End use

Favourable tariff treatment on account of end use is granted to such goods brought into the customs territory of the EU that are released for free circulation in the customs territory of the Union provided that they will be used for a specific purpose or in specific circumstances.

Favourable tariff treatment on account of end-use can be applied to

  • goods listed in the special provisions of the Combined Nomenclature, e.g. civil aircraft and goods for use in civil aircraft
  • goods mentioned in the descriptions of the commodity codes of the Finnish Customs Tariff and in the footnotes concerning the use of the goods.

A duty exemption or a reduced rate of duty on account of end-use is granted at the time of import, but the goods will remain under customs supervision until they have been used for the purposes laid down for the application of the duty exemption or reduced rate of duty.

Information about value added taxation: Customs duty and VAT

Upcoming code changes (November 5 2022):

General 

  • The end-use procedure receives a new customs procedure code 44xx (currently 40xx)
  • Codes 140 or 115 for preferential treatment, are in the future usually 100
  • Nature of transaction will be replaced with codes for nature of business activity
  • The national procedure codes will no longer be in use. In the future, the procedure is supplemented with additional procedure codes
  • The additional procedure code does not specify, whether the authorisation in question is granted by Customs’ authorisation centre or if it’s applied for with a customs declaration
  • Customs declarations must always contain two additional information codes for reserving a liability guarantee: 
    • ”FICOM – Secondary commodity code”, supplemented with a 10-digit commodity code for the import goods that would be used if the products were not imported for end-use.
    • ”FIPRE – Secondary preferential treatment”, supplemented with preferential treatment code “100”.
    • Moreover, if an additional quantity is to be declared on the commodity code for calculating customs duties, be sure to enter the quantity as well.  
       

Authorisation granted by Customs’ Authorisation Centre

  • Type and number of the authorisation
    • No other authorisation-related details are needed, just the type and number
    • Additional information connected to the procedure, such as the time limit, is generated automatically on the decision according to the authorisation.
    • The authorisation granted by Customs’ Authorisation Centre must be in force when the procedure starts.
    • The details in the declaration are compared to the authorisation, so changes to the authorisation must be made immediately if the changes are related to
      • commodity codes
      • the address of the place of processing
  • If the commodity code has a Taric restriction that requires an end-use authorisation, you should provide this authorisation in the goods item details under “Additional documents” using codes N990 or C990, and the authorisation number as its identifier.

Authorisation applied for with a customs declaration

  • When applying for an authorisation with a customs declaration, you must use a standard customs declaration.
  • When applying for an authorisation with a customs declaration in the Customs Clearance Service:
    • After selecting the customs procedure, select the option stating that you have no valid authorisation. You can also copy a declaration you have submitted previously, in which case the details of that authorisation application will be automatically copied to the new declaration.
    • Provide the additional details on the special procedure under “Authorisation request”. Provide the additional detail by selecting it from the drop-down menu or entering the required text.
    • For example, provide the proposed method of identification as follows:
      • Always select the code “7 – Other means of identification”, and as the identification, enter “records” and the address where the records are stored.
      • Two methods of identification are often required, so also select for example the code “1 – Serial number or manufacturer number” and enter the serial number or manufacturer’s number.
  • When you are applying for an authorisation with a message declaration, provide the additional information on the special procedure using the following additional information codes:
    • ”00100 – Application for authorisation for the use of a special procedure other than transit based on the customs declaration” and leave the description field blank
    • “FIXAA – supervising customs office”
      • In Finland, you should always enter “FI002000 – Electronic Service Centre” as the identifier
    • “FIXBH – Period for discharge (length in months;reasons)” and as its description the time in whole months
    • “FIXBJ – Customs offices of discharge” and as its description the code of the customs offices that discharge the procedure (e.g. FI201003)
    • “FIXAC – Place of processing” and as its description the address of the place of processing. When needed, repeat “FIXAC” if there are several places.
    • ”FIXBN – Details of planned activities” and as its description the nature of the use (e.g. equipping or servicing a ship and shipbuilding)
    • “FIXBO – Rate of yield” and as its description the quantity or percentage of processed products obtained from the goods (e.g. 100% when all products are used)
    • “FIXBP – Processed products (CN code;description)” and as its description the commodity code and goods description (in a the format “8901101000;sea-going vessel/name of vessel” in the XML message)
    • “FIXBQ – Identification of goods”
      • As the description, provide the code and its qualifier:
        • “1” – Serial number or manufacturer number 
        • “2” – Affixing lead seals, seals, stamps or other similar distinguishing signs 
        • “4” – Taking samples and using illustrations or technical descriptions  
        • “5” – Carrying out analyses 
        • “6” – Communication form to facilitate the temporary export of goods sent from one country to another for manufacturing, processing or repairs (only suitable for the outward processing procedure) 
        • “7” – Other means of identification (an explanation to be provided on the means of identification used) 
        • “8” – No measures of identification in accordance with Article 250(2)(b) of the Code (only suitable for temporary admission)
      • Example of a description of the FIXBQ code when providing methods of identification:
        • Always provide the code “7” followed by a semicolon and the address where the records are stored as a qualifier (in the format “7;place where the records are stored” in the XML message)
        • In the case of, for example, a car, also provide the code “1” (Serial number or manufacturer number) and the vehicle identification number (VIN) of the car as the qualifier (in the format “1;12356” in the XML message)
  • If the commodity code has a Taric restriction that requires an end-use authorisation, you should provide the authorisation required by the commodity code in the goods item details under “Additional documents” using codes N990 or C990, and the text “N/A” as the authorisation identifier.

