Back
Bahar IZLADI
Incentive Specialist
Although the Outward Processing Regime is not as frequently and widely used as the Inward Processing Regime, it appears as one of the support elements especially for exporters. We can define the outward processing operation as the temporary export of goods in free circulation outside the Turkish Customs Territory or to free zones to be repaired, renovated or processed at a later stage, and the products obtained as a result of these processing activities are put into free circulation by applying full or partial exemption. It would not be misleading to say that it was prepared for the purpose of promoting the sale of export goods, provided that the basic economic interests of the producers in Turkey are not negatively affected as a result of these transactions.
With the external processing regime, cheap labor costs outside Turkey are utilized and technology and quality standards that do not exist in Turkey are utilized. In applications made to the Ministry of Commerce to obtain permission, it is useful to inform that the labor and technology to be performed abroad are not available in Turkey or the costs in this field in Turkey are very high. When this regime is used, it is ensured that the manufacturer repairs the imported goods and encourages the producers to use domestic products in their production, thereby reducing the transfer of foreign currency abroad for the final product.
According to Article 135 of the Customs Law No. 4458, the Outward Processing Regime is the regime in which the provisions regarding the temporary export of goods in free circulation from the Turkish Customs Territory to be subjected to outward processing activities and the re-entry into free circulation of the products obtained as a result of these activities with full or partial exemption from import taxes are applied.” is defined as. Other provisions regarding the regime are listed in articles 135 to 149 of the said Law.
Sub-regulations regarding the implementation of the regime were put into effect with the Outward Processing Regime Decision No. 2007/11864 and the Outward Processing Regime Communiqué No. 2007/5.
In this context, according to the nature of the activity within the scope of the outward processing regime;
- Outward Processing Permit Certificate (HIİB) issued by the General Directorate of Exports of the Ministry of Commerce for the goods to be sent for further processing.
- Outward Processing Permit (OPR) by the relevant customs directorate for goods to be sent for repair purposes.
- For the minerals to be sent for processing, an External Processing Permit (Hİİ) is required by the general secretariats of the exporters' associations to which the Mineral Exporters' Associations are affiliated.
It is given.
The maximum duration of the outward processing permit/outward processing permit is 12 (twelve) months. In addition, upon the reasoned request of the relevant company, an additional period of up to 1/2 of the original duration of the document can be given to the outside processing permit, and up to 12 (twelve) months can be given to the outside processing permission.
In applications to be made to the General Directorate of Exports of the Ministry of Commerce for the External Processing Permit Certificate (HIR), the petition, the External Processing Project, the Raw Material Consumption Table for the Processed Products Committed to Import, the Temporary Export List and the Imported Processed List, the Trade related to the company. Registry Gazette, Signature Circular, photocopies of the closing letters regarding the contract made with the manufacturing company that will carry out processing activities abroad and documents closed in the last three months, photocopies of the application letters regarding the documents for which closure applications have been made, and lists of export and import amounts within the scope of processing permits outside the commitment account that has not been closed. is being sought.
The commitment is fulfilled by bringing the processed product back to the Customs Territory of the Republic of Turkey in accordance with the document/permit conditions. Import can also be carried out by a company other than the company holding the external processing permit/permit. In this context, Value Added Tax is collected on all goods to be imported.
Companies holding an outward processing authorization certificate/permit are required to apply to the organization that issued the permit with the necessary documents within 1 (one) month from the end of the document period (including additional periods). If the closure application is not made within the specified periods, the documents/permits are closed ex officio by imposing sanctions by the relevant regional directorates/customs administrations.
Since the outward processing regime is followed manually, the import and export declarations opened must be checked before the HIIB/HII is sent for closure. In this control, first of all, the information obtained from the HİİB/HIİB and the commercial goods description, unit, GTIP, kilo, value and HİİB number on the declaration must be carefully examined, and any errors must be corrected before closing.
One of the most important factors to pay attention to in HİİB/HIİ is that the product sent temporarily during the transactions is returned in the same quantity and weight after being processed at the other party. To give an example from a textile product, if 1 piece of "cut trousers" weighing over 10 kg is sent as temporary export, 1 piece of "sewn trousers" weighing over 10 kilos must also be sent from the other country. These checks will also need to be completed completely before applying for document closure.
If more than one declaration is filed, it is also important to specify which temporary export declaration the products arriving at that time are related to, in line 44 of the Declaration of Entry for Free Circulation. If there are weight differences in the returned goods, these differences must be stated separately in section 44 and the reason for the weight difference must be explained in a petition during the closing phase.
After these checks are carried out, when an application for closure is made to the relevant regional directorate, it is mandatory to submit the original Outward Processing Permit Certificate, original customs declaration, Import List, Temporary Export List and Raw Material Consumption Table. However, the regional directorate may not request one or more of these information and documents.
