Inward Processing is a specific procedure within the European Union that applies to certain goods imported from non-EU countries for processing and then exported in a modified form. This process ensures that the goods in question are treated neutrally in terms of customs duties. As a result, these goods are exempt from customs formalities since they are only temporarily in the EU. This also eliminates the need for import sales tax, thus supporting the international division of labor and the companies involved.

Different Shapes

It takes various forms under EU customs legislation:

• Inward Processing - Processing: In this form, the goods retain their individual characteristics, but at least one of their original properties changes. An example is textiles that change color but remain the same in size, material and cut.
• Inward Processing - Processing: Here the goods remain intact, but are combined with other components to form a new product that cannot be separated. This results in the loss of their individuality. Agricultural raw materials processed into food products in the EU are a good example.
• Inward Processing - Repair: This refers to the repair of defective goods imported into Europe, such as replacing worn parts.
• Inward Processing - Use of Means of Production: This includes the use of various means of production to refine certain goods for export, receiving only their economic value without substantial modification.

Customs procedures

• Inward Processing - Non-Collective Procedure: This procedure ensures that imported goods imported for domestic processing remain exempt from import duties.
• Inward Processing - Refund Procedure: Under this procedure, import duties are levied on the goods in question. Upon proof of export, these duties are refunded.