The inward processing regime is an incentive system that allows inputs used in producing goods for export to be imported without paying customs duty and VAT. Inputs imported under the authorization certificate have to be processed and exported within a set period.
The system relieves cash flow directly in production with a high share of imported inputs, because tax is not paid up front. The counterpart is a commitment: if the exports covered by the certificate do not take place, the unpaid taxes are demanded with interest. Certificate quantities should therefore be taken according to a realistic export plan, and extension applications filed on time when needed. The input-output ratio is defined in the certificate; waste rates and secondary processed products are declared separately. When record discipline breaks down, the closing stage takes a long time.
The system relieves cash flow directly in production with a high share of imported inputs, because tax is not paid up front. The counterpart is a commitment: if the exports covered by the certificate do not take place, the unpaid taxes are demanded with interest. Certificate quantities should therefore be taken according to a realistic export plan, and extension applications filed on time when needed. The input-output ratio is defined in the certificate; waste rates and secondary processed products are declared separately. When record discipline breaks down, the closing stage takes a long time.
The system relieves cash flow directly in production with a high share of imported inputs, because tax is not paid up front. The counterpart is a commitment: if the exports covered by the certificate do not take place, the unpaid taxes are demanded with interest. Certificate quantities should therefore be taken accordi…
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