Get an edge over the international competition by taking advantage of customs procedures with economic impact!
Customs – Your Business Partner
Economic customs procedures will help you get an edge over the international competition because they mean your business can:
- Import duty and VAT suspended non-Community goods
- Store, use or process the tax-free goods according to your business’s needs
The procedures meet three key business activities: storage (warehousing procedure), use (temporary importation procedure), and processing (inward processing procedure, processing under customs control procedure for imports; and outward processing procedure for exports).
WHICH PROCEDURE IS TAILORED TO YOUR SITUATION?
The choice of a particular procedure is determined by the economic rationale for the planned operation. For complex operations, several procedures may be applied in succession.
FOR STORAGE: CUSTOMS WAREHOUSING PROCEDURE
The customs warehousing procedure means you have a store of goods available at all times and can use them as needed by your business. Duties and taxes are only paid when the goods leave the warehouse, at the applicable rate at the time.
This ensures a sizeable cash-flow gain because the payment of customs duties and VAT is postponed until your goods are marketed, as warehousing duration is unlimited. Not to mention that if the goods are exported to a third country, your business will not have to pay any customs duties or VAT.
FOR USE: TEMPORARY IMPORTATION PROCEDURE
(full or partial duty and tax exemption)
The temporary importation procedure with full tax exemption means that your business may, under certain conditions, temporarily import goods that you need for your activity (tests, trade fairs and exhibitions, and so on) from third countries. The goods may not undergo any alteration. As long as the goods are re-exported, the user business does not have to pay any duties or taxes (except in certain cases).
The ATA Carnet may also facilitate the international movements of your goods and simplify customs formalities. The carnet replaces different customs documents that are usually required for a temporary import, temporary export or transit operation to and from ATA Carnet or Istanbul Agreement signatory countries. With the ATA Carnet, different types of movements are allowed, i.e., multiple return trips, circular or radiating trips, for a one-year period. In France, the Carnet is delivered by the chambers of commerce and industry
The temporary importation procedure with partial tax exemption means that you can strike a balance between your business needs and the requirements of Community regulations when the goods cannot be imported with full tax exemption. In this case, your business will pay the VAT when the goods are placed under the procedure while customs duties are paid at the time when the goods leave the Community.
FOR PROCESSING: THE INWARD PROCESSING PROCEDURE...
...PROCESSING UNDER CUSTOMS CONTROL, AND THE OUTWARD PROCESSING PROCEDURE
The inward processing procedure means that your business can temporarily import goods (for which duties, taxes and commercial policy measures have been suspended) from third countries, and process them before re-exporting the resulting finished products.
If your business needs Community goods to manufacture its products, they may be delivered to it free of VAT, as the finished goods will be re-exported.
The principle of ‘equivalent compensation’ also means you can use equivalent goods with Community status instead of the imported goods, in the manufacturing process.
The processing under customs control procedure means your business can import suspended duty and tax goods from third countries, process them, and then clear them. In this case, you will pay duties on the processed products and not on the initial goods from the third country. This procedure remedies certain situations where duties on the imported primary products are higher than the duties on the goods manufactured from the said products. Thus, the procedure may be used under certain conditions, as long as the amount of duties applicable to the processed products is lower than the amount of duties applicable to the imported goods. And it costs less. The procedure also means you can make a product compliant with a binding technical standard before customs clearance, thus facilitating the import of certain sensitive goods.
Special case: procedure of release for free circulation by reason of their end-use. The procedure grants lower or suspended duties at time of the release for free circulation provided that the goods are for an end-use set forth in the regulations, depending on the customs tariff and tariffs suspensions. The goods remain under customs control until they are first assigned to the prescribed end-use. You must apply for an authorisation to use the customs control procedure. The main activities are: processing fresh products and various oils for uses other than making human food, civil aviation, parts assembly in the automotive industry, ship building and maintenance.
The outward processing procedure means your business can temporarily export Community goods so that they can be worked on, processed or repaired in a third country. You can then re-import fully or partially import-duty exempt compensating products. The procedure means you can develop your business on the markets of the relevant countries while promoting the use of Community raw materials or semi-finished products.
Outward processing for ‘repairs’ means you can send equipment for repairs, including restoring it, putting it in order, and obtaining a standard replacement, to countries outside the European Union. A type of ‘equivalent compensation’ is also available for a more manageable procedure. This means that goods from third countries may be used instead of the exported goods.
HOW CAN YOU APPLY FOR THESE PROCEDURES?
Stage 1: the customs procedures with economic impact are granted following a request submitted by the applicant who must justify the economic need for one of the procedures.
Stage 2: the authorisation, which may be simplified, is issued by the customs administration. It sets the legal framework for the use of the procedure that the business has requested.
- The authorisation is changeable: the customs procedures must be consistent with and adjust to the economic reality of your business.
- At the outset of customs operations, i.e., once a procedure is applied to the goods, the said goods are in temporary storage and may as such undergo controls by the administration. The controls may occur during clearance or apply to the use of the procedure per se.
In short, customs procedures with economic impact are based on a type of contract between your business and the customs administration. This has a twofold advantage:
- It lays down the ‘rules of the game’ in advance so that your business knows its rights and obligations.
- It adjusts the procedure to your business’s needs and capabilities, since European regulations allow for different options under the same procedure to meet the wide range of commercial situations.
General Directorate of Customs and Excise at the following address: Direction générale des douanes et droits indirects, 11 rue des Deux Communes 93558 Montreuil cedex - FRANCE.Retour haut de page
Page mise à jour le 26/02/2008 par BIC