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Traffic Manual

IV.5.4.1. Background and legislation

Article 1, point 35, of the AE Directive
2006/112/EC Directive 2008/118/EC

The term "special fiscal territories" means a part of the customs territory of the Union to which the provisions of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax or of Council Directive 2008/118/EC of 16 December 2008 on the general arrangements for excise duty and repealing Directive 92/12/EEC do not apply.

The following territories constitute the special fiscal territories:

  • Canary Islands;
  • the following French overseas departments: Guadeloupe, Martinique, Mayotte, French Guiana, Reunion and Saint Martin;
  • Mount Athos;
  • Aland.

For updated information on these special tax territories, please see the following link:

https://ec.europa.eu/taxation_customs/territorial-status-eu-countries-and-certain-territories_en

Article 188 of the AD

In order to control and take into account tax burdens (VAT and excise duties), Union goods circulating to or from, or between, non-tax territories of the Union shall be subject to the following formalities:

  • When Union goods move from a special fiscal territory to another part of the customs territory of the Union which is not a special fiscal territory and the movement ends at a place outside the Member State through which they entered that part of the customs territory of the Union, those Union goods shall move under the internal Union transit procedure.

Examples:

    1. The goods entered the Union in France, were then transported from France to the Canary Islands, and finally entered Spain. The movement of goods between the Canary Islands and Spain will be carried out under the EU's internal transit regime.
    2. For EU goods transported by ship from Aland to Sweden, the internal EU transit procedure (T2F) does not need to be applied, as the goods move from a special tax territory directly to a Member State, where they will remain. However, if the same goods are subsequently transported by road to Denmark, which is another part of the Union's customs territory, the internal Union transit procedure (T2F) will apply.
  • However, in other situations (e.g. goods entered the Union in France, where they were released for free circulation, subsequently transported to the Canary Islands and finally re-entered France, or Union goods were transported directly from Sweden to Aland), the internal transit procedure (T2F) is optional. Goods may also circulate under the cover of proof of status
    customs officer of Union goods.