The following sanctions are imposed on those who do not comply with the outward processing measures in accordance with the outward processing regime and the principles and conditions specified in the outward processing permit/outward processing permit:
If the products committed to be imported after being processed outside the Turkish Customs Territory or in free zones within the scope of the external processing regime are not brought to the country in accordance with the conditions and measures used in the document/permit, the goods temporarily exported for the production of these products must be brought back in the same state in which they were exported. Otherwise, the provisions of foreign exchange legislation and customs legislation apply. However, in case the temporary export goods exported within the scope of outward processing permit/outward processing permit are desired to be sent to another part of the Customs Union Customs Territory as a processed product after being subjected to the necessary processing activity, provided that an INF 2 information form is issued by the customs administration performing the export transaction. There is no need to bring back the processed product and the temporary export goods sent for the production of this product. In this case, for the goods subject to temporary export, the guarantees received in accordance with paragraph (4) of Article 13 of this Communiqué will be recorded as revenue or the tax not collected will be collected. In addition, the provisions of foreign exchange legislation apply to the export of these goods.
- If it is determined that more than the amount and value recorded in the document/permit have been imported, the tax arising from the import corresponding to this part will be collected as of the import date, in accordance with the provisions of the Customs Law No. 4458 and the Law on the Collection Procedure of Public Receivables No. 6183.
- In case the document/permit is cancelled, and if imports have been made within this scope, the tax not collected on this import will be collected as of the import date, in accordance with the provisions of the Customs Law No. 4458 and the Law on the Collection Procedure of Public Receivables No. 6183.
- If no import has been made within the scope of the document/permit, the tax, which is guaranteed or not collected in accordance with paragraph (4) of Article 13 of this Communiqué, will be collected as of the date of export, in accordance with the provisions of the Customs Law No. 4458 and the Law on the Collection Procedure of Public Receivables No. 6183.
- If no import has been made within the scope of the document/permit, the tax, which is guaranteed or not collected in accordance with paragraph (4) of Article 13 of this Communiqué, will be collected as of the date of export, in accordance with the provisions of the Customs Law No. 4458 and the Law on the Collection Procedure of Public Receivables No. 6183.
- In case the customs declaration and its annexed documents submitted during the closure are forged or falsified, the import tax within the scope of this declaration will be collected in accordance with the provisions of this article (Customs Law No. 4458 and Law No. 6183 on the Collection Procedure of Public Receivables). Legal action will be taken against those concerned. and the company holding the document/permit will not benefit from the external processing regime for 1 (one) year.
- Natural and legal persons who do not comply with the Communiqué No. 2007/5 and the circulars published pursuant to this Communiqué, make wrong transactions, act without recording the necessary confirmation in the original copy of the documents/permits belonging to the relevant person, provide misleading information and cause tax loss or delays in the collection of tax for these reasons, is jointly and severally responsible for the payment of the receivable that cannot be received from the principal debtor. In this context, public receivables are collected in accordance with the provisions of this article, Customs Law No. 4458 and Law No. 6183 on Collection Procedure of Public Receivables, taking into account the delay period.
If the goods temporarily exported within the scope of an outward processing permit/outside processing permit are brought back in the same condition after the expiration of the period, an irregularity penalty is applied only in accordance with the provisions of the Customs Law No. 4458.
SOURCE
Customs Law No. 4458
Outward Processing Regime Communiqué No. 2007/5
Central Anatolia Exporters Association official site (https://www.oaib.org.tr/tr/)
Official site of Istanbul Madem and Metal Exporters Association (https://www.immib.org.tr/tr/)
QUESTIONS AND ANSWERS
Question 1: What is External Processing Regime?
Answer: It is the regime in which the provisions regarding the temporary export of goods in free circulation from the Turkish Customs Territory to be subjected to outward processing activities and the re-entry into free circulation of the products obtained as a result of these activities with full or partial exemption from import taxes are applied.
Question 2: What are the benefits of the External Processing Regime?
Reply :
• Benefiting from cheap labor costs outside Türkiye,
• To benefit from technology and quality standards that do not exist in Turkey,
• Ensuring that the manufacturer carries out the repair of the imported goods,
• To encourage manufacturers to use domestic products in their production, thus reducing the import taxes to be paid for the final product.
Question 3: What are the conditions to benefit from the external processing regime?
Answer: In order to benefit from the outward processing regime, the basic economic interests of producers in the Turkish Customs Territory must not be negatively affected. This situation is examined by the authority issuing the permit/permit in the context of sector analysis.
In order to benefit from the regime, it must also be possible to establish that the temporary export goods are used in the production of processed products. To ensure this, identity determination is made by the customs administration. Identity detection is achieved by examining documents such as the serial number, label, sample and technical documents, analysis report, contract and invoice of the goods subject to the regime.
Question 4: Where to apply for Foreign Processing Permit/Permit?
Reply :
Outward Processing Permit Certificate (HIİB) issued by the Ministry of Commerce General Directorate of Exports for goods to be sent for further processing.
Outward Processing Permit (OPR) by the relevant customs directorate for goods to be sent for repair purposes.
For the minerals to be sent for processing, an External Processing Permit (HIİ) is issued by the general secretariats of the exporters' associations to which the relevant Mineral Exporters' Associations are affiliated.
Question 5: What are the documents and information required when applying for an Outward Processing Permit Certificate / Closing the Permit?
Answer: During closure, it is mandatory to submit the original Outward Processing Permit Certificate, original customs declaration, Import List, Temporary Export List and Raw Material Consumption Table. However, the regional directorate may not request one or more of these information and documents.
