Certain EU companies are facing problems since early January once re-importing, in the former EU-25 territory, products that have been transformed in Bulgaria and/or Romania using raw materials sent to them in 2006 as “outward processing traffic” (OPT). 

The Commission services informed that in order not to declare the goods for release for free circulation in Romaniaor Bulgaria in order to avoid the payment of VAT there but instead to release the goods in the ‘old’ EU-25, the best solution remains the use of the (T1) document. In other words this can be achieved by moving the processed goods under the external transit procedure (T1) to the ‘old’ EU-25 and to declare the goods there for release for free circulation. As the goods leaving Romania / Bulgaria have the status of non-Community goods (since they have not been released for free circulation) the  T2L, which is proof of Community status, cannot be issued by the Romanian / Bulgarian customs who should provide the INF 1 document.

However, economic operators and Bulgarian customs authorities have reported that Bulgarian customs authorities have issued documents (T1 and INF 1) for processed products obtained under inward processing – but the problem is that some Member States of the “EU 25” do not accept these documents and require T2L documents instead.

European Commission clarifies application of inward processing customs rules

The competent Commission services are of the opinion that the Bulgarian customs authorities may not issue T2L documents for processed products obtained under inward processing in their country when these products are not released for free circulation there. However T2L or EUR1 documents may be issued retroactively by the MemberState of export (EU-25) for the goods used in the processing operations. These documents should be submitted to the Bulgarian supervising offices in order to avoid that these components/raw materials are subject to import duties. The amount of import duties has to be indicated on the INF 1 documents by the Bulgarian customs authorities. If exclusively raw materials were used under inward processing for which it was proved that they have been in free circulation in the enlarged Community, then the INF 1 documents would indicate that the processed products are duty-free.

An alternative to the use of the external transit procedure (T1/TIR and INF 1) is to declare goods simultaneously for release for free circulation and home use with Code 42 in Bulgaria. This means that, if importation is followed by an intra-Community supply, the importation will be exempted from VAT pursuant to Article 143(d) of Directive 2006/112. Additional information on this issue is available from the “EU Enlargement in 2007” document below (see in particular case 9 on page 19).

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