The territory at customs for storage, use and processing of imported goods by a resident without economic sanctions and payment of duties for a certain period of time is called a free customs zone. Provided for goods that, after being brought into the territory, are subject only to the free regime and the procedure of customs warehouse. In the process of customs processing and processing, products retain their foreign status.
General conditions of the customs zone
If the goods have the status of restrictions on import through the border due to economic sanctions, then they are placed in a free customs zone without the control body receiving an import permit or an appropriate license. Products receiving restrictions on movement for non-economic reasons are not placed without permission and license.
A special customs procedure is provided for each product, according to which only a resident of the free zone stores, uses and processes foreign goods in the customs zone allocated to him. He provides the customs authority with documentation defining his rights as a resident and declarant of the customs zone. The resident, after importing the products under the customs procedure, ensures its placement without violating the condition of the goods prescribed in the certificate upon placement. Change in the condition of products is allowed in case of natural quantitative or qualitative changes, subject to all the prescribed storage conditions.
Duration of goods in the free economic zone
The time spent by the product in the customs zone is limited by the period when the free customs zone is in place or the person has resident status. Within the agreed time, the customs control authorities identify the products, and the declarant carries out high-quality accounting of goods stored and processed. The customs free territory procedure is completed after the end of the zone’s existence or after the resident loses his rights. This rule applies to products exported abroad to the area of the Customs Union.
Conditions for obtaining preferences and benefits for declarers of free zones
For goods undergoing processing under customs conditions using foreign goods, similar rules apply. When using the special SEZ regime, individual entrepreneurs and persons with legal status are registered with the administration and receive the rights of a resident of the economic zone. They fulfill certain conditions:
- Before applying for registration, a person must undergo registration of a business entity;
- an agreement on a free customs zone provides that business is carried out within the boundaries of the customs territory;
- a person registering as a declarant submits for consideration an investment project that has an investment of 1 million euros or more;
- the direction of the investment project provides for the development or creation of production oriented towards import or export substitution.
Taxes for declarants of the economic free zone
In particular, the work of declarants includes the payment of the following taxes:
- taking into account the rate for the type of activity stipulated by the government, the resident pays income tax in the amount of 50%, but payment at the rate of not more than 12%.
- the declarant pays value added tax in the amount provided for in the tax law;
- declarant pays excise taxes;
- pays real estate tax or makes appropriate payments according to law;
- makes payment of tax on the environment, for the removal of natural resources, land tax;
- pays patent and state fees;
- pays offshore, customs and stamp duties;
- makes the payment of local taxes and fees.
Tax exemption of a resident
In some cases stipulated by law, part of the payments is withdrawn from the declarant:
- after the sale of products and services of their own production, which are declared profitable for five years, the resident does not pay income tax;
- if the property of a resident is registered on its territory by a free customs zone, then property tax is excluded from payments.
Types of activities of residents to which privileges do not apply:
- catering enterprises;
- electronic games, gambling activities;
- purchasing and trading activities;
- purchase and sale of securities;
- production activities of a resident with the use of funds on the balance of the fixed assets or the use of labor of employees of a resident's enterprise outside the customs territory;
- insurance and banking.
Free zone and simplified tax system
The regime of the free customs zone provides that the simplified taxation system is not applied to residents of the FEZ. On the free economic territory, a special customs zone is formed where the products previously placed there or processed there are located before being sent to the territory of Russia.
Goods placed in the SEZ or obtained as a result of processing are placed in a zone with a free customs regime. Products are exempted from import duties and excise duties of customs, VAT tax, restrictions on the importation and dispatch of goods with economic restrictions are lifted, if the cargo meets the following conditions:
- is carried out by the declarant at his own enterprise using the works and services of his farm from raw materials, materials, semi-finished products and components, drawn up on a toll basis;
- the category of goods refers to import substitution products.
Free warehouse
The customs regime of the free economic zone creates a room or limited space called a free warehouse on the territory of the customs section. Foreign goods are placed on the square, without levying duties, economic sanctions and taxes. Russian products are stored on a shipment basis in accordance with the export customs regime.
The free warehouse area is designed and equipped within the framework of certain requirements for customs control. Sometimes reinforcement of locking devices is required, control over one of them belongs to Russian customs officers. Under certain conditions, only Russian entities own a warehouse in accordance with labor laws.
Responsibilities of the Free Warehouse Holder
The owner prevents the seizure of any products of the free warehouse, in addition to customs control. Does not interfere with control checks by customs officers. It complies with the licensing conditions for the maintenance of a free warehouse, which are determined by the customs procedure. A free warehouse is open for customs authorities to access products; free premises and equipment for the work of these officials are provided on the territory.
In free warehouses, commercial and industrial operations are allowed, and retail trade is not allowed. The shelf life of the goods does not exceed three years. The entry of imported goods into the free warehouse area is not subject to duties, taxes or economic penalties. Sending products from a free warehouse to the rest of the Russian wash zone and outside the country is subject to payment of taxes and duties. Economic sanctions are applied depending on the category and production of the goods.
In the absence of a certificate, a different customs procedure is provided. The free customs zone considers such goods as products manufactured by a Russian manufacturer for the collection of taxes and duties. If other goals are pursued, the products belong to the import category.
