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    Customs declarations - rectification of errors(Taxwatch (Tax news in english)) 

    08-09-2010 07:25

    Af Dorthe Higham

    Human errors are impossible to avoid. Consequently, it often occurs that companies use an incorrect customs procedure code – or makes other errors – when the customs declaration is filed with the customs authorities.

    Until now the Danish Tax authorities have been very reluctant to allow corrections of customs declarations. Even if it was obvious, that it was a “foot fault” committed by the company. This restrictive practice has thus often resulted in customs bills.

    A new ruling from the EC Court gives new hope.

    The ruling concerned a company which manufactures earth-moving machinery. The company imports various items which are incorporated into that machinery. The parts were imported under the inward processing procedure, which means that customs duties on the parts were suspended if the machinery were sold to customers outside EU, i.e. the part were re-exported out of EU.

    Upon exportation of the machinery the customs agent used the wrong customs procedure code by mistake. This caused the customs authorities to treat the imported parts as if they had been entered into free circulation in EU. Consequently the conditions for inward processing were not fulfilled which led to a customs debt. 

    The company applied for a permission to rectify the error, which was denied by the authorities.

    The EC Court decided in favor of the company and instructed the customs authorities to reimburse the customs duties. The court found that due to the fact that the company could prove that the machinery had been exported out of EU, the mistake had not put the procedure for inward processing in any risk.

    The Danish tax authorities have agreed with us that this ruling changes the practice, which the Danish tax authorities have followed up till now. However the Danish authorities emphasize that the ruling does not automatically cause a right to correct an error. The authorities will still make an individual judgment from case to case. 

    We recommend companies, which in the last three years have paid customs duties due to an incorrect customs procedure code – or another “foot fault” – to request the Danish tax authorities to make a revision of the company´s customs declarations in order to receive a reimbursement of the customs duties.

    Questions can be addressed to Dorthe Higham at dhi@bdo.dk



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