What does the inward processing customs procedure involve?
The general framework of this customs procedure allows third country goods into Spain without payment of duty and VAT in order to carry out “processing operations”, the products resulting from said operations (the compensating products) being destined for admission into the territory or for export out of it.
WHICH DUTIES ARE PAID USING THE NEW EU CUSTOMS CODE?
Details of the IPP Suspension System
The Suspension System for the Inward Processing Procedure has 3 categories:
Strict suspension
The goods are imported without payment of duties; they are processed and the procedure is discharged upon their export.
Equivalent compensation
European Union goods equivalent to those imported can be used in processing.
Prior export
Products made from equivalent goods are exported prior to importation.
Note: the drawback system whereby tariffs are paid upfront and can be claimed back upon export is now obsolete.
What do we understand by “processing operations”?
“Processing operations” include:
- Simple repairs or usual forms of handling the goods which do not change in nature (in order to keep them in good condition or to prepare the imported goods in the warehouse prior to export or operations to improve their presentation or quality for commercial purposes).
- Operations involving complex manufacturing/chemical or technological processes.
Who would be interested in carrying out “processing operations”?
Processing operations are primarily of interest to manufacturing companies that produce goods for export given that all services relating to said operations are exempt from VAT.
However, processing operations may also be of interest to companies that want to carry out simple operations (usual forms of handling), on goods which are imported prior to being re-exported.
How does a company apply for an inward processing procedure?
It is necessary to have an authorisation and to submit an official form. We can process this for you once you provide us with the necessary information.
We also deal with processing applications with the relevant public body, Spanish Customs or the Ministry of Foreign Trade. Depending on the processing procedure you intend to carry out we can lodge the application for the relevant authorisation.
On submission of the customs declaration
This is generally the case if the goods are cleared by the customs office of entry. The authorisation is granted with the release of goods.
Prior to submission of the customs declaration
Only in certain cases: if it is a centralised clearance, if several member states are involved, if a simplified or incomplete declaration is submitted, etc.
With the new Union Customs Code, when applying for the authorisation prior to the declaration, it is important to give us sufficient notice of your intention to request the customs procedure because goods will not be cleared until it is granted (within a period of 120 days).
If you are interested in advice, processing and customs clearance relating to the temporary admission procedure, please contact us.
Find out how our customs agents can solve your customs clearance issues.
