All goods intended to be placed under a customs procedure, shall be covered by a customs declaration appropriate for the particular procedure.
Customs procedure means any of the following procedures under which goods may be placed in accordance with the UCC:
- Release for Free Circulation
- Export
- Special Procedures
- Transit
- Customs Warehousing
- Free Zone
- Temporary Admission
- End-Use
- Inward Processing
- Outward Processing
In Luxembourg, these procedures are handled electronically through the Luxembourg Customs Clearance System (LUCCS), with the exception of the Free Zone.
1. Release for Free Circulation
Release for free circulation is the main import procedure under the UCC and is the mechanism by which non-Union goods acquire Union status. The importer (or his representative) lodges an import declaration through the National Import System (NIS) within LUCCS. Luxembourg Customs verifies the tariff classification, customs value, origin of the goods, and compliance with any applicable prohibitions, restrictions or licensing requirements. Customs duties, import VAT and any other applicable taxes are assessed and collected before the goods are released.
Once released for free circulation, the goods become Union goods and may circulate freely throughout the customs territory of the European Union without further customs formalities.
2. Export
a) Permanent Export
The export procedure applies where Union goods leave permanently the customs territory of the European Union.
Export declarations are submitted electronically through the Automated Export System (AES) within LUCCS. Luxembourg Customs verifies compliance with export controls, sanctions, licensing requirements and any applicable prohibitions before authorising the export. Once the goods physically leave the customs territory of the Union, the exit is electronically confirmed, providing proof of export for customs and VAT purposes.
b) Temporary Export
Temporary export is the customs procedure that allows goods to leave the customs territory of the Union for a limited period of time with the intention of being re-imported in an unaltered state. Upon their return and release for free circulation, the goods may qualify for relief from import duties, provided the conditions of the temporary export procedure have been met. In general, the time limit for re-importation is three years, although customs authorities may extend this period in certain circumstances.
Common reasons for temporary export include:
· Goods sent for exhibitions or trade fairs
· Professional equipment used for work abroad
· Commercial samples or demonstration equipment
· Sporting or cultural equipment for events
3. Special Procedures
The Union Customs Code (UCC) groups several customs procedures under the category of Special Procedures. These procedures are designed to facilitate international trade by allowing customs duties and certain commercial policy measures to be suspended, deferred, or relieved while goods remain under customs supervision. As a result, they provide economic operators with greater flexibility and efficiency in managing the movement, processing, storage, and use of goods within the customs territory of the Union.
a) Transit
The transit procedure allows goods to move under customs supervision between customs offices without the immediate payment of customs duties, VAT and other taxes. Due to the fact that customs duties, VAT and other taxes are temporarily suspended when goods are released for Transit, the holder of the procedure is required to provide a guarantee.
(1) Union Transit
Union Transit is a suspensive customs procedure whose rules are defined by the Union Customs Code. It is applicable to movements of goods from one point in the EU to another. Its use is extended to movements of goods with Andorra and the Republic of San Marino following special agreements.
Union Transit movements are processed electronically through the New Computerised Transit System (NCTS), which is integrated into LUCCS.
There are different cases of Union Transit:
External Transit (T1)
External Transit (T1) is used to transport non-Union goods between the Member States of the EU (and Andorra and the Republic of San Marino) under suspension of import duties, VAT and other import charges.
Example: Bananas from Brazil are transported by truck under T1 from Luxembourg to their final destination in Paris.
Internal Transit (T2)
Under the internal transit procedure (T2), Union goods may be moved from one point to another within the customs territory of the Union, and pass through a country or territory outside that customs territory, without any change in their customs status of Union goods.
The movement shall take place in one of the following ways:
(a) under the internal Union transit procedure provided that such a possibility is provided for in an international agreement;
(b) in accordance with the TIR Convention;
(c) in accordance with the ATA Convention/Istanbul Convention, where a transit movement takes place;
(d) under cover of the Rhine Manifest (Article 9 of the Revised Convention for the Navigation of the Rhine);
(e) under cover of form 302 as provided for in the Agreement between the Parties to the North Atlantic Treaty regarding the Status of their Forces, signed in London on 19 June 1951;
(f) under the postal system in accordance with the acts of the Universal Postal Union, when the goods are carried by or for holders of rights and obligations under such acts.
