Back
Ebru AĞAÇBACAK
Deputy Customs Consultant
Both developed and developing countries are making great efforts to increase exports.
Unemployment, foreign competition and technological race manifested in the world economy have made it necessary to develop export incentive measures. In this context, the Inward Processing Regime (DIR), which is a government incentive, stands out as an incentive regulation that is used for businesses to grow, open to international markets and export, in addition to its contributions to the economic development of the country.
Inward Processing Regime (DIR) is an economically effective customs regime that allows businesses in the manufacturing sector to procure raw materials at world market prices in order to increase their competitiveness in international markets, expand their markets and increase product diversity. The inward processing regime is based on the principle of temporary import of goods that are not in free circulation to be subjected to processing within the Turkish customs territory and the re-export of the processed product obtained after the processing activity.
In accordance with Article 110 of the Customs Law No. 4458 and Article 5 of the DIR Communiqué No. 2006/12; Companies located in the Turkish Customs Zone (excluding free zones) that carry out or have processing activities carried out can benefit from this regime. To benefit from the regime; It is essential that it is possible to detect that the imported goods are used in the processed product, that the economic interests of the producers in the Turkish Customs Territory are not negatively affected, that the business activity creates added value, and that the processed product is competitive.
During the import of raw materials, semi-finished products, finished products, auxiliary materials and packaging materials imported for use in the product to be exported within the scope of DIR, VAT, SCT, Customs duty, Anti-Dumping and other taxes and funds are guaranteed. Along with the opportunity to pay the guarantee at a discount, there is an exemption from taxes, duties and charges with KKDF, VAT exemption for domestic purchases, sales and delivery opportunities for the country considered as exports, and trade policy measures are not implemented. Exemptions provided vary depending on the use of conditional exemption and reimbursement systems.
Regulations regarding DIR are basically included in Articles 108-122 of the Customs Law No. 4458, Export: Inward Processing Regime Communiqué No. 2006/12 and Inland Processing Regime Decision No. 2005-8391. The permissions obtained are given in two ways: "Internal Processing Permit" and "Internal Processing Permit Certificate", depending on the production subject and application principles. Both documents are issued by the Ministry of Commerce. Inward Processing Permit (DII); Inland Processing Permit Certificate (DIIB) is a permit given by customs directorates that allows customs-free imports for export purposes; It is a document issued by the General Directorate of Exports that allows customs-free imports and/or domestic purchases for export purposes.
Inward Processing Regime application systems are divided into two: Conditional Exemption System and Reimbursement System.
Conditional Exemption System; It is the importation or domestic supply of taxes arising during the import of raw materials, auxiliary materials, packaging and operating materials used in the production of goods to be exported, without being subject to trade policy measures, and the return of the guarantee received following the export of the goods obtained as a result of production.
The Reimbursement System is; It is the importation of taxes arising during the import of raw materials, auxiliary materials, packaging and operating materials used in the production of goods to be exported, by paying them in cash and applying trade policy measures, and refunding the taxes collected in cash following the export of the goods obtained as a result of production.
Companies located in the Turkish Customs Zone (excluding Free Zones); In order to obtain DİİB, they must apply to the General Directorate of Exports via the DİR Automation System with the electronic signature (e-signature) method, in accordance with the provisions of the Communiqué No. 2007/2 on the Carrying out of Transactions Related to the Inward Processing Regime through Computer Data Processing. As a result of the review, DİIB applications are approved or rejected.
Application for Inward Processing Permit is made by the obliged parties via the Single Window Portal System (https://uygulama.gtb.gov.tr/TekPencere). If the application is deemed appropriate, the application for inward processing permit is approved by the customs director or the person authorized by him via the Single Window Portal System, and the system generates an e-document with the code 0878 (TPS-Inland Processing Permit) and a 23-digit number for this document.
The 23-digit document number/document line number given by the Single Window System (Example: Reference No: 16545419880849000000392/1) is declared in the "Document Reference No" and "Document Date" fields in box 44 of the relevant customs declaration. In the customs declaration regarding the Inward Processing Regime, the line number regarding the inward processing regime is written after the 23-digit e-document number, and in the customs declaration regarding the re-export of goods subject to the inward processing regime, the line number regarding re-export is written after the 23-digit e-document number. Since the information regarding the document in question will be available electronically, internal processing permission with a wet signature on paper is not required as an annex to the declaration.
