Historic Legal Victory Against Hungary

Following the abolition of Transit Document fees against Hungary, which was concluded in favor of Türkiye on October 19, 2017, a second lawsuit was filed for the refund of Transit Document fees paid to this country. The lawsuit filed in December 2021 by Counsel Mahmut Barlas, representing 21 Turkish international transportation companies in cooperation with DLA Piper Law Firm, was concluded in favor of Turkish transporters. Turkish transporters, who applied on time, received a refund of all vehicle taxes (Transit Document Fees) they paid in 2016 and 2017.

The lawsuit filed against Hungary for the abolition of Transit Document fees, known as the Istanbul Logistics Case, was concluded in favor of Türkiye with the decision of the CJEU (Court of Justice of the European Union) on October 19, 2017. Following this case, which was the biggest legal victory in favor of Türkiye, a lawsuit was filed again for the refund of the Transit Document fees paid. Within the framework of the cooperation between Av. Mahmut Barlas and DLA Piper Law Firm, this lawsuit filed in December 2021 by Counsel Mahmut Barlas representing 21 Turkish international transportation companies was also concluded in favor of our transporters and the second major victory was achieved.

Counsel Barlas explained the grounds on which the lawsuit was filed as follows:

“The Republic of Türkiye has been a party to the Customs Union covering industrial and processed agricultural products since January 1, 1996 in accordance with the Association Council Decision 1/95.

In this framework, quota limitations on goods exported by Turkish citizens/companies to the EU by EU states, all kinds of discrimination, all administrative practices that would make Turkish goods less competitive than those of member states are prohibited.

In particular, EU members may not adopt legislation that would impose customs duties or any administrative measure equivalent to customs duties on goods exported by Turkish citizens/companies to the EU.

While the Customs Union is self-evident, some EU states have not refrained from discriminating against the Republic of Türkiye through their executive powers and parliaments. There is no doubt that these practices are targeting the Turkish international transportation sector, which is achieving more and more successful results every year.”

VEHICLE TAXES PAID TO THE STATE OF HUNGARY, REFUNDED

Explaining that what Turkish transporters know as the Transit Document fee is a vehicle tax and an unfair collection, Counsel Barlas said, “For many years, the Republic of Hungary has been charging 120,000 Hungarian Forints (approximately 340 Euros) for each truck passing through its borders in both directions. Although this payment is known as a “transit document” in the logistics sector, it is actually an unfairly collected vehicle tax according to Hungary’s 1991 Motor Vehicle Tax Law. Hungary’s unfair tax practice was abolished by the precedent Istanbul Logistics case law of the Court of Justice of the European Union (CJEU) dated October 19, 2017 and numbered C-65/16.”

TURKISH TRANSPORTERS STEPPED UP AND WON A MAJOR LEGAL VICTORY

“In the past, the Turkish transportation sector has put its hand under the stone for the taxes that were unjustly collected from Turkish carriers and we won a great legal victory,” said Counsel Mahmut Barlas, who said that he filed the lawsuit in December 2021 on behalf of 21 Turkish international transportation companies.

Counsel Barlas said that the refund applications made to the Hungarian Tax and Customs Refund were rejected by the institution within 15 days on the grounds that the taxes were collected in accordance with the law and that the refund applications were not made in due time.

Following the rejection decisions, the matter was brought to the administrative judiciary, and the local court decided to refund all vehicle taxes with an extremely appropriate decision. “Upon this, the Hungarian Tax and Customs Refund initiated an extremely extraordinary constitutional court process claiming that the Hungarian Court decision was contrary to the Hungarian Constitution; as a state, Hungary claimed that the Hungarian court’s decision was unconstitutional,” said Counsel Barlas.

