Inward and Outward Processing Relief (IPR and OPR)

Inward Processing Relief (IPR) and Outward Processing Relief (OPR) are special procedures that let you process or repair goods without paying full duty up front: IPR for non-Union goods brought into the EU, OPR for Union goods temporarily exported outside the EU. Both require authorisation from the customs authority.

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Inward processing (IPR)

Under Article 256 UCC (text of the UCC on EUR-Lex), non-Union goods may be used in the customs territory of the Union in one or more processing operations without being subject to import duty, other charges provided for under other relevant provisions, or commercial policy measures (insofar as they do not prohibit entry or exit). Except for repair and destruction, the goods must be identifiable in the processed products. The extent to which VAT and excise are suspended follows from separate national rules (in Poland, the VAT Act exempts the import of goods placed under inward processing – Article 45(1)(1) – and the tax point may arise only when the procedure is closed – Article 19a(10a)), so the tax conditions must be checked before applying.

Outward processing (OPR)

Under Article 259 UCC, Union goods may be temporarily exported from the EU for processing or repair, and the resulting processed products may be released for free circulation with total or partial relief from import duty. The customs authority sets the period within which the goods must return to the EU as processed products. Goods repaired free of charge under a guarantee or because of a manufacturing defect may qualify for total relief from duty (Article 260 UCC).

Authorisation and security

To use IPR or OPR you need an authorisation from the customs authority (Article 211(1) UCC). Under Article 211(3) UCC it is granted to persons who:

• are established in the customs territory of the Union,
• provide the necessary assurance of the proper conduct of the operations,
• provide a guarantee where a customs debt or other charges may be incurred (see customs guarantee – what it is and when it is required),
• for IPR, use the goods or arrange for them to be processed.

The customs authority also sets the rate of yield (Article 255 UCC) and the period for discharge of the procedure (Article 257 UCC).

How duty is calculated when the procedure ends

If the processed products of IPR are released for free circulation, duty is in principle calculated on the tariff classification and value of the processed product. At the declarant’s request, however, the customs debt can be determined on the basis of the tariff classification, customs value, quantity, nature and origin of the goods placed under the procedure at the time the customs declaration for them was accepted (Article 86(3) UCC). Which option is better depends on the rates for raw materials and finished goods, so it is worth calculating both before declaring. General calculation rules are covered in how to calculate the customs value of goods.

The procedure in the United Kingdom

The UK has its own processing rules, separate from the EU’s. UK outward processing relief reduces customs duty and import VAT on goods exported from the UK for processing or repair and re-imported; it requires HMRC authorisation, and the applicant must be established in the UK and financially solvent (GOV.UK – Outward processing relief). Other special procedures are covered in How to use special customs procedures in the UK and The scope of special customs procedures.

Not sure whether your operation qualifies for IPR or OPR? Get in touch and we will review the goods, route and documents.

Frequently asked questions