently binding on all Member States either.

36.      However, by a Council Decision of 15 March 1993, the Convention on Temporary Admission agreed at Istanbul on 26 June 1990 was approved on behalf of the (then) Community, and its annexes were accepted, with some reservations. (18) The latter convention repeats, although not in its entirety, that of New York.

37.      There is, however, no need for me to consider which aspects of that convention and of the Delegated Regulation could be relevant to the present matter.

38.      It is true that there is a close relationship between customs regulations and VAT regulations; in addition to other objectives, that relationship facilitates coordinated management of taxes. However, that interrelationship does not mean that one can simply accept the premiss of the referring court, which the Court of Justice has rejected in other judgments ‘because of the differences in structure, object and purpose between such a [VAT] system and the Community regime on the levying of customs duties’. (19)

39.      The treatment of the personal luggage of travellers in each field illustrates those differences.

–        From a customs perspective, personal luggage of travellers refers to the cross-border transport of any goods, whatever their nature. The customs regulations apply to all components of the luggage. Whether or not those components are to be used for commercial purposes (but also other factors, such as the amount or weight of the goods) may be relevant subsequently, in determining the applicable customs regime. (20)

–        By contrast, the VAT exemption on the transport of goods imported by persons travelling from third countries seems to be expressly conditional, from the outset, on the imports being of a non-commercial character. The position is set out in Article 4 of Directive 2007/74/EC: (21) ‘Member States shall, on the basis of either monetary thresholds or quantitative limits, exempt from VAT and excise duty goods imported in the personal luggage of travellers, provided that the imports are of a non-commercial character.’ (22)

40.      The issue under discussion here is, precisely, whether the requirement referred to in the previous paragraph (non-commercial character) applies not only to the VAT exemption on imports but also to the exemption on the supply of goods exported outside the European Union in the personal luggage of travellers.

41.      An analysis of the origins and development of Community rules on VAT (culminating in Article 147 of Directive 2006/112) and their relationship with the rules prior to Directive 2007/74 will permit me to argue that it is the VAT regime, rather than the customs regime, which provides the correct context for resolving difficulties of interpretation. (23)

42.      That is also the approach underlying the case-law of the Court of Justice on that subject: the exemptions from this tax must be interpreted ‘in the general context of the common system of VAT’. (24)

(b)    Previous legislation. Directive 69/169/EEC (25) 

(1)    Exemption on importation

43.      In order to determine the scope of Article 147 of Directive 2206/112, it is necessary to go back to the beginnings of the harmonisation of turnover taxes on imports in international travel (Directive 69/169).

44.      Directive 69/169 took as its starting point the status quo regarding the harmonisation of indirect taxes at the time, noting that, until harmonisation had reached an advanced stage, the imposition of tax on importation and the remission of tax on exportation in trade between Member States would be retained. (26)

45.      To make people ‘more strongly conscious of the reality of the common market’, (27) Directive 69/169 harmonised the provisions on exemptions from turnover taxes in respect of certain imports by travellers. Goods purchased in the countries of exit were subject to certain taxes; the waiver of turnover taxes by the country of entry prevented double taxation. But it was not intended that there should be a complete absence of taxation. (28)

46.      In order to benefit from the tax exemption the goods had to be in travellers’ personal luggage, to have no commercial character, and to have a total value of less than a specific amount. (29)

47.      Article 3 of Directive 69/169 defined importations having no commercial character as taking place occasionally and consisting solely of goods for the personal or family use of the travellers or intended as presents, except where the nature or quantity of the goods were such as might indicate that they were being imported for commercial reasons.

(2)    The remission of tax on exportation. The non-commercial character of the exports

48.      The tax exemption on imports in cross-border trade was not intended to lead to a total absence of taxation. Consequently, Article 6 of Directive 69/169, as originally drafted, required Member States to take measures to avoid remission of tax being granted for supplies to travellers whose domicile, habitual residence or place of work was situated in a Member State and who already benefited from the arrangements governing exemptions on imports.

