Inward processing is one of the customs procedures. By using this procedure it is possible, under an exemption from import duties, other import taxes and trade policy and agricultural policy measures:
- to introduce non-Community goods into an EU country, in order subsequently
- to have these goods treated (undergo a processing operation) in the EU, and finally
- to re-export the treated goods (the compensating products) and remove them from the EU
The following are regarded as processing operations:
- the working of goods, including mounting, assembly and adjustment to other goods
- the processing of goods
- the repair of goods, including overhaul and tuning
- the use of certain goods that do not appear in the compensating products, but that facilitate or simplify the production of these products - even if they completely or partly disappear during use. Catalytic agents in chemical processes are an example of such goods
Declaration for inward processing
In the case of inward processing, two systems are possible:
- inward processing under the suspension system (AV/S)
- inward processing under the drawback system (AV/T)
Inward processing under the suspension system
In the event of inward processing under the suspension system, the goods are imported without payment of import taxes, and without the application of trade policy and agricultural policy measures. The goods undergo a processing operation and are subsequently re-exported.
Before using this procedure, you have to provide security to Customs. If it subsequently appears that the goods are not exported after all, you will have to pay the import taxes retrospectively.
Inward processing under the drawback system (AV/T)
In the event of inward processing under the drawback system (AV/T), non-Community goods are released into free circulation, on which occasion the import taxes are paid and trade policy and agricultural policy measures are complied with. Subsequently the goods released into free circulation undergo a processing operation. When the compensating products are exported, Customs may grant a refund of the import duties and/or taxes paid. In that case, you are not required to provide advance security, because you already paid the import duties and/or taxes owed.
You can decide yourself which form of inward processing you want to use. Under the inward processing procedure, your accounts will have to fulfill certain requirements. For example, your accounts will have to show:
- what goods were placed under the inward processing procedure (type and quantity)
- what processing operations these goods underwent
- what compensating products resulted from this
- what end use was assigned to these compensating products
Inward processing authorizations
In order to use the customs procedure for inward processing, you will need an authorization from Customs. The application for an authorization can be made by the natural person or legal entity:
- that is based in the EU and performs the processing operations himself/itself, or
- that has the processing operations performed
With respect to a once-only consignment that you want to have processed, you can also apply for the inward processing authorization in the declaration you file with Customs. In that case, therefore, you are not required to request an authorization from Customs in advance.
Customs will only grant you an authorization if you intend to export the products after processing. This means that it is not possible to apply the inward processing procedure if you intend to sell the products in the Netherlands or elsewhere in the EU after processing. In addition, you will have to demonstrate that you satisfy the economic conditions.