Inward and Outward Processing Relief (IPR and OPR)

Inward and Outward Processing Relief (IPR and OPR) are customs procedures that let companies import goods from abroad to carry out specific operations on them — such as manufacturing, repair or processing — without having to pay the customs duty and taxes normally due on import at the point of import.

Below is an outline of the IPR and OPR processes:

1. The IPR (Inward Processing Relief) process: IPR allows goods from outside the Union's customs territory to be imported in order to carry out one or more processing operations on them, for example manufacturing or repair. When the goods are imported, they are not subject to:

• Import duty
• Other import-related taxes, such as VAT and/or excise duty.
• Commercial policy measures.

2. The OPR (Outward Processing Relief) process: OPR allows goods to be temporarily exported from the Union to undergo processing or repair, and then re-imported with partial or full relief from customs duty.

3. Authorisation: to use the IPR or OPR procedure, authorisation from the customs authorities is required. The requirements for obtaining this authorisation include:

• Being established within the Union's customs territory.
• Providing adequate assurances that the operation will be carried out correctly.
• Providing a guarantee, in case a customs debt or other charges may arise.
• Carrying out the processing operation on the goods, or arranging for it to be carried out.

4. Payment of customs duty: if the processed products are released into free circulation, the company may apply to have the duty calculated at the rate and customs value applicable to the imported goods at the time their customs declaration was accepted. Otherwise, the import duty and VAT will be calculated at the rate and customs value of the processed products at the time they are released into free circulation.

5. Benefits of IPR and OPR: the benefits of IPR and OPR can be seen in the example of overseas sales of products resulting from processing and assembly in the EU of imported goods. For instance, of the €160 billion in motor vehicle exports from the EU in 2011, almost 43% (€69 billion) was made up of motor vehicles produced under the inward processing procedure — in other words, cars assembled in Europe from parts and components imported from the rest of the world. This example shows just how important the inward processing procedure can be for EU companies.