49.      The prohibition of remission of tax on exports was progressively relaxed, due to the technical difficulties it posed and in order to avoid double taxation. (30) As far as present purposes are concerned, Directive 72/230/EEC (31) amended Article 6 of Directive 69/169, enabling Member States, under certain conditions, as regards sale at the retail trade stage, to authorise the remission of turnover tax on goods carried in the personal luggage of travellers leaving a Member State.

50.      For travellers resident in another Member State, remission was possible above a certain threshold, which in all cases exceeded the duty-free allowance for imports within the framework of intra-Community travel under that directive. For travellers resident outside the Community, it was for Member States to set the threshold.

51.      In spite of the lack of a specific reference to the non-commercial character of the exports, it is clear from the context of Article 6 of Directive 69/169 that it applied solely to exports having no commercial character, as defined in Article 3 of that directive.

(3)    Repeal of Article 6 of Directive 69/169 and subsequent developments

52.      In 1977, the Sixth Directive was adopted, Title X of which contained regulations on tax exemptions. Within that title, Article 15(2) set out the exemptions on exports and similar transactions. It made no specific reference to transport in travellers’ personal luggage.

53.      Pursuant to Article 14(1)(d) of the Sixth Directive, VAT exemptions on imports continued to be governed by Directive 69/169.

54.      Article 6 of Directive 69/169 was repealed as from 1 January 1993 by Article 1(25) of Directive 92/111/EEC. (32)

55.      Directive 92/111 inserted into Article 15 of the Sixth Directive an additional subparagraph concerning arrangements for travellers, requiring the Commission to submit to the Council proposals to establish detailed rules for implementing the exemption for supplies made at the retail stage of goods to be carried in the personal luggage of travellers.

56.      With the resulting amendment to Article 15 (introduced by Directive 95/7/EC), (33) the text of Article 15(2) became virtually the same as the wording that appears in Article 147 of the current Directive 2006/112. There is, therefore, no reference to ‘non-commercial character’, which did appear in Directive 69/169 and is still present today in Directive 2007/74 (which replaces Directive 69/169 as regards exemptions on goods from third countries).

57.      In spite of that silence, there is nothing in the legislative developments that led to Article 15(2) of the Sixth Directive, as it appears in the 1995 version, to suggest that there was any intention to extend the exemption to cover supplies of goods for commercial purposes (having regard to their being transported in travellers’ personal luggage). In my opinion, a change of that magnitude would have to have been stated; it cannot simply be inferred from an omission.

58.      Moreover, that provision retained its links to Directive 69/169:

–        Firstly, it referred to Article 7(2) of Directive 69/169 for the purposes of calculating the total value of the exports.

–        Secondly, the minimum threshold for the exemption established in Article 15(2) of the Sixth Directive and the maximum threshold for benefiting from the exemption on imports in personal luggage when travelling to the Community from a third country, regulated by Directive 69/169, were set at the same amount. (34)

59.      To summarise, Article 15(2) of the Sixth Directive should be understood as applying only to supplies of goods to be transported in the personal luggage of travellers that have no subsequent commercial purpose. The parallel with the conditions for benefiting from the exemption on the import of goods in the personal luggage of travellers from third countries was thereby preserved.

(c)    From the Sixth Directive to Directive 2006/112

60.      The wording of Article 146(1)(b) and Article 147 of Directive 2006/112 reproduces that in Article 15(2) of the Sixth Directive. (35) The background that I have set out confirms that it is this current directive, not the customs regulations, which provides the correct context for determining the scope of the exemption on the supply of goods transported in the traveller’s personal luggage.

61.      Article 147 of Directive 2006/112 is not an isolated provision but rather, as I have already said, a specific case of the exemption on the ‘indirect exports’ (36) with which Article 146(1)(b) is concerned.

62.      While it is true that, for that reason, it could at first sight be argued that both articles regulate supplies for export irrespective of their (commercial or non-commercial) character, I believe that is not the case.

63.      Firstly, the preparatory work for Directive 2006/112 makes no mention of the purpose of the exports of goods transported in the traveller’s luggage. Therefore, since it simply reproduces the previous legislation, I infer that it maintains the same premises. (37)

64.      Secondly, through its list of conditions, Article 147 of Directive 2006/112 portrays a situation characterised by personal elements (regarding the traveller) and objective elements (regarding the journey and the goods) that do not fit with the idea of commercial exports:

–        With regard to the traveller, the reference to proof (in the form of an identity card or similar document) of residence outside the European Union demonstrates that we are dealing with a natural person.