Example: Cloth is transported under T2 from Germany to Italy via Switzerland. The transit procedure ends at their final destination in Italy.
Internal Transit (T2F) is used to transport Union goods between Member States of the European Union and special fiscal territories of the EU such as:
- the French Overseas Departments;
- the Channel Islands;
- Mount Athos;
- the Åland Islands;
- the Canary Islands.
Example: Bananas from Martinique are moved by vessel to Antwerp and then transported by road under T2F to their final destination in Paris.
(2) Common Transit
Common Transit results from the implementation of the Convention on a Common Transit Procedure between the EU and the other countries participating in the Convention.
Common Transit movements are processed electronically through the New Computerised Transit System (NCTS), which is integrated into LUCCS.
The other participating countries are:
- the Member States of the European Free Trade Association (EFTA):
- Iceland
- Norway
- Liechtenstein
- Switzerland
- Türkiye
- the Republic of North Macedonia
- Serbia
- the United Kingdom
- Ukraine
The Common Transit procedure (T1 for non-Union goods / T2 for Union goods) is used to transport goods under suspension of import duties, VAT and other import charges between the EU and the Common Transit countries, and between the Common Transit countries themselves.
Example
Electronic components from China are sent by truck under T1 from Germany to their final destination in Switzerland. The Common Transit procedure is used to transport goods directly to a customs office inside Switzerland, without having to present the goods to customs at the Swiss border.
(3) TIR (Transports Internationaux Routiers)
The TIR system is an international customs transit system established under the Customs Convention on the International Transport of Goods under Cover of TIR Carnets (TIR Convention, 1975). It facilitates the movement of goods by road between contracting parties while customs duties and taxes remain secured until the goods reach their final destination.
In practice, the use of the TIR system is accompanied by a TIR Carnet composed of a cover, a manifest and a variable number of vouchers according to the transport itinerary. The Carnet is presented to customs offices at each border crossing without the need to complete additional national transit procedures.
The TIR Carnet is reserved for road transport.
(4) Transit Simplifications
Certain simplifications may apply to transit procedures:
“Authorised Consignor” is an authorisation that allows operators to dispatch goods under transit directly from their own premises without presenting them at the customs office of departure.
“Authorised Consignee” is an authorisation that allows operators to receive goods under transit directly at their own premises without presenting them at the customs office of destination.
These simplifications reduce administrative formalities, improve supply chain efficiency, and facilitate the movement of goods under customs supervision.
For more information on the application/authorisation process, please refer to the Luxembourg Customs and Excise Administration’s website:
https://douanes.public.lu/fr/commerce-international/cdc.html
b) Customs Warehousing
The customs warehousing procedure enables non-Union goods to be stored in authorised customs warehouses without payment of customs duties, import VAT and the application of commercial policy measures.
Customs warehouses may be available for use by any person for the customs warehousing of goods ('public customs warehouse'), or for the storage of goods by the holder of an authorisation for customs warehousing ('private customs warehouse').
A customs warehouse allows the storage of non-Union goods for an unlimited period of time. Goods are placed under the customs warehousing procedure by submitting a specific customs declaration and the procedure is discharged by placing the goods under another customs procedure or under re-export.
The operation of a customs warehouse requires prior authorisation from the Customs and Excise Administration. To ensure payment of any customs debt that may arise in respect of goods placed under a customs warehouse, the provision of a guarantee is required.
For more information on the application/authorisation process, please refer to the Luxembourg Customs and Excise Administration’s website:
https://douanes.public.lu/fr/commerce-international/cdc.html
Examination and sampling of the goods by the holder of the goods, in particular in order to determine their tariff classification, customs value or customs status and all kinds of usual forms of handling designed to preserve the goods in good condition without changing their presentation or technical characteristics are permitted under the customs warehousing procedure.
