Import duty refund: when and how to apply

You get EU import duty back when it was overcharged, when the goods were defective or not as ordered and leave the EU unused, when customs made an error you could not have spotted, or on grounds of equity [1]. You apply in writing to the customs authority of the Member State that notified the duty, within three years, or within one year for rejected goods [1] [2]. On a normal import the clock starts at release, which counts as notification when the duty equals the declared amount [1].

German customs says the most common case is a document that arrives after clearance, such as a proof of preferential origin [12].

The four grounds in the Customs Code

Article 119 needs an error you could not reasonably have detected and good faith on your side; a preference certificate wrongly issued by the exporting country's authorities counts, unless it rested on facts the exporter got wrong [1]. Equity needs a situation that is exceptional compared with others in the same trade [1]. A declaration for the wrong procedure or the wrong goods can be invalidated within 90 days of acceptance, and its duty repaid [1] [2]. How customs recovers duty afterwards, and from whom, is in wrong tariff code: who pays.

For every ground [1]: nothing under EUR 10 unless you ask, nothing where the debt results from your deception, and no interest unless payment comes more than three months after the decision. Customs repay overcharges they find themselves, and must test a failed application against the other grounds.

Origin proof that arrives after clearance

If the preference was not claimed because the proof was missing, the duty paid above the preferential rate is overcharged under Article 117 [1] [12]. When you apply, a tariff quota must not be exhausted, or in other cases the normal rate must not have been reintroduced [1]. The late proof must itself be valid under the agreement, as the next section shows.

An example: cotton T-shirts under CN 6109 10 00 pay 12 % without a preference [10], EUR 1,200 on a customs value of EUR 10,000. Turkish industrial goods in free circulation enter without duty when an A.TR shows their status [9], so a valid A.TR for that consignment makes the EUR 1,200 an overcharge [1] [5]. The free import duty calculator shows the difference for any code.

If the proof is on its way at import, customs can accept a simplified declaration without it; regular use needs an authorisation [1]. The document must then arrive within the period for the supplementary declaration, which customs can extend in justified cases to at most 120 days after release [1] [2].

A 2018 report by UNCTAD and the National Board of Trade Sweden put the tariff reductions EU importers forgo at 600 million euros a year, the largest unused share on imports from Switzerland, Turkey, South Korea and Mexico [15].

Which late proofs each agreement accepts

• United Kingdom. A claim not made at import still brings the excess duty back if it is made within three years of importation and rests on a statement on origin or the importer's knowledge [4]. See Importing from the UK.
• Switzerland, and Turkish farm, coal and steel goods. Both follow the revised pan-Euro-Mediterranean rules [7] [8]. A EUR.1 can be issued retrospectively within two years of export, and an origin declaration made out after export counts if it reaches EU customs within two years of the import [6].
• Turkish industrial goods. An A.TR can be issued after export where errors, involuntary omissions or special circumstances prevented it at the time, and a late A.TR is accepted where the goods were presented within four months of its issue [5]. See Importing from Turkey.
• GSP countries. A statement on origin made out after export counts if it is presented within two years of the import [3].

Defective or rejected goods

Duty is repaid when you reject goods that were defective at release, damage before release included, or that did not match the contract [1]. They must be unused, apart from what was needed to find the defect, and leave the EU, or with customs' permission go into inward processing, including for destruction, external transit, a customs warehouse or a free zone [1]. There is no repayment if the defect could have been found in testing under a special procedure before release, if it was reflected in the price, or if you sold the goods after finding it [1].

The deadline is one year [1]. Customs gives at most 60 days after its decision to complete export or destruction, and missing them loses the right unless unforeseeable circumstances or force majeure intervened [3]. A price reduction under the warranty, within a year of acceptance, for goods that were defective at acceptance lowers the customs value, and German customs treats the difference as overcharged duty [12].

How to apply

You apply as the person who paid or owes the duty, or as a successor [3]; a representative needs an authorisation, and receives the payment only if it says so [11]. Give the declaration's MRN, the customs office, the customs value, the amount and type of duty, the legal basis, the grounds and your bank details [2]. Customs can ask for the goods, or for evidence that they are the goods concerned [3]. It checks within 30 days that the application is complete and normally decides within 120 days [1]. An appeal against the duty itself stops the time limit while it runs [1].

• Germany. A written application to the Hauptzollamt that issued the duty notice, on Form 0223 in duplicate or as a letter with the same particulars, plus supplementary sheet 0235 for rejected goods [11].
• Netherlands. The signed form "Verzoek Terugbetaling of kwijtschelding van invoer- of uitvoerrechten", sent to Douane, Postbus 3070, 6401 DN Heerlen [13].

Import VAT is usually not the question

A business that uses the goods for taxed sales deducts the import VAT as input VAT [14], so for most VAT-registered importers the money worth recovering is the duty; see Import VAT.

Athren works next to the broker or customs team you already have, from the documents you already send them, and holds what it would have prepared next to the declaration that was filed, so you see where the code, the origin proof or the value differs.