Inward processing

Under inward processing, goods are imported from third countries to the European union e.g. for the purposes of manufacturing, repair, restoring, putting them in order or other handling.

After inward processing, the goods can be re-exported or released for free circulation.

No import duties or import taxes will be collected on the goods placed under the procedure, unless the procedure is discharged by releasing the goods for free circulation in the customs territory of the Union. Also, the goods will not be subject to commercial policy measures, insofar as they do not prohibit the entry or exit of goods into or from the customs territory of the Union.

A bill of discharge must be presented to the supervising customs office for the goods placed under the procedure.   

If the procedure is discharged by releasing the goods for free circulation, customs duty and value added tax are paid for the goods. As of 1 January 2018, importers registered for VAT declare the VAT to the Tax Administration.

Points to consider

How do I submit an import declaration?

From inward processing to release for free circulation 

When you are declaring goods for free circulation after inward processing, use procedure 4051. 

Provide as previous document the inward processing declaration with the code IM and as identification, the transaction ID you received from the service Import declarations for businesses – special procedures (ITU). 

When the inward processing ends with release for free circulation, the additional procedure code F44 or 644 must be entered in the import declaration. The additional procedure is used to indicate according to which article the customs debt is defined in the authorisation. If you wish to apply additional procedure codes 150 or 160, the additional procedure codes F44 or 644, are not entered. 

  • Enter the additional procedure code 644, if the inward processing ends with release for free circulation and you wish to apply Article 85(1) of the UCC for determining the customs debt.
  • Enter the additional procedure code F44, when the inward processing ends with release for free circulation and you wish to apply Article 86(3) of the UCC for determining the customs debt.

    If you enter F44 as additional procedure code, provide the following details with the additional information code ‘FIXXX’ for the goods item:
    • the commodity code provided, when the goods are declared for procedure 51
    • how much material placed under procedure 51 in used for the manufacture of a product to be released for free circulation, and the value of this material.
  • Enter as additional procedure ‘160 Special procedures - equivalent goods - release of non-Union goods for free circulation and consumption’, if you are using equivalent goods (UCC Article 223(1)(1) and IA Article 269). 
  • Enter as additional procedure ‘150 – Inward processing, simplified discharge of the procedure’, if the authorisation for inward processing allows for simplified discharge of the procedure (UCC Article 256 and IA Article 324). 

Enter as additional information codes, either 00700 or 00700 and 00800:

  • 00700 IP – Discharge of inward processing (Article 241(1) first sub-paragraph of Delegated Regulation (EU) 2015/2446)
    • Enter as description of the additional information code either the authorisation number of the inward processing (i.e. the number of the normal authorisation or the number of the authorisation for simplification, i.e. the number of the customs decision, when the authorisation was applied with a customs declaration) or the INF number. 
  • 00800 IP CPM – Discharge of inward processing (specific commercial policy measures) Article 241(1) second sub-paragraph of Delegated Regulation (EU) 2015/2446)
    • Enter the code 00800 when certain commercial policy measures were applied to goods originally places under procedure 51 and these commercial policy measures are still applied when the goods (including processed products) are places under a subsequent procedure. Enter also the additional information code 00700 and its description.
      • According to UCC Article 5(36), the commercial policy measures are non-tariff measures. Commercial policy measures include required documents such as surveillance documents, health certificates, import authorisations as well as import prohibitions and restrictions. For example, anti-dumping duties and protective measures are tariff measures.

When the inward processing is discharged by placing the goods under the customs warehousing procedure

When after inward processing, the goods have been place under the customs warehousing procedure, which is discharged with release for free circulation of the goods, the information to be provided in the declaration is determined according to the inward processing procedure. Enter in the customs declaration customs procedure code 4051 and the information required for the customs procedure (customs procedure code 4071 is not used). Provide as previous document the customs warehousing MRN as well as the code ‘FICWD – Release from customs warehouse’ in the additional information for the goods item. Provide as additional document with the code ‘1ZZZ’, the transaction ID of the inward processing you received from the service Import declarations for businesses – special procedures (ITU). 

Customer notice, 9.4.2021: New code introduced (Y067) when a special procedure or temporary storage is discharged after 1 January 2021 or thereafter (in Finnish and Swedish)

Inward processing can be discharged by transit only if the goods are transferred to another authorisation holder within the Union. In the transit declaration, in the box for additional information, enter the following information:

  • “ZZZ” (other) and “IP” and the electronic INF reference number (if any).

As the previous procedure, enter the number of the customs clearance decision concerning the inward processing procedure.

If the goods placed under the inward processing procedure are subject to commercial policy measures (e.g. surveillance document), enter also “C P M” in addition to “IP”.

As a rule, an authorisation for inward processing is granted to a business established in the Union which carries out the processing or arranges for it to be carried out. An authorisation is not granted e.g. to an importer who sells or uses the goods as such or that doesn’t have any connection with processing operations.

In occasional cases, where it is considered justified, an authorisation may also be granted to a person established outside the customs territory of the Union, e.g. regarding a private person, when the case is not considered being of any great economic importance.

In the standard authorisation procedure, an authorisation for the procedure has to be applied for in advance with customs form No. 1017e.

A standard authorisation is required e.g. when the placement of goods under the procedure and the discharge of the procedure take place in the territory of different EU Member States or when the goods are to be processed or used in the territory of another Member State.  

An authorisation for the procedure can be applied for 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 inward processing procedure.

  • The applicant is established in the territory of the Union (the authorisation may, on special grounds, also be granted to an applicant established outside the Union).
  • The applicant has a valid comprehensive guarantee.
  • The applicant’s economic conditions are fulfilled.
  • The applicant shall not have committed any serious infringements of customs or tax legislation.
  • The applicant keeps sufficient records, which allow customs controls.
  • The applicant is able to submit a sufficient bill of discharge.

Where a customs debt is incurred as a result of inward processing, the amount of import duty to be paid shall be determined either on the basis of the goods placed under the procedure (UCC Art. 86(3)) or on the basis of the products to be released for free circulation (UCC Art. 85).

Regardless of the article applied when determining the amount of customs debt, the level of the import duty is always the amount of duty valid the day when the customs debt was incurred. In the authorisation application, the applicant shall choose which article shall primarily be applied.

The procedure has to be discharged within the time limit prescribed in the authorisation, and it can be discharged with any acceptable customs procedure, e.g. re-export or customs warehousing.

After the discharge of the procedure, the bill of discharge has to be presented to the supervising customs office within 30 days after the expiry of the time limit for discharge.

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