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
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.
Customs may, in occasional cases, where it considers it justified, grant the authorisation to a person established outside the customs territory of the Union (DA Article 161). This would primarily involve a situation where the authorisation holder is a private person 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).
In the standard authorisation procedure, an authorisation for the procedure shall be applied for in advance with customs form No. 1017e. The standard authorisation is mandatory when the authorisation to be applied for involves more than one Member State of the Union or when the applicant wishes to use equivalent goods in its operations.
An authorisation for applying the procedure can be applied with a customs declaration. In that case the required additional information is submitted with a message declaration or 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.
- Authorisations: Special procedures – Authorisation to use the end-use procedure, TORO application form
- End-use (in Finnish)
- Instruction for holders of authorisations for the end-use procedure
- Tax-exempt imports in value added taxation (in Finnish)
- Transfer of the rights and obligations of the holder of the procedure to another person in the end-use procedure (in Finnish)
- End-use, codes (in Finnish)
- Bicycle parts from China - Exemption of imports of essential bicycle parts originating in China from the anti-dumping duty through application of the end-use procedure.