Bill of discharge and time limits for discharging the procedure

  • The bill of discharge can be provided with a document sent separately or with a free-form contact message FI439 with code 007 as reason for contact
    • The bill of discharge will be getting its own message FI488
  • A reminder message is coming regarding the time limit for the procedure and for providing a bill of discharge
  • The customer can request an extension to the time limit for discharging the procedure with message FI439 and reason code ‘003 – Request for time-limit extension.’

Goods that have their own commodity code in the Combined Nomenclature indicating end-use, a so-called end-use code

Examples of national procedure codes that are changing into additional procedure codes:

  • Currently: 7EA, 7EB
    • In the future: Additional procedure code 657, when end-use customs duty and VAT is collected for the goods based on the customs tariff
  • Currently: 7EE, 7EF
    • In the future: Additional procedure code 653, when end-use customs duty is collected for the goods based on the customs tariff
  • No VAT is collected on the import of goods, because the goods are moved to a VAT warehouse (section 72(h)(1)(2) VAT Act).
  • If the goods are moved to a VAT warehouse, enter the VAT warehouse ID with additional information code ‘FIALV – VAT warehouse ID.’

Preferential tariff treatment in accordance with the special provisions of the Combined Nomenclature: Goods for certain ships, boats and other vessels and for drilling or production platforms

Examples of national procedure codes that are changing into additional procedure codes:

  • Currently 7NA/B
    • In the future: Additional procedure code 657, when VAT is collected but not customs duty.
  • Used for spare parts and equipment intended for incorporation in ships, boats or other vessels for non-professional transport, as well as goods intended for incorporation in drilling or production platforms and tubes, pipes, cables and their connection pieces, linking these platforms to the mainland
  • The Combined Nomenclature must have a footnote (EU003)
  • Currently: 7PA/B
    • In the future: Additional procedure code 651, when customs duty and VAT are not collected. The current additional statement code VVY is not entered in the future
  • Used for spare parts and equipment supplied to vessels in professional international traffic.
  • The Combined Nomenclature must have a footnote (EU003)

Preferential tariff treatment in accordance with the special provisions of the Combined Nomenclature: Goods for certain ships, boats and other vessels and for drilling or production platforms

Examples of national procedure codes that are changing into additional procedure codes:

  • Currently 7NA/B
    • In the future: Additional procedure code 657, when VAT is collected but not customs duty.
  • Used for spare parts and equipment intended for incorporation in ships, boats or other vessels for non-professional transport, as well as goods intended for incorporation in drilling or production platforms and tubes, pipes, cables and their connection pieces, linking these platforms to the mainland
  • The Combined Nomenclature must have a footnote (EU003).
  • Currently: 7PA/B
    • In the future: Additional procedure code 651, when customs duty and VAT are not collected. The current additional statement code VVY is not entered in the future
  • Used for spare parts and equipment supplied to vessels in professional international traffic
  • The Combined Nomenclature must have a footnote (EU003)