ALL TAXES PAID IN 2016-2017 WILL BE REFUNDED

“The right of citizens to apply to constitutional courts to defend their constitutional rights and freedoms is one of the cornerstones of democracy, but the fact that this application is made by a state, not an individual, is an attack on the Turkish international transportation sector,” said Counsel Barlas and continued as follows: “As a result of the defenses made in the file, the Hungarian Constitutional Court concluded that the vehicle taxes collected for years were contrary to Article 4 of the Association Council Decision No. 1/95 and the CJEU’s Istanbul Logistics decision; and finalized the provision for the refund of all vehicle taxes paid in 2016 and 2017, which remained within the statute of limitations.

Turkish international transportation companies have received a full refund of the vehicle taxes they paid unjustly. They were then entitled to 27.5% interest in line with the defenses made by their lawyers during the litigation process. We expect interest payments to be received by the end of the year. Considering the historically low interest rates in Europe, this is an extremely positive result.”

“WE WILL ALSO WIN THE VAT REFUND CASE IN AUSTRIA FUEL PURCHASES”

Providing information about the ongoing Austrian VAT Refund case, Counsel Mahmut Barlas stated the following:

“After the legal victory in Hungary, a similar unfair practice continues in Austria. The Austrian government has abolished the right of Turkish companies to VAT refund on fuel purchases in Austria with a regulation issued overnight under the guise of environmentalism without any parliamentary decision.

After this practice of Austria, the majority of our transporters started to purchase fuel oil from Slovenia or Hungary within the framework of their routes, but Austria’s unfair practice causes great damage to transportation and trade.”

In this respect, Counsel Barlas underlined that the fact that Türkiye is not considered to have “equal status” with EU countries in terms of the Customs Union is contrary to the spirit of the Customs Union and said, “We cooperated with DLA Piper Law Firm in the case in Austria. We put forward very strong arguments during the case. Some of these arguments are that the principle of free movement of goods and the prohibition of discrimination have been destroyed, the CJEU Istanbul Logistics case law and the acquis rights have not been taken into account by the Austrian government, this is a crime of abuse of office, and there are also allegations of fundamental violations of the General Agreement on Tariffs and Trade of the World Trade Organization, of which the Republic of Türkiye is a founding member, and the EU VAT Directive.”

Stating that the case in Austria is also in the process of the Constitutional Court, Counsel Barlas said that he expects a decision in 2024 and that he is confident that a positive result will be obtained in this case as well.

GERMANY TOLL (TOLLCOLLECT) REFUNDS ARE MADE

Stating that a similar unfair practice continued in Germany until September 1, 2021, Counsel Barlas said, “The Federal Republic of Germany added the costs of traffic police to the tolls collected from trucks on German highways.

The Court of Justice of the European Union ruled on October 28, 2020 in a case brought by a Polish haulier against these costs, which amounted to an average of 3.8% of the toll, that the police costs were unjustified. Applicants were entitled to a partial refund for tolls paid in 2017 and later, subject to the statute of limitations.

Despite this, the Federal Republic of Germany continued to unfairly and unlawfully add the costs of traffic police to the tolls until September 1, 2021. Since September 1, 2021, the traffic police costs are no longer included in the tolls.”

Claiming that the state’s sovereign power was used extremely arbitrarily and representing 15 different Turkish international shipping companies in this process, Counsel Barlas stated that partial refunds of the fees paid in 2021 have started and underlined that in this respect, another legal victory has been won for Turkish companies in Europe.

EU LEGISLATION CANNOT TREAT TÜRKİYE AS A THIRD COUNTRY!

“There is no question of Türkiye being treated as a third country in the context of bilateral relations with the European Union.

Customs duties imposed on Turkish goods, state-imposed co-effective administrative measures, quota limitations, all kinds of discrimination, all administrative practices that will make Turkish goods less competitive than member states are all aimed at impoverishing Turkish citizens. This situation can never and will never be accepted.”

Counsel Mahmut Barlas stated that he believes that they will follow all legal processes to the end and that they will bring case law in favor of Türkiye into legislation that will be the basis for the new Customs Union Agreement.