Jersey Choice Ltd v HM Treasury [2024] UKSC 5 (14 February 2024)
Citation: Jersey Choice Ltd v HM Treasury [2024] UKSC 5 (14 February 2024)
Rule of thumb: Under EU law, can a country charge a transaction tax on a goods coming in from countries who are not members of the EU? Yes, it is not a breach of EU law for a member country of the EU to charge transaction taxes on goods entering the EU from non-EU member countries – that is a key point of EU & non-EU membership – products/services in foreign countries being imported into the EU can be subjected to massive tariffs, and likewise this can be to EU products/services being exported to foreign countries (the UK is now a foreign country).
Background facts:This case was on the subjects of transactional taxes & international law.
The facts of this case were that there was a gardening organisation operating in Jersey – Jersey Choice Ltd. They sold many plants to people in the UK for under £15. This started to add up to a significant amount of money & the UK introduced a legislative Act removing the exemption for a transaction tax to be paid on goods sold for £15 or less entering the UK from Jersey.
Parties argued: Jersey Choice Ltd argued that this transaction tax was a breach of EU law. HM Treasury argued that Jersey was a foreign country, so they were allowed to charge transaction taxes on goods entering the UK from foreign countries.
Court held: The UK upheld the arguments of HM Treasury. Jersey was a foreign country. There was no ratified international treaty on transactional taxes making Jersey exempt from this. The tariff on the imports was valid & had to be paid to HMRC by the person selling the plants.
Ratio-decidendi:
‘86. We therefore conclude that the Court of Appeal was correct to characterise the charge imposed on mail order imports from the Channel Islands as a fiscal measure. Its legality therefore falls to be assessed under article 110 TFEU and not under the free movement provisions. The Channel Islands are a third territory for the purposes of the VAT Directive, despite being within the customs union for other purposes. Article 110 therefore has no application. The general principle of equal treatment cannot be relied on by JCL as entitling it to the same treatment as other third territories listed in the VAT Directive because that principle does not preclude different treatment of different third territories. We would therefore dismiss the appeal’.
Lord Lloyd-Jones
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