2026-01-09
The European Court of Justice (CJEU) recently provided significant guidance on determining customs value in its rulings on the Massimo Dutti and Logista cases.
Both cases arose in 2012-2015, during time which the Community Customs Code was in effect. Generally, customs value was determined based on the ‘last sale’ principle, but the Code allowed for the ‘first sale’ principle to be applied if sufficient evidence was provided.
In the Massimo Dutti case (C-500/24), the CJEU examined under which conditions the transaction value of the first sale could be used as the customs value in the case of subsequent sales.
The Spanish company Massimo Dutti purchased clothing from a Swiss company, which sourced the products from Asian manufacturers. The goods were shipped directly from Asia to Spain. However, at the time of release for free circulation, it was unclear if all products were destined for the EU market, since they could have been sold within the EU or exported to third countries.
The ruling in the Massimo Dutti case determined that the transaction value of the first sale cannot be used as the customs value if, at the time of sale, it is only established that the goods are intended for the EU but the final destination is unknown. It is not sufficient for the goods to physically enter the EU; clear proof of commercial intent is essential for considering the first sale in customs value determination.
In the Logista case (C-348/24), the CJEU evaluated whether the transaction value of the first sale could be accepted as the customs value for goods under customs warehousing procedures, where the first sale in the chain is directed to the EU customs territory but its release for free circulation occurs only after a second sale. In this case, a Cuban company sold cigars to Altadis, which stored them in a Spanish customs warehouse. Altadis then sold the cigars to Logista. Some cigars remained in the warehouse, while others were released for free circulation and reached final buyers through various sales channels.
In this case, the CJEU ruled that if goods are placed in a customs warehouse after entering the EU customs territory and later released for free circulation following a second sale through a simplified procedure, the transaction value of the first sale can be accepted as the customs value, provided that the import is intended for the EU market and that this is supported by sufficient evidence.
Although both cases were based on similar facts, the CJEU reached different conclusions regarding the applicability of the ‘first sale’ principle. Each case requires careful examination of all circumstances to apply the appropriate transaction value. The decisions highlight the necessity of strict proof of commercial intent and compliance with legal conditions in determining customs values.
KPMG’s tax and customs advisory team is available to assist with questions related to customs value determination, complex sales chains, customs warehousing, preferential treatment, and discussions with customs authorities.
