The term ‘import’ refers to the bringing of goods into the customs territory of the Union. In everyday parlance, ‘import’ is often equated with the so-called release for free circulation (more precisely: release for free circulation as per Art. 201 of the Union Customs Code - UCC). This customs procedure allows the declarant to bring goods from outside the customs territory of the Union into the territory and, upon payment of import duties, to release them for free circulation. This means that they can be used within the customs territory without restriction. However, release for free circulation is not obligatory. When goods are brought into the customs territory of the Union, they may also be placed under another ‘special’ customs procedure (see below). In such cases, the goods do not enter free circulation but are subject to certain restrictions depending on the specific customs procedure (known as customs supervision).

While ‘import’ describes a purely factual process, customs law allows different legal consequences to be attached to an import processes.

1.    Import Procedures

When goods are transported from a third country into the EU customs territory, they must be placed under a particular customs procedure at the relevant customs office. This is done by submitting a customs declaration. In principle, customs declarations can be made in writing (electronically or on paper), verbally, or by implicit conduct (for example, by passing through the ‘green’ exit at the airport). Even before reaching the customs territory of the Union, a summary declaration may be required from the carrier.

Depending on the nature and origin of the goods, import may underlie prohibitions and restrictions or require a specific permit (import licence).

2.    Release for Free Circulation for Customs and Tax Purposes

As a rule, goods transported from a third country into the Union customs territory are released for free circulation. By means of release for free circulation, a so-called change of status occurs: the imported non-Union goods attain the customs status of Union goods.

Release for free circulation usually involves several steps:

• Submission of a customs declaration to the relevant customs authority by a declarant established within the customs territory of the Union.
  The customs declaration for free circulation must include details about the goods, notably a description, the relevant commodity code, and their customs value.

• Presentation of the goods at the relevant customs office, and, if necessary, inspection by customs officers.
  During presentation or inspection, customs officers check whether the information provided in the customs declaration matches the actual goods presented.

• Assessment of import duties in the import duty assessment notice.

  • Collection of import duties on goods is intended to ensure equal treatment of domestically produced and imported goods and to prevent the national economy from being disadvantaged by the import of cheaper goods from third countries.

  • As a rule, both import duties (see below a) and import VAT (see below b) are incurred when goods are released for free circulation

  • The obligation to pay import duties arises upon release for free circulation (Article 77 UCC) and is communicated via the import duty assessment notice.

• The goods are then released into free circulation for both customs and tax purposes.

   

a)    Import Duties

When goods are released for free circulation for customs and tax purposes, customs duties may be incurred. The rate of duty depends on the customs tariff and the commodity code of the imported goods. The commodity code is a classification under the EU-wide Combined Nomenclature and must be determined and specified in the customs declaration.

The resulting customs rate is applied to the customs value, which is primarily based on the price of the goods in the transaction  that led to their export to the Union's customs territory. Additional costs necessary to bring the goods to the border of the Union customs territory must also be included.

Release for free circulation does not always result in the imposition of import duties. No import duties are payable if a tariff or non-tariff exemption applies. A tariff exemption exists when the applicable duty rate according to the EU customs tariff is zero. Non-tariff exemptions are, for example, possible due to preferential benefits.

In certain cases, higher import duties may apply, for example, if special measures such as anti-dumping or anti-subsidy  duties come into effect.

The origin of the goods is the primary criterion for the application of different duty rates.

b)   Import VAT 

In line with import customs duties, import VAT is also payable upon release for free circulation. Unlike customs duties, the rate varies depending on the Member State in which the import takes place, according to the local VAT rates. The assessment basis for import VAT is the customs value, plus any duties levied and, where applicable, additional costs.

If the person liable for import VAT is a business, they can claim the import VAT incurred as input tax, provided that the goods have been imported for their business. The prerequisite is that the imported goods are used for VAT-liable output transactions.

3.    Special Customs Procedures

Goods can also be imported by placing them under a so-called special customs procedure (formerly known as suspension procedure). When goods are placed under a special customs procedure, no import duties are levied. All special customs procedures require a customs authorisation. In some cases, this can be applied for directly with the customs declaration (for the specific case). It is also possible to apply in advance for a general authorisation for a series of imports.

Applying for a customs authorisation is a complex process that requires thorough preparation.