EU customs terms
Customs duties and the EU customs system
1. Customs duties
Customs duties or customs are duties that are paid on customs goods upon import into the EU.
Customs duties are the most widespread instrument for protecting the domestic economy. As goods become more expensive and thus indirectly reduce imports from abroad, domestic products are more attractive to buy. Customs duties are also a source of funds for filling the state budget.
Definition of customs terms:
- Customs goods:
- Customs territory:
- Customs warehouse:
An enclosed space for which the warehouse-keeper holds a permit for the storage of customs goods.
- Customs system:
- Single Administrative Document – SAD:
- Export Accompanying Document – EAD:
- Movement Reference Number – MRN:
- Customs declarant:
- EORI number:
- Customs tariff:
A customs tariff is a system of numerical codes used to identify each item under a customs procedure. On the basis of this system, the rates at which customs duties are calculated and paid are determined. In the EU, this task is performed by TARIC.
- Rate of customs duties:
- Customs value of goods:
- Customs procedure:
- Release of goods for free circulation:
- Customs debt:
2. The EU customs system
The EU has unified the foreign trade policy of the Member States, which is implemented throughout the EU.
This means that the EU acts externally as one country, which makes it easier to do business with third countries in import and export transactions. The movement of goods between Member States within the EU itself is a duty-free movement,
Legal references and legislation governing customs:
- Union Customs Code,
- Act Implementing the Customs Regulations of the European Community (ZICPES),
- Customs Service Act (ZCS),
- Tax Procedure Act (ZDavP),
- Value Added Tax Act (ZDDV).
Origin of goods
The Generalized System of Preferences or GSP is an EU foreign trade policy instrument designed to encourage imports from developing countries. The GSP establishes a total or partial exemption from customs duties on imports into the European Community of goods originating in developing countries. Preferential means priority, favorable. Companies have savings in the amount of customs duties and lower tax.
Difference between preferential and non-preferential origin of goods:
Proof of origin forms:
Proof of the origin of goods in trade with countries with which the EU has concluded trade agreements or autonomous preferential arrangements.
Proof of origin in trade with Syria for shipments worth EUR 850.The certificate is issued by the exporter and is not validated by the customs authorities.
Proof of origin in trade with countries involved in the pan-Euro-Mediterranean cumulation of origin of goods.
- FORM A:
It applies to imports from developing countries under the EU’s Generalized System of Preferences.
- Simplified certificates of origin:
Declaration of the exporter on an invoice in the value of up to EUR 6,000, statement of the authorized exporter on an invoice over EUR 6,000, statement of the authorized exporter on the EUR-MED invoice declaration. The text is defined in detail.
Intrastat – Extrastat
Companies are required to report on the dispatches and arrivals of goods within the EU on a monthly basis:
- Intrastat is statistics on trade in goods between EU Member States. All companies whose total trade in goods in the EU has exceeded the so-called assimilation threshold (EUR 200,000 for the dispatch of goods and EUR 140,000 for the arrival of goods) are obliged to report. Taxable persons must send the report by every 15th of the month for the previous month. The authorized customs office for Intrastat is the Nova Gorica Customs Office, which is obliged to report to Eurostat Brussels by every 30th of the month for the previous month.
- Extrastat is statistics on the trade of EU Member States with non-EU third countries. The source of data is the Single Administrative Document (SAD).The extract does not have an assimilation threshold and all data must be captured.
The condition for the functioning of the customs union and the EU common market is the uniform application of foreign trade rules in all Member States. This unity is provided by TARIC − the integrated tariff of the European Community. The TARIC is a systematically arranged list of goods containing tariff codes, tariff names and customs rates.
The Common Customs Tariff TARIC is used for trade with third countries and is uniform throughout the EU. The level of import duties varies according to the type of goods and the country from which they are imported.
In the EU, value added tax (VAT) is considered a form of taxation, goods are taxed on imports and goods are exempt from VAT on exports.VAT is calculated and paid on the turnover of goods and services on the territory of Slovenia and on the import of goods into the EU.
The method of payment of VAT is governed by national law.
The supply of goods to another EU Member State is exempt from VAT in Slovenia if the following conditions are met:
- the seller is an identified taxable person in a Member State,
- the movement of goods is carried out for remuneration,
- the goods are produced in the territory of Slovenia,
- the consignee of the goods is an identified taxable person (valid VAT ID number of the buyer),
- it issues an invoice to its customer stating that VAT has not been charged,
- the buyer of goods in another Member State charges VAT in their own country at the applicable tax rate in that country.
In the case of purchases of goods from another Member State, VAT is charged and paid (with certain exceptions) under the following conditions:
- the supplier of goods in another Member State identified for VAT issues an invoice to the buyer in Slovenia stating that VAT has not been charged under a certain article of the law in force there,
- the movement of goods is carried out for remuneration,
- The Slovenian buyer – taxable person has to charge VAT on the 15th day after the month of delivery in Slovenia.
Every taxable person must check that its customers from an EU Member State are identified as taxable persons and that they have a valid VAT number. For this purpose, the VIES (VAT Information Exchange System) database has been set up, which contains all data on taxable persons, as well as information on the expiry of the VAT number.