–        The requirement for the traveller’s permanent address or habitual residence to be outside the European Union indicates that he is being viewed in his capacity as a non-economic operator (probably, but not necessarily, a tourist). (38)

–        This same idea (that of an occasional traveller) is confirmed by recognition of the fact that he may move around within the European Union, (39) and by the deadline of 3 months from the supply of the goods, after which there is no right of exemption. (40)

–        The items must be of a limited volume and quantity, as the traveller has to take them with him on his travels within the European Union until his departure from it, if he wishes to benefit from the exemption.

–        The total value of the goods must exceed a certain amount (although that amount may be reduced by Member States). The small sum fixed in Directive 2006/122, and the very fact that a sum is fixed, (41) support the absence of any commercial purpose for the exports.

65.      The same notion is confirmed by the timing of the exemption and the way in which it operates. It is precisely because Article 147 is essentially concerned with goods for the traveller’s own use, rather than for commercial use, that the possibility cannot be ruled out that the traveller will consume the goods within the European Union, meaning that in this case he will have to pay VAT. That is why the exemption is not applied at the time of purchase but later, in the form of a VAT refund, which is conditional on proof that the goods have left the territory of the European Union.

2.      Teleological interpretation

66.      Article 147 reflects the common theoretical basis for the export exemptions: since VAT is a tax on consumption within the tax jurisdiction and goods that are exported will be consumed outside that jurisdiction, it should not apply to supplies of those goods.(42) In that way, double taxation is avoided.

67.      It could be added that Article 147 of Directive 2006/112 also pursues another specific objective, which is linked to the authority conferred on Member States to exempt from tax supplies of goods with a total value of less than the amount specified in that article.

68.      By availing themselves of this option, Member States who so wish can decide not to collect the tax on low-value purchases, opting instead to incentivise purchases by extending the range of goods eligible for a VAT refund.

69.      In so far as that objective usually goes hand in hand with the promotion of tourism, it strengthens the argument that the ‘personal luggage of travellers’, within the meaning of Article 147 of Directive 2006/112, does not include exports for commercial purposes.

70.      A different interpretation, which also included exports of goods for resale within the exemption on supplies of goods to be carried in the personal luggage of travellers, would call into question the very rationale for the special regime established by Article 147 of Directive 2006/112.

71.      The existence of separate provisions for the exemption on supplies of goods carried in the personal luggage of travellers is the result of a conscious decision by the EU legislature, which did not want to place these rules on a par with those governing normal exports for commercial purposes but to draw a distinction between them. The two sets of rules respond to different objectives.

72.      Moreover, the contrary interpretation would turn Article 146(1)(b) and Article 147 of Directive 2006/112 into alternatives, with all that that would imply for proving that the goods had left the territory of the European Union and for export control.

73.      In short, in order to determine what constitutes commercial character for the purposes of the exemption, I propose to adopt (mutatis mutandis) the criterion laid down in Article 6 of Directive 2007/74 in respect of the exemption for goods imported by travellers from third countries. Under that criterion, exports would be of a non-commercial character where they were occasional and were for personal or family use or intended as presents. The nature or quantity of the goods must not be such as to indicate they were being exported for commercial reasons.

V.      Conclusion

74.      In the light of the above, I suggest that the answers to the first and second questions referred by the Szegedi Törvényszék (Szeged Court, Hungary) should be as follows:

–        ‘The concept of “personal luggage of travellers” in Article 147 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax should not be interpreted solely in the light of the normal meaning of terms, but must also take into account the context in which it is used and the objectives pursued by that tax.

–        The Convention concerning Customs Facilities for Touring, done at New York on 4 June 1954, and the Additional Protocol thereto, and Article 1(5) of Commission Delegated Regulation (EU) 2015/2446 supplementing Regulation (EU) No 952/2013 of the European Parliament and of the Council as regards detailed rules concerning certain provisions of the Union Customs Code do not provide the context for interpreting Article 147 of Directive 2006/112.

