Outward Processing Relief (OPR) is a customs procedure that allows EU traders to temporarily export free circulation goods from the EU for processing/repair in a non-EU country and then claim full or partial duty relief when the goods are re-imported. OPR also enables faulty goods to be returned to a third country for repair with re-import to the EU with reduced or nil duty liability. If the goods are irreparable and replaced then you may still be eligible for duty relief but VAT will be payable in full.
Duty and VAT
VAT is generally payable on all goods and services imported from outside the EU at the same rate that would apply to the goods or services if supplied in the UK. However, relief from customs duties and reduced import VAT may be available if the following conditions are met - and you declare them to have been met - at re-importation:
- the goods were in free circulation and temporarily exported from the EU
- it was made clear when the goods were exported from the EU that they were going to be re-imported after processing or repair by using the appropriate customs procedure code on the export declaration
- re-importation took place after the goods were processed, repaired, made up or reworked outside the EU
VAT will be due on the full value of the goods if:
- ownership of the goods is transferred
- the goods are deemed irreparable and replaced with a new item
VAT due on the value of the process or repair of the goods should be adjusted if the business has already accounted for VAT under the reverse charge procedure.
You can appoint an agent, who must be based in the EU or Turkey, who can enter your goods into free circulation. They must use your OPR authorisation number. It's crucial to keep written records of all exports and imports under OPR. If you use an agent, ensure they provide you with copies of all your import and export declarations for your records as you're responsible for ensuring they are correct. You are liable for all customs debts where an error is made concerning your customs declarations. A separate OPR authorisation from Turkish authorities is required if you're exporting goods for process from Turkey. To apply for Turkish OPR authorisation you're normally required to have a permanent establishment in Turkey.
Inward Processing and OPR
If your business handles Inward Processing (IP) goods but you then need to export them for further processing, this can be done under OPR. However, for your goods to be eligible for OPR once they have been re-imported, they must once again be placed in IP and not free circulation. You'll need authorisation under OPR and IP or to hold an integrated authorisation. You can see more detailed information in the Tariff Volume 3, Appendix E. Read more about exporting your goods from the EU to a third country, or see more detailed information on Inward Processing.