 

Preferential tariff treatment in accordance with the special provisions of the Combined Nomenclature: Civil aircraft and goods for use in civil aircraft

Examples of national procedure codes that are changing into additional procedure codes:

  • Currently: 7LA/B
    • In the future: additional procedure code 657
  • Is used for civil aircraft, certain spare parts and equipment for these aircraft, as well as for a domestic airline’s ground flying-trainers, and their parts, intended for civil use
  • Customs duty in accordance with the end-use code is collected, as well as VAT (Footnotes EU001 and EU002 of the Combined Nomenclature)
  • Currently: 7HA/B
    • In the future, additional procedure code 652 is used for spare parts and equipment for aircraft in international traffic or
    • additional procedure code 656 for ground flying trainers imported by a foreign airline
  • Is used for civil aircraft as well as for certain spare parts and equipment for these aircraft, as well as ground flying trainers, and their parts, imported by a foreign airline and intended for civil use
  • Customs duty in accordance with the end-use code is collected, but not VAT (Footnotes EU001 and EU002 of the Combined Nomenclature). The VAT exemption requires that the goods are imported for use by an entrepreneur operating in return for payment mainly on international routes

Preferential tariff treatment in accordance with the special provisions of the Combined Nomenclature: Civil aircraft and goods for use in civil aircraft

Examples of national procedure codes that are changing into additional procedure codes:

  • Currently: 7LA/B
    • In the future: additional procedure code 657
  • Is used for civil aircraft, certain spare parts and equipment for these aircraft, as well as for a domestic airline’s ground flying-trainers, and their parts, intended for civil use.
  • Customs duty in accordance with the end-use code is collected, as well as VAT (Footnotes EU001 and EU002 of the Combined Nomenclature)
  • Currently: 7HA/B
    • In the future, additional procedure code 652 is used for spare parts and equipment for aircraft in international traffic or
    • additional procedure code 656 for ground flying trainers imported by a foreign airline
  • Is used for civil aircraft as well as for certain spare parts and equipment for these aircraft, as well as ground flying trainers, and their parts, imported by a foreign airline and intended for civil use
  • Customs duty in accordance with the end-use code is collected, but not VAT (Footnotes EU001 and EU002 of the Combined Nomenclature). The VAT exemption requires that the goods are imported for use by an entrepreneur operating in return for payment mainly on international routes

Preferential tariff treatment not included in the special provisions of the Combined Nomenclature: Goods for use in civil aircraft

Examples of national procedure codes that are changing into additional procedure codes:

  • Currently: 7DA/B
    • In the future: additional procedure code 657
  • Used for those aircraft and their spare parts and equipment listed under the commodity codes of the customs tariff, which are not mentioned in Part B of the Special Provisions of the Combined Nomenclature, but whose commodity code has a footnote for end-use
  • Customs duty in accordance with the end-use code is collected, as well as VAT
  • Currently: 7FA/B
    • In the future: additional procedure code 656
  • Used for those aircraft and their spare parts and equipment listed under the commodity codes of the customs tariff, which are not mentioned in Part B of the Special Provisions of the Combined Nomenclature, but whose commodity code has a footnote for end-use
  • Customs duty in accordance with the end-use code is collected, but not VAT. The VAT exemption requires that the goods are imported for use by an entrepreneur operating in return for payment mainly on international routes

Exemption of imports of bicycle parts originating in China from the anti-dumping duty through application of the end-use procedure

An example of a national procedure code that is changing into an additional procedure code:

  • Currently 7EA/B
    • In the future: additional procedure code 655
    • The end-use procedure requires a written authorisation granted by the customs authority or an authorisation granted with a customs declaration. The applicant must fulfil the prerequisites for the granting of an authorisation, and a maximum of 299 of each allowed commodity code / goods category per calendar month, can be placed under the procedure
    • Furthermore, in addition to additional information codes “FIPRE” and “FICOM”, consignment details in customs declarations must contain the following for reserving a liability guarantee:
      • additional information code ”FIPLK - Anti–dumping duty/Countervailing duty”
      • attachment ”D019 - Authorisation for customs procedure with economic impact/specific use in connection with an anti-dumping or countervailing measure (Delegated Regulation (EU) 2015/2446, annex A, column 8c)”, and the identifier ”N/A”.