–        The exemption from value added tax for supplies of goods to be transported out of the European Union in the personal luggage of travellers within the meaning of Article 147 of Directive 2006/112 is conditional, among other requirements, on the exports being of a non-commercial character.’

1      Original language: Spanish.

2      Council Directive of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1).

3      In previous cases this question has been addressed from other perspectives: judgments of 9 June 1992, Commission v Spain (C‑96/91, EU:C:1992:253); of 21 February 2008, Netto Supermarkt (C‑271/06, EU:C:2008:105); and of 28 February 2018, Pieńkowski (C‑307/16, EU:C:2018:124).

4      Law CXXVII of 2007 on value added tax (‘the VAT Law’).

5      In its observations, Bakati Plus questions this account and provides additional information. But, as noted by the Court of Justice in the judgment of 2 April 2020, Coty Germany (C‑567/18, EU:C:2020:267, paragraph 22), ‘since the national court alone has jurisdiction to find and assess the facts in the case before it, the Court must in principle confine its examination to the matters which the court or tribunal making the reference has decided to submit to it and thus proceed on the basis of the situation which that court or tribunal considers to be established’.

6      Szeged Administrative and Labour Court, Hungary.

7      OJ 2015 L 343, p. 1; ‘the Delegated Regulation’.

8      According to Article 131 of Directive 2006/112, ‘the exemptions provided for in Chapters 2 to 9 [of Title IX] shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse.’ Italics added.

9      Judgment of 18 October 2007, Navicom (C‑97/06, EU:C:2007:609, paragraph 20). This case examined the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1; ‘the Sixth Directive’). This is the immediate predecessor of the present directive, and the same interpretation can be adopted (with exceptions that are not relevant here). On the relationship between the two directives in general, see recitals 1 and 3 of Directive 2006/112.

10      Ibidem, paragraph 22 and the case-law cited.

11      Judgment of 26 May 2016, Envirotec Denmark (C‑550/14, EU:C:2016:354, paragraph 27).

12      Loc. ult. cit.

13      That is, in essence, the interpretation put forward by the Commission. The referring court has doubts about that interpretation.

14      On the expression ‘accompanied luggage’, see footnote 22 below.

15      Point 45 and following of its observations. Albeit more cautiously, the Hungarian Government also adopts that position.

16      ‘The 1954 New York Convention’. The Convention is binding on Hungary. Under Article 2, the expression ‘personal effects’ means ‘all clothing and other articles new or used which a tourist may personally and reasonably require, taking into consideration all the circumstances of his visit, but excluding all merchandise imported for commercial purposes’.

17      Article 1(5) of the Delegated Regulation establishes that ‘baggage’ means ‘all goods carried by whatever means in relation to a journey of a natural person’.

18      Decision 93/329/EEC concerning the conclusion of the Convention on Temporary Admission and accepting its annexes (OJ 1993 L 130, p. 1).

19      Judgment of 21 February 2008, Netto Supermarkt (C‑271/06, EU:C:2008:105, paragraph 28). I referred to those dual regimes in my Opinion of 12 January 2016 in joined cases Eurogate Distribution and DHL Hub Leipzig (C‑226/14 and C‑228/14 EU:C:2016:1, point 91); and in my Opinion of 13 December 2016 in Wallenborn Transports (C‑571/15, EU:C:2016:944, point 66).

20      That is the case with regard to customs status (Article 119(3)(f) of the Delegated Regulation), or where the goods are to be the subject of a particular customs declaration regime (Articles 135(1)(b) and 137(1)(b) of the Delegated Regulation).

21      Council Directive of 20 December 2007 on the exemption from value added tax and excise duty of goods imported by persons travelling from third countries (OJ 2007 L 346, p. 6; ‘Directive 2007/74’).

22      The fact that in Article 5 of the directive ‘personal luggage’ is defined by reference to the packages presented by the traveller to the customs authorities is no obstacle to this. According to that article, ‘personal luggage shall be regarded as the whole of the luggage which a traveller is able to present to the customs authorities upon arrival, as well as luggage which he presents later to the same authorities, subject to proof that such luggage was registered as accompanied luggage, at the time of his departure, with the company which has been responsible for conveying him’.

