Customs

Since the establishment of the European Customs Union, the customs regime in Germany is governed first and foremost by EU law as is the case in all other EU member states. However, customs are administered by the German Customs Administration (Bundeszollamt) with offices throughout Germany.

The European Customs Union forms a single trading area based on the EU-wide community customs code (Zollkodex der Gemeinschaften). The European Customs Union has:

• eliminated customs duties between EU member states
• eliminated import VAT between EU member states
• created uniform customs regime – including (external) common customs tariff (CCT) rates for goods imported from non-member countries into the Customs Union area

The community customs code, including the common customs tariff, is applied by all 27 EU member states as well as by Andorra, San Marino, and Turkey; the latter countries having entered a customs union with the European Community.

CCT rates vary depending on the type and origins of the imported goods. The applicable tariff rates for goods, depending on product category and country of origin, can be researched using the EU “TARIC” online tariff database accessible via the European Commission website.

The EU sets its import tariffs and other customs rules on the basis of international agreements. In principle, these apply to all imports, but the EU has trade agreements offering cut-rate entry and often duty-free access for goods from neighboring, developing, and emerging economies.

These include:

• Free trade agreements with the other countries of the European Economic Area (Iceland, Liechtenstein, Norway) and Switzerland
• Customs unions with Andorra, San Marino, and Turkey
• Trade agreements with former British, French, and Portuguese colonies in Africa, the Caribbean, and the Pacific (the ACP countries)
• Trade agreements with countries around the Mediterranean, including those of southeastern Europe

All movable and tangible assets that can be controlled by a person can be considered “goods” for customs purposes. As an exception, electric current – though not a tangible asset in the normal sense – also falls under the category of goods for customs purposes because it is merchandised. Gases and liquids are considered goods for customs purposes only once they have been filled into vessels or discharged into a pipeline for transportation.

The import of such “goods” may have different purposes: goods may be meant, for example, for direct sale, assembly, or temporary use. Depending on the reason for import, different customs procedures apply.

The three most common customs procedures are:

1. Release for Free Circulation (Überführung in den freien Verkehr)

• The imported goods are subject to normal customs duties and import taxation.
• The importer pays the duties and may dispose of the goods freely.

2. Inward Processing (Aktive Veredelung)

• Third country goods are imported into the Customs Union for processing within a period of time defined by the customs administration, and subsequently re-exported.
• The imported goods are usually exempt from customs duties or taxes.

3. Outward Processing (Passive Veredelung)

• Counterpart of inward processing
• An entrepreneur temporarily exports community goods to third party countries for the purpose of processing, repairing, or working abroad.
• The processed goods are re-imported into the Customs Union area within a granted time period.
• Duties and taxes are calculated based on the differential or the clearance of the added value at the time of re-importation.

For information on other existing customs procedure such as customs warehousing (Zolllagerverfahren), temporary importation (Vorübergehende Verwendung) and processing under customs surveillance (Umwandlungsverfahren), please contact Invest in Germany or the Customs Info Center (Zoll Info Center).

Effective processing of the customs declaration can only commence once the goods are on EU/Customs Union territory and have been presented at the customs office. Products imported into the European Customs Union are subject to customs duties only when and where the product first enters the EU (for example Germany).

The German Customs Administration (Bundeszollamt) is responsible for the administration of the joint customs procedures in Germany. All information and documentation material relevant to the chosen customs procedure have to be submitted along with the customs declaration.

The Customs Info Center provides certain standard customs declaration forms in English on its website.