The concept of re-export of goods
This regime includes the situation when the countries of the customs union import goods into the Russian territorial customs zone that are sent further without taxes and duties or with payment, but with subsequent return. In this case, prohibitions and sanctions of an economic direction do not apply. The provisions are spelled out in the law of Russia on the federal regulation of foreign trade.
The re-export regulation was introduced to determine the rights and authorities to return customs amounts and to find the conditions for their reimbursement after paying the previous tax when importing the re-exported group to the territory of Russia. The use of the regime is lawful in identifying products with manufacturing defects. Re-export refers to the final procedure and transfers the goods to the full disposal of the person who placed them in this category.
Imported goods are placed in re-export mode, they include products delivered to the territory of Russia in violation of import bans in accordance with the legislation of the country. For free trade goods that have defects or inconsistencies on the day of crossing the border, a different customs procedure applies. The free customs zone in the rules provides for their return to the supplier. Such products shall be re-exported if:
- defects and discrepancies are not eliminated on the territory of Russia, and the products are not used, with the exception of cases where the use of goods serves to identify defects;
- identification of goods is carried out by customs authorities;
- products are dispatched within six months from the date of release for free circulation.
Return of goods is made in accordance with the developed mechanism. The re-export regime in this case is not applied, since at the time of production for free circulation the amounts of re-export were paid by law, which does not give them the right to relate to excessively paid. But the declarant, by right of return of customs duties, declares their return, but not in a three-year period, but only for a period of 1 year.
The concept of re-importing products
Reimport is a special customs procedure in which products shipped from the customs zone of Russia are again imported into the free territory. In order not to pay taxes, duties, and not to apply economic measures of influence, these two events occur on time. In other words, a re-import regime exists for the return of goods to the customs Russian territory after it was previously exported. In addition, the regime includes the return of taxes and duties paid earlier.
To determine the goods in the re-import group, a number of conditions are met. When exported from customs, the goods are in free circulation or received after processing of imported goods. Re-importation is carried out if the products are declared for placement in the regime within three years after delivery upon departure from the territory of the free zone. For construction and industrial equipment, the territorial federal service extends this time at the request of the interested person.
The condition for placement in the re-import mode is the preservation of the initial state of production, the exception is the natural decrease in the quantity. At the same time, the free customs zone allows these changes if the normal conditions of transportation, transportation and operation are observed. For goods paid all the required amounts of taxes, customs duties, subsidies and other duties.
Payable Payments
- Amounts of import duties, taxes, interest on these amounts, if they were not collected or returned due to the export of products from Russian customs.
- The size of the amount of subsidies, taxes and duties that are required to be paid by the free customs zone of the Russian Federation, received directly or indirectly, benefits in connection with the shipment of goods from the territory of the Russian zone.
Association in customs unions
To conduct a more efficient customs policy, two or more countries form a customs union. The association cancels customs taxes in trade relations between the contracting states. The customs territories of the Union countries are combined into a common free zone. All customs duties, taxes and duties are standardized and accepted in single payments for all union states.
The organization of partners provides unhindered transportation of goods across any section of the common customs territory. In capitalist states, the customs union establishes, regulates the size of tariffs for the carriage of goods and discriminates against those countries that are not members of the union of the customs union. Inside the joint customs zone, the association’s members eliminate all barriers to the movement of goods, and a monopoly policy is being pursued in relation to other countries. This is manifested in the tightening of customs formalities, certification conditions, import tax, compensation fees, etc.
The countries that are members of the union approve the Commission as the current body for regulating the borders of territories, restrictions, economic sanctions, anti-dumping measures, and protective provisions. The commission and the countries of the customs union that are members of the coalition form legal issues, establish customs tariffs, codes, and statuses.
Crimean Economic Free Zone
It represents an advantageous offer for investors with a large number of applicable preferential conditions, among which are noted:
- no taxes on property of enterprises for up to 10 years;
- income tax for the first three years of operation is two percent;
- 2015-16 are marked by simplified taxation in terms of the tax rate, which in subsequent years will increase to 4%;
- the free customs zone in Crimea provides for several types of benefits in matters of insurance payments, in the next decade the rate will be 7.6%.
Free economic territory in the Kaliningrad region
Any person with the legal status of Russian or foreign citizenship who makes investments in the economy of the Kaliningrad region and the region becomes a resident of the customs zone. The free customs zone in the Kaliningrad region provides residents with certain tax benefits:
- after registering the company for six years, no taxes;
- from the 7th year of operation, a tax rate of 50% of the total rate in Russia is applied to the manufacturing enterprise;
- for preferential taxation it is enough to register the status of a legal entity in the Kaliningrad region, obtaining resident status is not necessary;
- Entrepreneurs registered in the region import products without paying customs duties, but a number of excisable goods do not fall under this requirement.
In conclusion, it should be noted that free economic zones are created for high-tech and manufacturing industries and economies, for the production of new products. The application of the above procedures is very attractive for serious business. This is due to the fact that when releasing goods on free sites, imported components and raw materials are used, while there is exemption from customs duties, lack of deposit and non-tariff regulation.