NB: retail sale of goods placed in a customs warehouse is prohibited. Retail sale for distance selling, including via the Internet, is allowed.
c) Free Zones
Free zones are designated areas within the customs territory of the Union where non-Union goods may be introduced without being subject to import duties, import VAT and the application of commercial policy measures until they are assigned to another customs procedure or re-exported.
Currently, there is only one a free zone in Luxembourg located near Luxembourg airport: The Luxembourg High Security Hub (LHSH).
The LHSH offers safe and secure storage for works of art, precious metals, fine wines, antiques, jewels, documents and archives (physical and digital), collection cars, pharmaceuticals, rare minerals and other valuables.
Placement of non-Union goods into a free zone does not require the submission of a formal customs declaration but entry and exit notifications need to be lodged in a dedicated system. Luxembourg Customs are present at the LHSH and check physically all of the goods entering and leaving the LHSH. The free zone procedure is discharged by placing the goods under another customs procedure or under re-export.
Union goods may also be stored in a free zone, but are not considered as being placed under the free zone procedure.
Any operator wishing to carry out commercial activities in the free zone must obtain prior authorisation from the Customs and Excise Administration. As a general rule, no guarantee is required for placing the goods under the free zone procedure.
d) Temporary Admission
Under the temporary admission procedure non-Union goods intended for re-export may be subject to specific use in the customs territory of the Union, with total or partial relief from import duty, and without being subject to any of the following:
(a) other charges as provided for under other relevant provisions in force;
(b) commercial policy measures, insofar as they do not prohibit the entry or exit of goods into or from the customs territory of the Union.
The temporary admission procedure may only be used provided that the goods are not intended to undergo any change, except normal depreciation due to the use made of them.
Temporary admission with full exemption of import duties
The following goods can benefit from temporary admission with full exemption of duties and taxes on importation, under certain conditions specific to each type of good:
- pallets and their spare parts, accessories and equipment
- containers and their spare parts, accessories and equipment (under conditions)
- means of transport and their spare parts, accessories and equipment (under conditions)
- disaster relief material
- medical, surgical and laboratory equipment
- animals
- sound-, image- or data-carrying media and publicity materials
- professional equipment (under conditions)
- pedagogic materials and scientific equipment
- packings
- special tools and instruments
- goods used to carry out tests or subject to tests
- goods for events or for sale in certain situations
- samples
- personal effects and goods for sports purposes imported by travellers
- other goods imported in particular situations (under conditions).
The detailed list of goods and conditions to fulfil in order to benefit from temporary admission with full exemption of customs duties on importation is set by Delegated Regulation (EU) 2015/2446.
Temporary admission with partial exemption of import duties
The use of the temporary admission procedure with partial exemption from import duties may be authorized for goods that do not meet all the relevant requirements for total exemption of duties due on importation.
The amount of import duties to pay is then set at 3% of the amount of duties that would have been due for these goods if they had been released for free circulation.
This amount is due each month or fraction of month in which the goods are placed in a procedure for temporary admission with partial exemption of import duties.
The amount of import duties due on importation cannot be greater than what would have been due if the goods had been released for free circulation.
Practical procedure for temporary admission
The use of the temporary admission procedure requires prior authorisation from the Customs and Excise Administration. To ensure payment of any customs debt that may arise in respect of goods placed under temporary admission, the provision of a guarantee is required.
For more information on the application/authorisation process, please refer to the Luxembourg Customs and Excise Administration’s website:
https://douanes.public.lu/fr/commerce-international/cdc.html
Under certain conditions and in case of occasional use of the temporary admission procedure, an economic operator may also launch the related application by submitting the relevant customs declaration.
The duration of the temporary admission is the time needed to use the goods, and cannot in theory exceed 24 months. In exceptional circumstances, the customs authorities may grand an extension of reasonable duration upon justified application. The overall period during which goods may remain under temporary admission procedure shall not exceed 10 years except in the case of unforeseeable event.
ATA Carnet
In many cases, the movement of these goods can be facilitated via the use of an ATA Carnet.
