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Inside Inward Processing: how to suspend import duties and taxes

 

 

Resources

Webinar Slides

Inside Inward Processing: how to save on duties and taxes. Download the slides from the webinar.

download slides

Special Procedures White Paper

Manage the complexities of Special Procedures to facilitate trade and save on duty costs of imported goods.

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The Ins and Outs of Inward and Outward Processing White Paper

An in depth paper into the process and theory of IP and OP.

Download whitepaper

Five ways you can save on duty costs e-book

An at a glance guide to Special Procedures and how you potentially save on duty costs.

download e-book

Honda Customer Story

Discover how Honda avoided paying full duty on materials using Inward Processing and Customs Warehousing.

Read Honda's Customer story

Webinar Slides

Inside Inward Processing: how to save on duties and taxes. Download the slides from the webinar.

download slides

Special Procedures White Paper

Manage the complexities of Special Procedures to facilitate trade and save on duty costs of imported goods.

download whitepaper

The Ins and Outs of Inward and Outward Processing White Paper

An in depth paper into the process and theory of IP and OP.

Download whitepaper

Five ways you can save on duty costs e-book

An at a glance guide to Special Procedures and how you potentially save on duty costs.

download e-book

Honda Customer Story

Discover how Honda avoided paying full duty on materials using Inward Processing and Customs Warehousing.

Read Honda's Customer story

Frequently asked questions

All your questions answered by our speakers and C4T experts!

How can you track the importing of thousands of small products when only one individual component will be incorporated into one large export?

In CAS, you get an overview of all inbound and outbound movements on an item, as well as how they are composed in a larger item. The outbound shipment is linked to the MRN of the inbound shipment(s) for the incoming goods, creating a track record of the goods.

Is it one IP registration per import or is it valid for a certain duration?

Your Inward Processing authorisation, obtained from the customs authorities, will be valid for a certain period stated on the authorisation itself (usually three to five years). During this period, the IP authorisation can be used for bringing goods in the IP procedure as well as taking goods out of the procedure.

Can an Italian entity obtain an IPR license of behalf of a Swiss entity that would have only VAT registration.

We would suggest to reach out to a compliance consultant as this is quite complex and has to do with authorisation applications rather than IP itself.

Do all items that are part of Inward Processing need to be traceable by serial number or anything else?

Serial numbers can be tracked if needed. It is not mandatory, though. CAS does FIFO picking if requested to optimise the write-off of the oldest declarations first.

Where can you find for which items a batch number is required instead of SKU?

In our experience, batch number tracking in addition to the Item ID/SKU tracking is prevalent for pharmaceuticals or other materials that are subject to other government agency reporting, such as the European Medicines Agency.

The valuations shown were based on manufacturing businesses and importing raw materials, what about valuation of customer-owned finished goods imported for servicing and maintenance?

Inward Processing may be suitable for special procedures to bring in finished goods that require work to be done that will be re-exported. As long as goods never enter free circulation (work is done, and then the equipment is re-exported), you would avoid duties and VAT.

When we are moving raw material from Customs Warehousing to Inward Processing from one place to another, should it be moved in Transit or is transit not required to move goods from CW to IP?

This would likely depend on your authorisation: if the CW and IP are under the same authorisation, you wouldn't need to move under transit, you would just need to indicate that goods have moved from one authorisation to another. However, if there are 2+ authorisations, a transit may be required.

Can CAS submit Bill of Discharge electronically on behalf of the importer (transfer data), or does it produce a report that can be used for BOD filing?

CAS will create a BOD report that must be filed by the importer. It will not be submitted electronically at the end of the discharge period.

In your golf club example, how would you monitor the use of consumables such as glue?

If the glue is classed as free goods, you don't have to track them. If not, the same as for the other parts, but then based on the amount of grams on average you use per golf club.

Do you need to be AEO authorised? Will it facilitate receiving IPR authorisation?

AEO is not required for an IP authorisation.

Is it possible to apply for an Inward processing authorisation on behalf of another company? So the actual manufacturer is not the one who holds the authorisation, but an external company that is willing to take the financial risk and be the project manager of the Inward processing authorisation and compliance, etc.

It is always the entity that does the production or the production on behalf of someone who holds the authorisation.

During the demo presentation, the import declaration had pref code 300, meaning goods were not subject to duties - why using IPR if no duties were paid anyway?

Well spotted! This is due to it being shown in our demo environment.

Do commodity codes need to be first agreed with HMRC before IP implementation?

The commodity codes for which processing under IP is allowed, are part of the application process of the relevant customs authority.

Would the Importer or the Declarant be responsible for the Inward Processing submissions or applications?

The person who imports the goods is always responsible, even if done by a broker.

Can goods move in under IP and then first move around within the EU before it is exported again?

Goods moving between IP authorisations can be done with a transit or TORO document.

Can products under IPR give preferential origin to the products?

This is difficult to explain in a brief answer, but proving the origin of goods within the given timeframe is not always possible.

Please refer to: https://taxation-customs.ec.europa.eu/system/files/2016-09/2267-final_en.pdf

Is Inward Processing a planning opportunity for Carbon Border Adjustment Mechanism (CBAM) goods?

The purpose of Inward Processing is to defer the payment of duties on goods imported into the EU (or GB) or to avoid the payment of duties on goods that are re-exported. Contrary to this, CBAM is looking to track the cost of carbon on goods produced outside of the EU but get imported into the EU.

If you are importing raw materials or finished goods that are a CBAM category directly into free circulation in the EU, then IP would not apply.

If you are importing raw materials or finished goods that are a CBAM category directly into an IP procedure and re-exporting them, there would be no CBAM impact because the goods never entered EU commerce.

If you are importing raw materials that are a CBAM category into the IP and then manufacturing them into a finished good that will enter EU commerce, the CBAM certificates may apply: this should be reviewed with your compliance consultant and Customs authority.

It will give the same benefits for CBAM as it does for duties. The BOD is a good reporting tool for this and the future reporting needs for CBAM.

Is CAS capable of managing stock/preparing Bills of Discharge, but import/export declarations still prepared by clearance agents?

Yes, CAS can do retro-active uploads for imports and exports.

Would you be required to have a customs comprehensive guarantee in all instances?

Yes. This is one of the basic requirements for IP.