Inward processing

What is inward processing ?

Inward processing is a special customs regime in force within the European Union (EU). It aims to promote the activity of Community businesses that transform or repair goods produced outside the EU. This is the opposite regime to outward processing.

The characteristics of inward processing

The inward processing regime concerns the import of goods from outside the European Union, and their transformation, work or repair before they are re-exported or released for consumption.

For companies located within the EU, there are financial and economic benefits. For the European Union:

• granting relevant companies a cash-flow advantage allowing them to transform/repair non-Union goods which will be returned to Union territory with the suspension of fees and taxes ;
• promoting their export capacity by suspending fees and taxes and allowing them to improve their competitiveness during re-exporting.

Examples and application

To benefit from the inward processing regime, an application must be made to the competent customs authorities.

Conditions for obtaining access to the inward processing regime

The party applying for inward processing authorisation must:

• be based in the European Union ;
• guarantee the smooth running of operations.

How to file an authorisation application

From 1 May 2016, any inward processing application must be made via teleprocedure using the SOPRANO-REC platform. The customs authorities have 30 working days to assess the admissibility of the inward processing application from the date of filing in the SOPRANO-REC system.

The inward processing authorisation is valid for 5 years from its issue date. However, under certain conditions, it may be cancelled, withdrawn or suspended, either temporarily or definitively. At the end of the validity period, the inward processing authorisation must be renewed.

How the inward processing regime works

After issue of the authorisation, goods imported by the recipient company may be placed under the inward processing regime. For this placement, a standard procedure or a simplified customs clearance procedure may be used.

In case of triangular trade, when compensating products are re-imported by a different office to the one handling the export, information is shared between offices using an information bulletin. The creation of an information bulletin takes place using the European INF STP portal.

Clearance of the inward processing regime

Goods placed under the inward processing regime are not immediately subject to import fees. Any excise duty is suspended and no VAT is applied at this stage.

Clearance of the inward processing regime may take place:

• when the transformed products are placed under a new customs regime, that is to say re-exporting, placement under another specific regime (warehouse, notably external transit regime) or the release for free circulation of the goods (in an unaltered state or transformed) ;
• if they are destroyed without any waste. If waste appears following the destruction of the customs goods, they must be assigned a customs destination ;
• if goods are abandoned.

Inward processing in figures

Regulatory framework

Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code and notably its articles 5, 6, 22-32, 86, 210-225, 255-258 (UCC)

DA 16-021 - Circular on inward processing (Official Customs Bulletin No 7115 of 02/05/2016): www.douane.gouv.fr/la-douane/informations/bulletins-officiels-des-douanes/da/16-021