Refund and remission of customs duties
The unlawful obtaining of remissions and/or refunds of customs duties may constitute tax evasion under Section 370 AO, since in this respect the obtaining is an unjustified tax advantage within the meaning of Section 370 (4) sentence 2 AO.
Thus, a tax evasion under Section 370 AO may be committed with respect to the rejection of goods under Article 118 Union Customs Code, Article 180 Union Customs Code-IA [Article 238 Customs Code, Article 892 Customs Code Decree] by re-exporting goods other than the imported ones and refunding or remitting the import duties of the previously imported goods. The application under Article 118 of the Union Customs Code [Article 238 of the Customs Code] results in an effective favorable customs decision, which includes a tax advantage and leads to remission or refund of the notified import duties. Accordingly, this constitutes the offence of customs evasion, Section 370 (4) sentence 2 AO.
The refund is a full or partial repayment of the duty, while remission occurs when the customs authority decides to refrain from collecting a duty that it has already assessed or has not yet received (Art. 5 No. 28, 29 Union Customs Code [Art. 235 Customs Code]). In both cases, the original decision of the customs authority to assess the duty is corrected.
The Union Customs Code provides for the following groups of cases for remission or repayment of customs duties:
1. the duty was not due or should not have been assessed or should not have been assessed in that amount and the person concerned did not act fraudulently (Art. 117 Union Customs Code, Art. 172 to 180 Union Customs Code-IA [Art. 236 Customs Code, Art. 883 to 891 Customs Code-DVO]).
Example: An importer imports goods from a country where a preferential duty is levied on the basis of origin. However, the importer does not present a preferential certificate of origin. After paying the duty, the importer receives the certificate of origin and applies for a refund of the duty.
The application must be made within three years of notification of the duty. An extension is possible. The customs authorities act on request or on their own initiative.
2. the customs declaration that led to the levy of the duty is subsequently declared invalid (Art. 117 Union Customs Code [Art. 237 Customs Code]).
Example: Someone orders goods by mail order from a non-Community country. When the package is handed over, the customer has to pay the customs duty. He then exercises his right of return and sends the goods back to the non-Community country. The original declaration for release of the goods for free circulation is declared invalid and the customs duty is refunded (Art. 117, 175 Union Customs Code [Art. 66, 237 Customs Code, Art. 251 No. 1 lit. b Customs Code Decree]). In this case, an application is required, which must be made within the period for invalidation of the customs declaration.
3. the imported and cleared goods were defective or did not comply with the terms of the contract and are therefore returned (Art. 118 Union Customs Code [Art. 238 Customs Code]).
Example: Someone imports machines for his company, which must have certain specifications. After several test runs, it turns out that the presupposed and agreed conditions are not met. In this case, the machinery can be returned and a refund of the duty paid can be requested (Art. 117 of the Union Customs Code [Art. 238 of the Customs Code, Art. 892 of the Customs Code Decree]).
In that case, an application is required, which must be made within 12 months from the date of notification of the duties. An extension of the time limit is possible.
4. the customs authorities have assessed a duty lower than the duty due due due to an error and the error could not reasonably have been detected by the debtor (Article 119 of the Union Customs Code [220(2)(b) of the Customs Code]).
Example: Someone regularly imports various goods for which he applies for binding tariff information. For one of these goods, the customs administration informs the importer that it does not require a binding tariff information because the goods largely correspond to another product for which it has already received an information. After the import of this product, it is determined that the product belongs to a subheading with a higher duty rate. The difference from the higher duty may be waived or remitted if the error was not apparent to the customs authority (Article 119 of the Union Customs Code [Article 220(2)(b) of the Customs Code]). 5.
5. there are special circumstances and the person concerned has not acted with fraudulent intent or with obvious negligence (Art. 120 Union Customs Code [Art. 239 Customs Code, Art. 900-904 Customs Code Decree].
Example: An importer imports beef with certificates of authenticity entitling him to a reduced rate of duty. However, upon clearance, the customs authority realizes that the certificates are forged without this being apparent to the importer. The customs authority was aware of the falsifications but did not inform the importers, so it would be unfair to make the importer bear a loss exceeding the normal business risk (Art. 120 Union Customs Cedex [Art. 239 Customs Code]).
In that case, an application is required, which must be made within 12 months from the date of notification of the duties. An extension is possible.
Applications for remission or repayment of duty or for waiver of post-clearance recovery must be submitted to the competent national customs authority. Only in certain cases is this subject to a decision by the Commission. This concerns, for example, an error or breach of duty by the Commission, investigations by EU authorities, or a customs amount of EUR 500,000.00 or more. This results from Art. 869-876 and Art. 899-909 of the Customs Code Implementing Regulation.
A remission or refund procedure is not necessary if a customs regulation provides for a cure or cancellation of the customs debt and if the duty has not yet been assessed.
This is the case, for example, with:
- Art. 204 Customs Code in conjunction with. Art. 859 of the Customs Code Implementing Regulation: misdemeanor without effect on the proper conduct of the business.
- Art. 212a of the Customs Code: granting of an exemption from customs or non-tariff duties despite the discovery of irregularities,
- Art. 233 of the Customs Code: extinction of the customs debt, e.g. due to invalidation of the customs declaration or confiscation of the goods.
In the case of the first two groups of cases, however, recovery is excluded in the event of gross or obvious negligence or an attempt to deceive.
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