23      That does not mean that some elements of the customs regime cannot be relied on to confirm the interpretation of those VAT rules where the outcome coincides with the interpretation of the customs provisions.

24      Judgment of 18 October, Navicom (C‑97/06, EU:C:2007:609, paragraph 20).

25      Council Directive of 28 May 1969 on the harmonisation of provisions laid down by Law, Regulation or Administrative Action relating to exemption from turnover tax and excise duty on imports in international travel (OJ, English Special Edition, Series I Volume 1969(I), p. 232).

26      First recital.

27      Second recital.

28      Fourth recital.

29      Article 1(1) for travellers from third countries, and Article 2(1) as regards travel within the Community.

30      That is explained in the judgment of 9 June 1992, Commission v Spain (C‑96/91, EU:C:1992:253, paragraph 5).

31      Second Council Directive of 12 June 1972 on the harmonization of provisions laid down by law, regulation or administrative action relating to the rules governing turnover tax and excise duty applicable in international travel (OJ, English Special Edition, Series 1 Volume 1972(II) p. 565).

32      Council Directive of 14 December 1992 amending Directive 77/388/EEC and introducing simplification measures with regard to value added tax (OJ 1992 L 384 p. 47).

33      Council Directive of 10 April 1995 amending Directive 77/388/EEC and introducing new simplification measures with regard to value added tax - scope of certain exemptions and practical arrangements for implementing them (OJ 1995 L 102, p. 18).

34      ECU 175. The parallel no longer exists, since the maximum threshold for the exemption on imports is EUR 300 (or EUR 430, depending on the means of transport) under Article 7 of Directive 2007/74, and the lower limit on the total value of supplies benefiting from the export exemption is EUR 175 under Article 147 of Directive 2006/112; in addition, Member States may establish a lower threshold.

35      See the correlation table in Directive 2006/112.

36      The person responsible for dispatching or transporting the goods is the customer, or a third party acting on his behalf, in contrast to the direct exports addressed in Article 146(1)(a), where the goods are dispatched or transported by or on behalf of the sender.

37      In line with earlier comments on the relationship between the current directive and the previous one: see footnote 9 above.

38      Other examples could be a member of the crew of an aircraft or cruise ship, or a student or immigrant from a third country, in relation to goods acquired in the 3 months before leaving the European Union.

39      As I noted earlier, the precursor to the final subparagraph of Article 147(2) of Directive 2006/112 is to be found in the amendment to the Sixth Directive introduced by Directive 95/7. In a document dated 2 March 1992, the Commission explains the purpose of that subparagraph: to facilitate the passage through customs of travellers who have purchased goods in one Member State and leave the European Union from a different one, in which they complete the formalities required to obtain a VAT refund. The proposal published in the Official Journal a week later [(COM(94) 58 final, OJ 1994 C 107, p. 7)] does not include that explanation.

40      No minimum period is required. With regard to tax exemptions on imports, the Court of Justice has maintained that the fact that a trip is very short is irrelevant, as is also, therefore, an a priori distinction between ‘genuine’ travellers and ‘fiscal’ travellers for the purposes of benefiting from the tax exemption (judgment of 12 June 1980, Commission v Ireland, C‑158/88, EU:C:1990:242). In my opinion, that solution can be applied to the exemption under consideration here.

41      With the disappearance of the objective of avoiding non-taxation, which requires the maximum limit on the VAT exemption on imports to be the same as the minimum limit for the exemption on exports (see footnote 34 above), the rationale for fixing a minimum amount lies in administration simplification. In setting a minimum, the aim is to ensure that the costs of administering the tax are not disproportionate to the amount collected. See, by analogy, judgment of 2 July 2009, Har Vaessen Douane Service (C‑7/08, EU:C:2009:417, paragraph 35).

42      See, inter alia, judgments of 28 March 2019, Vinš (C‑275/18, EU:C:2019:265), paragraph 23; and of 17 October 2019, Unitel (C‑653/18, EU:C:2019:876), paragraph 20.

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