Outward processing relief (OPR) - overview

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Outward processing relief (OPR) - overview
  • Eligibility requirements
  • Inward Processing goods
  • VAT
  • Textiles
  • Miscellaneous aspects
  • Books and records
  • OPR conditions

Please note that the procedure outlined below ceased to be applicable when the Union Customs Code was introduced on the 1 May 2016. Please see theCustoms Union Code - Outward Processing Relief and other guidance notes in the Union Customs Code subtopic for more information on the current rules.

Notice 235 Outward Processing Relief (LNB News 26/11/2007 80); 2913/92/EEC, Articles 84-90 and 145-160 ; 2454/93/EEC ; OPR05000; De Voil Indirect Tax Service V17.137 (subscription sensitive)

OPR is intended to provide duty relief on goods imported from countries outside of the EU which have been produced using goods that originated from within the EU. This measure is intended to enable EU businesses to take advantage of cheaper non-EU labour costs or certain processing work, whilst ensuring that, where possible, EU materials are used to manufacture the goods.

Businesses importing goods from outside of the EU will normally be expected to pay import VAT and customs duty when the goods arrive. Businesses using OPR will be able to claim customs duty relief on the re-imported EU goods that have been exported for process or repair, providing the importer can provide evidence that the goods were used to produce or are incorporated into products that are being imported in the EU. Businesses must be authorised to use OPR before they start to export goods using this procedure.

The following provides anexample of the potential benefits of using OPR:

A business manufactures a chemical in the UK. This chemical is used to produce dishwasher tablets. In order to produce the finished product, the chemical needs to be combined with another chemical. This second chemical is not yet available in the EU so the business has to send its chemical overseas to America for the processing to occur. Once the processing has happened the finished dishwasher product is then returned back to the UK and the business re-imports the

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