Customs Legislation is represented on four essential elements.
- Transaction or use approved by the Customs
Customs Tax Calculation Criterion
Three fundamental criteria are taken into account when calculating the customs tax.
- Description of the goods (tariff classification) – Since the tax rate to be applied will differ according to the type and quality of the goods, the goods must be identified.
- Origin of the goods – It should be considered as the tax rate to be applied differs based on the country of origin.
- The value of the goods is essential in ascertaining the tax base on which the tax rate will be applied.
- It is an international tariff classification system
- It consists of 21 chapters, 99 chapters.
- Out of 99 chapters, Chapters 77 and 98 are reserved for future use in HS Nomenclature.
- It ranges from the raw material to the finished product.
- The first six digits are used in all member countries.
- Disputes are settled by the World Customs Organization.
- It is used in all foreign trade regulations.
- The value of goods based on customs tax includes transportation cost (freight) and insurance. CIF (Cost, Insurance, and Freight)
- The value is determined by applying Six valuation methods respectively.
- The next method is not passed until the previous method is finished.
- The currency is converted into Turkish Lira at the exchange rate on registration of the customs declaration.
Origin of the Goods
The origin of the goods is the economic identity of the goods, in other words, its economic nationality.
The Significance of Knowing the Origin of the Goods
Origin rules are a set of specific rules that define the country of origin of the article.
- The Origin of the Goods has a significant role to play in
- the calculation of customs taxes,
- monitoring the implementation of quotas, anti-dumping and similar tools used for foreign trade control,
- compiling foreign trade statistics.
Customs-approved Treatment or Use of Goods
In the Customs Law No. 4458, “Customs-approved Treatment or Use of Goods” means;
- a) the placing of goods under a customs procedure,
- b) their entry into a free zone,
- c) their re-exportation from the Customs Territory of Turkey,
- d) their destruction,
- e) their abandonment to the Exchequer
If in the same article of the Law in question Customs Procedure has been categorized under eight headings. These are as follows;
- Release for the Free Calculation,
- Transit Procedure
- Customs Warehousing,
- Inward Processing Regime,
- Processing under Customs Control,
- Temporary Import Regime
- Outward Processing Regime,
- Exportation Regime.
Out of these regimes; it is stipulated in Article 79 of the same Law that the following arrangements are “Customs Procedure with Economic Impact”:
- Customs warehousing,
- Inward processing,
- Processing under Customs Control,
- Temporary importation,
- Outward processing.
- Free zones shall be parts of the Customs Territory of Turkey however in which:
- goods not in free circulation are considered, for the purpose of import duties and commercial policy and import duties and currency regulations, as not being on the Customs Territory of Turkey, provided they are not released for free circulation or placed under any customs procedure or used or consumed under conditions other than those provided for in customs legislation;
- goods in free circulation availed of the opportunities related to the export of the goods, by virtue of being placed in a free zone. (Customs Law, Article 152).
Customs Territory of the Republic of Turkey
Article 2 of the Customs Law No. 4458 defines the Customs Territory of the Republic of Turkey as the territory of the Republic of Turkey including the territorial waters, the inland maritime waters and the airspace of Turkey and “The Customs Territory of Turkey” and “The Customs Territory” shall mean the Customs Territory of the Republic of Turkey.
- The transit procedure shall apply for the movement under the customs supervision, within the Customs Territory of Turkey from one point to another, of the goods;
- not released for free circulation and not subjected to import duties and other charges or to commercial policy measures,
whose customs formalities of exportation have been completed. (Customs Law, Article 84)
- The customs warehousing procedure allows the storage in a customs warehouse of:
- the goods not in free circulation, without such goods being subject to import duties or commercial policy measures,
the goods in free circulation being placed in a customs warehouse attracting the application of measures normally attaching to the export of such goods. (Customs Law, Article 93)
Inward Processing Regime,
It is an economically effective customs regime that aims to:
- increase exports and diversify export products,
- gain the competitive capability to export products in international markets,
and it allows
- the producer to import the raw materials, auxiliary materials, semi-finished products, finished products, intermediate goods, and packaging materials for use in the production of the export products
- the producer to import without paying customs duties and being subject to Trade Policy Measures
(Customs Law, Article 108)
Processing under Customs Control
The procedure for processing under customs control allows goods not in free circulation to be used in the Customs Territory of Turkey in operations which alter their nature or state, without their being subject to import duties or commercial policy measures, and allows the products resulting from such operations to be released for free circulation at the rate of customs duty appropriate to them. (Customs Law, Article 123)
Temporary Import Regime
The temporary importation procedure allows the use in the Customs Territory of Turkey, with total or partial relief from import duties and without their being subject to commercial policy measures, of goods not in free circulation intended for re-export without having undergone any change except normal depreciation due to the use made of them. (Customs Law, Article 128)
Outward Processing Regime
The outward processing procedure allows goods in free circulation to be exported temporarily from the Customs Territory of Turkey in order to undergo processing operations and the products resulting from those operations to be released for free circulation with total or partial relief from import duties. (Customs Law, Article 135)