Points to consider

Authorisation to use the end-use procedure can be granted to a person established in the customs territory of the Union. The holder of the authorisation must either use the goods for the purpose required by end-use or transfer the obligation to another person on the conditions laid down by Customs.

In occasional cases, where Customs considers it justified, the authorisation may be granted to a person established outside the customs territory of the Union (DA Article 161). This would for example be possible in a situation where the authorisation holder is a private individual and the goods are not intended for commercial use.

An authorisation is to be applied from the country where the applicant's main accounts for customs purposes are held or accessible, and where at least part of the activities to be covered by the decision are to be carried out.

If the applicant for an authorisation is established outside the customs territory of the Union, the authorisation is to be applied for from the country where the goods are to be first used (DA Art. 162).

An authorisation granted by the Authorisation Centre is mandatory when the authorisation involves more than one Member State of the Union or when the applicant wishes to use equivalent goods in its operations.

You can apply for an authorisation to use the end-use procedure from the Authorisation Centre. Apply for the authorisation in advance via the online Authorisation Service, which is available on the front page of Customs’ e-services. 

If you are applying for a Union authorisation, i.e. an authorisation involving more than one Member State, submit the application in the EU’s Customs Decisions Service. The Union authorisation requires, among other things, consent from the Member States involved as well as a functioning system for exchange of information between the holder of the authorisation and the different Member States. 

You can also apply for an authorisation for the procedure with a customs declaration. In that case, provide the required additional information with a declaration in message format, or with a SAD form. An authorisation for using the procedure is granted, when the goods are released for the end-use procedure. 

Goods placed under the end-use procedure may be subject to two kinds of guarantee requirements: guarantee reservation required for the customs debt (if the end-use duty is not zero) and possibly for the VAT debt, and the liability guarantee for the uncollected difference between the general duty and end-use duty. The liability guarantee remains reserved until the procedure has been discharged correctly and the bill of discharge has been accepted.

If the rights and obligations with regards to goods already placed under the end-use procedure are intended to be transferred to another person, either fully or partially, this can be achieved by the transfer of rights and obligations (TORO) of the holder of the procedure.

The following are examples of the rights of the holder of the procedure that may be transferred to another person:

  • the right to use the goods
  • the right to move goods placed under the procedure
  • the right to export the goods before they have been assigned to their prescribed end-use and thereby benefit from the extinguishment of the customs debt.

The following are examples of the obligations of the holder of the procedure that may be transferred to another person:

  • the obligation to assign the goods to their prescribed end-use within the time-limit for the discharge of the procedure
  • the obligation to keep records
  • the obligation to keep the goods available for customs control measures
  • the obligation to pay the import duties if customs debt is incurred for the goods through non-compliance in accordance with UCC Article 79.

Information about TORO shall be provided in the end-use authorisation. TORO for the authorisation can also be applied for later from to the Customs Authorisation Centre.

The obligation to present a bill of discharge can never be transferred to someone else.

The procedure must be discharged within the time limit given in the authorisation.

The end-use procedure and the customs supervision concerning the goods end where the goods have been assigned to the end-use prescribed in the authorisation.

The customs supervision also ends where the goods have been taken out of the customs territory of the Union, destroyed or abandoned to the State or where the goods have been used for purposes other than those laid down for the application of the duty exemption or reduced duty rate and the applicable import duty has been paid.

After the procedure has been discharged correctly, the holder of the authorisation or the holder of the procedure may use the goods as they wish, e.g. freely sell the goods.

The holder of the authorisation must present the bill of discharge to the supervising customs office within 30 days after the expiry of the time-limit for discharge.

A customs debt shall be incurred when instead of assigning the goods to their prescribed end-use, they are intended to be used or are used for a purpose other than their prescribed end-use. The amount of customs debt is determined according to the provisions in force when the goods were placed under the end-use procedure.

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