Following the fulfillment of the document/permit commitments within the deadline, an application is made to close the document/permit commitment account within the periods specified in the notification.
In order to close the DİIB export commitment, an application must be made to the relevant regional directorate determined by the General Directorate of Exports, within three months from the end of the document period, electronically and at the same time with the information and documents specified in the annex of the communiqué numbered 2006/12. No additional time is given for DİIB closure.
In order to close the DİI export commitment, an application must be made to the relevant customs directorate with the information and documents specified in the annex of Communiqué No. 2006/12, within one month from the end of the permit period at the latest. An additional period of 20 days may be given at the end of a month to close the DIB commitment.
Documents/permits for which no application for closure has been made within the specified periods are closed ex officio by imposing sanctions by the relevant regional directorates or customs administrations.
Before applying for inward processing permit/permit certificate commitment closure, a detailed study on the commitment account should be carried out at least one month before the end of the document/permit period. It is very important to compare the information and documents in the DIR automation system for the document and the single window system for the permit with the actual information and documents. In order for this comparison to be made, the document/permit user must keep track of all information along with the system through a separate system or program. Since both the DIR automation system and the single window system are electronic systems, some calculation errors may occur, although rarely. In addition, manual monitoring will be advantageous in detecting, resolving, and preventing recurrence of these errors.
Missing export document, incorrectly opened customs declaration, incorrectly opened import/export invoice, incorrectly opened domestic purchase/domestic sales invoice, circulation documents that were not issued when they should have been issued, incompletely deposited compensatory tax (TEV), underdeclared wastage rate, secondary processed product or unit usage rate, unregulated expertise report in case of special conditions, inventory minutes, certified public accountant report, equivalent goods control for agricultural products, product weights declared below or above the required amount, foreign exchange usage rate above the required level on a sectoral basis, etc. If the deficiency in the information and documents showing that the imported raw material, auxiliary product or semi-finished product is used in the exported product is detected in the examination carried out one month before the end of the document/permit period, it will be possible to correct the errors or eliminate the deficiencies.
If it is understood in the preliminary examination that there is no deficiency or incorrect document regarding the document/permit, an application for closing the commitment is made with the information and documents in Annex-3 of the Inward Processing Regime Communiqué No. 2006/12 and Annex-4 for the permit.
If there are conditions such as property determination, expert report, sworn financial advisor report in the special conditions of the document, these documents must be submitted completely in the closing file. It is especially important that the expert report be within the document period. For this reason, the commitment completion procedures that must be carried out within the scope of the document (such as incomplete exports, imports with equivalent goods, consumption control) must be completed at least one month before the end of the document period, so that it is possible to complete the expert report within the document period.
If exports are made to free zones within the scope of the document; The exported product must be exported from the free zone to another country within three months at the latest from the expiration of the document or brought back to the Turkish Customs Territory within the scope of an inward processing permit/permit or investment incentive certificate. If the mentioned product is not to be exported, it is stated that it is used in the construction of the facilities located in the free zones, it is used as machinery-equipment, registered goods or parts of these in the facilities located in the free zones, it is delivered to the companies engaged in shipbuilding activities located in the free zones for use in ship construction, and it is transferred from the free zones to duty-free stores. It is required to prove that it has been sold or delivered as provisions to land, sea and air vehicles from free zones. Proving that the goods have been subjected to any of these procedures within three months is possible with free zone entry-exit transaction forms and preliminary status documents. For this reason, the originals of these documents must be included in the contract closing file.
The special conditions in the TPS file are very important in the closing of leave commitments. Here, the customs administration that gives permission to determine whether the imported raw material, auxiliary product or semi-finished product is used in the exported product shall use the "goods determination report", "expertise report", "photographed goods", "laboratory analysis report", "sample taking" or "goods determination report". It is requested to do this with any of the "determination of engine and chassis numbers" options. This option is determined by customs offices depending on the subject of production and the type of products. In the application for closing the commitment, it is very important that the property option included in the special conditions of the permit is applied correctly in order to close the commitment without sanctions.