The ATA Carnet is used to temporarily import or export goods, and transport them between the various countries that are part of the ATA Convention, which allows companies to make transactions with suspension of duties and taxes.
e) End-Use
The end-use procedure allows imported goods to benefit from preferential tariff treatment where they are intended for a specific prescribed use established under EU customs legislation.
The use of the end-use procedure requires prior authorisation from the Customs and Excise Administration. To ensure payment of any customs debt that may arise in respect of goods placed under end-use, the provision of a guarantee is required.
For more information on the application/authorisation process, please refer to the Luxembourg Customs and Excise Administration’s website:
https://douanes.public.lu/fr/commerce-international/cdc.html
Under certain conditions and in case of occasional use of the end-use procedure, an economic operator may also launch the related application by submitting the relevant customs declaration.
f) Inward Processing
Under the inward processing procedure non-Union goods may be used in the customs territory of the Union in one or more processing operations (manufacturing, processing, assembly or repair) without such goods being subject to any of the following:
(a) import duty;
(b) other charges as provided for under other relevant provisions in force;
(c) commercial policy measures, insofar as they do not prohibit the entry or exit of goods into or from the customs territory of the Union.
The use of the inward processing procedure requires prior authorisation from the Customs and Excise Administration. To ensure payment of any customs debt that may arise in respect of goods placed under inward processing, the provision of a guarantee is required.
For more information on the application/authorisation process, please refer to the Luxembourg Customs and Excise Administration’s website:
https://douanes.public.lu/fr/commerce-international/cdc.html
Under certain conditions and in case of occasional use of the inward processing procedure, an economic operator may also launch the related application by submitting the relevant customs declaration.
The inward processing procedure shall be discharged when the processed products, are placed under a subsequent customs procedure, have been taken out of the customs territory of the Union, or have been destroyed with no waste remaining or are abandoned to the State.
The authorisation is issued by the Luxembourg Customs and Excise Administration for a maximum period of five years from the date on which it takes effect. However, where the authorisation concerns goods referred to in Annex 71-02 to Commission Delegated Regulation (EU) 2015/2446, principally certain goods subject to EU agricultural-policy measures, its maximum period of validity is three years.
For example: a Luxembourg company is specialized in the sale of industrial robots modified for the needs of its customers. It buys the robots in Taiwan and then, after processing, sells them to a Swiss company.
If the company does not use the inward processing procedure, it must pay import customs duties when the robots arrive in Luxembourg.
The inward processing procedure allows the company to avoid paying import customs duties on robots that will be re-exported.
For a robot falling under Combined Nomenclature code 8479 5000 (import customs duty rate of 1.7%), the use of the inward processing procedure represents a saving of:
€12,000 × 1.7% = €204 per robot.
g) Outward Processing
Union goods subject to processing or repair outside of the customs territory of the EU, may be exported using the outward processing procedure.
Under the outward processing procedure, the goods are temporarily exported from the customs territory of the Union and, upon their return, are released for free circulation (re-importation). In this case, customs duties are generally payable only on the value added outside the Union rather than on the full value of the goods.
The use of the outward processing procedure requires prior authorisation from the Customs and Excise Administration. In general, the provision of a guarantee is not required (Exception: OPR IM-EX).
For more information on the application/authorisation process, please refer to the Luxembourg Customs and Excise Administration’s website:
https://douanes.public.lu/fr/commerce-international/cdc.html
Under certain conditions and in case of occasional use of the end-use procedure, an economic operator may also launch the related application by submitting the relevant customs declaration.
For example: a Luxembourg company is owner of an industrial robot & sends the robot to Taiwan for customisation before re-importing it back to Luxembourg.
If the company does not use the outward processing procedure, it will have to pay import customs duties upon the robot’s return to Luxembourg, calculated on its total value:
€13,000 (value of the robot + processing costs) × 1.7% = €221
By using the outward processing procedure, the company will pay import customs duties only on the value of the processing:
€1,000 (processing costs) × 1.7% = €17
For a robot falling under Combined Nomenclature code 8479 5000 (import customs duty rate of 1.7%), the use of the outward processing procedure therefore represents a saving of:
€221 − €17 = €204