EU – Change of Jurisdiction for Preliminary Ruling Procedures Related to VAT

The European Union's Court of Justice (ECJ) is the highest EU court. It is a pillar of integrity that ensures uniform interpretation and application of EU laws in every EU Member State. The ECJ also holds EU institutions accountable, ensuring they adhere to the law.

Its authority extends to interpreting and applying VAT, customs, and excise duties laws on the EU level and in each EU Member State. The ECJ's decisions and interpretations carry significant weight, being influential and mandatory for national courts. As part of the EU judicial framework reform, some of those duties will transfer to a second constituent court of the ECJ, the General Court.

Change of Jurisdiction Within the ECJ

In August, the ECJ announced that the jurisdiction to examine and decide preliminary ruling requests would be transferred to the General Court starting October 1, 2024. This change of jurisdiction covers six specific areas, including the common system of VAT, excise duties, the Customs Code, and the tariff classification of goods.

However, all the requests for the preliminary ruling will still be submitted to the ECJ, which will determine if the request, under the Rules of Procedure, falls under the jurisdiction of the ECJ or the General Court. After the request for a preliminary ruling is received, both courts will provide reasons why they consider competent to examine merits and decide on the question raised in the request.

In addition to this change of jurisdiction, additional change is made in the amending Statute regarding the request for a preliminary ruling. The European Parliament, the Council, and the European Central Bank will be notified about all requests, regardless of the area of concern and whose jurisdiction is to decide. These institutions will examine if they have any interest in the case, determine if they wish to participate in the proceedings, and write and issue statements and observations when necessary.

Conclusion

These changes come from the significant increase in disputes and complexity of cases regarding the concerned areas. Currently, the ECJ deals with an overload of cases, which affects the decision-making timeframe and further reduces certainty in the correct interpretation and application of prescribed rights and obligations.

As stated in the press release, this transfer of jurisdiction should allow the ECJ to focus on its role as the supreme and constitutional court of the European Union, and the General Court will continue to provide the same guarantees to all interested parties regarding the requests for the preliminary ruling as did the ECJ.

Source: Deloitte, Court of Justice - Press Release No. 125/24, Regulation 2024/2019