Within the scope of DIR, if the document/permit measures are not complied with and the commitments are not fulfilled or the commitment is closed due to incompleteness or errors, the following sanctions are applied.
- If the Inward Processing Permit Certificate is canceled or closed ex officio, any uncollected taxes on imports within the scope of the document will be collected.
- If the foreign exchange usage rate within the scope of the document is exceeded, discounted coverage will not be applied to this company for 6 months from the date deemed appropriate by the Ministry of Commerce. In case of ongoing violations of companies on the same issue, the guarantee rate is determined as twice the tax arising from imports, starting from the date deemed appropriate by the Ministry.
- Taxes that exceed the import amount recorded on the document/permit and correspond to the unrevised portion and are not collected at the time of import will be collected twice.
- According to Article 238/1-a of the Customs Law No. 4458, in case of violation of the provisions regarding the inward processing regime, an administrative fine of twice the customs value of the goods is imposed.
- Regarding the goods whose regime provisions are violated but are under customs supervision, if the goods are not subjected to another customs-approved transaction or use within 60 days from the date of notification to the taxpayer, a fine equal to the customs duties of the goods will be imposed.
- Prosecution is carried out and a public lawsuit is filed in accordance with the provisions of the Anti-Smuggling Law No. 5607 regarding the goods that are determined not to be used within the scope of the exported product within the scope of the document/permit. According to the 4th paragraph of the 3rd article of the said Law, any person who acts as if the goods brought into the country within the framework of the inward processing regime were taken abroad by fraud, is punished with imprisonment from one to three years and a judicial fine of up to five thousand days.
As we mentioned at the beginning, DIR stands out as an incentive regulation that provides convenience to our exporters. However, it is important to strictly comply with the regime requirements, and violation of the regime is punished with heavy sanctions.
SOURCE
Customs Law No. 4458
Inward Processing Regime Communiqué No. 2006/12
2005/8391 Inward Processing Regime Decision
Anti-Smuggling Law No. 5607
Ministry of Customs and Trade, General Directorate of Risk Management and Control, letter numbered 7342105-106.05-00015617966 dated 04.2016
QUESTION ANSWER
Question 1. Who can benefit from the Inward Processing Regime?
Answer: In accordance with the Customs Law and the DIR Communiqué, companies located in the Turkish Customs Zone (excluding free zones) that carry out processing activities or have them carried out can benefit from this regime.
Question 2. What is the purpose of the Inward Processing Regime?
Answer: By procuring raw materials at world market prices; encouraging exports (increasing exports), creating employment, giving competitiveness to export products in international markets, developing export markets, diversifying export products, making export products attractive in foreign markets, increasing competitiveness by reducing input costs, providing cheap raw material resources, providing sufficient resources within the country. To enable domestic companies to increase quality by giving importance to production and to open up to the international market, as the availability of poor quality raw materials in the international market creates competition.
Question-3: Where to apply for Inward Processing Permit Certificate/Permit?
Answer: The application authority for both documents is the Ministry of Commerce. To obtain a "document", via electronic signature (e-signature) method, via the DIR Automation System, to the relevant sector office of the General Directorate of Exports; In order to obtain a "permit", it is necessary to apply to the customs directorate where the import will be made via the Single Window System via the e-application system.
Question 4. What are the exemptions provided by the Inward Processing Regime?
Answer: During the import of raw materials, semi-finished products, finished products, auxiliary materials and packaging materials imported for use in the product to be exported within the scope of DIR, VAT, SCT, Customs duty, Anti-Dumping and other taxes and funds are secured, and the obliged party has the opportunity to benefit from discounted guarantee. , There is an exemption from taxes, duties and charges with KKDF, there is a VAT exemption for domestic purchases, there is the possibility of domestic sales and delivery considered as exports, and trade policy measures are not applied to imported goods within the scope of DIR.
Question 5. When and where should the application for document/permit commitment closure be made?
Answer: In order to close the document export commitment, an application must be made to the relevant regional directorate determined by the Ministry within three months from the end of the document period at the latest, and to close the permit export commitment it is necessary to apply to the relevant customs administration within one month from the end of the permit period at the latest. An additional period of twenty working days may be given at the end of a month to close the "leave" commitment. However, there is no such additional period for closing the "document" commitment.
