Active finishing in Germany (the complete route)

In the meantime, it is normal for many Swiss to make weekly purchases in German cities close to the border, such as Konstanz, Weil am Rhein, Waldshut or Singen. We get groceries and many other products in neighbouring Germany much cheaper and certain products are not available in Switzerland anyway. So why not apply this principle to the repair and conversion of vehicles or machines? In this way, lower material costs and lower labour costs can benefit equally. In addition, there are simply no suitable specialists for some treatment plants and models in Switzerland, as many Swiss have already noted. The so-called inactive finishing makes it possible.

But there are also pitfalls in the processing of goods and vehicles in Germany. This article is about how the so-called "active finishing" works exactly, how expensive it is, what costs it entails and where the risks lie.

Car parts for the active finishing of a vehicle

What is inward finishing or outward finishing?

But what is actually meant by active finishing (AV)? This is a customs procedure enshrined in the Union Customs Code (UCC) of the European Union. Roughly summed up, this involves the temporary importation of goods or vehicles from a non-EU country such as Switzerland for processing in the EU, with the value of these goods usually increasing after treatment. The vehicle or goods are thus "refined".

Whenever we talk about active finishing in this article, it is about active finishing in Germany. It is the case here that, from the point of view of Swiss customs, we are actually carrying out outward processing abroad, but from the point of view of EU customs it is an inward processing, as the processing is actively carried out in the EU. This should therefore not be confused with active processing in Switzerland.
This would be a processing of EU goods in Switzerland, i.e. from an EU point of view, a passive processing. Therefore, when we have questions, for example.B to the customs office, we must always be careful to mention the correct procedure. Otherwise, the customs officer will not be able to help us, because he is assuming a different situation.

When is the inward processing procedure to be used?

Here are some examples of when we need to declare the inward processing procedure for customs clearance and when we do not.

Example 1: If we drive.B our motorhome from Switzerland to Germany for example in order to have a towbar attached there, from the EU point of view it is an AV (active finishing) and from a Swiss point of view a passive finishing. The reason for this is that the value of the motorhome is later higher, since the vehicle now has a towbar. It would therefore be necessary to declare inward processing in advance at the German customs offices and to the Swiss customs offices the customs procedure for outward processing of wages. "Wage" refining because a work is carried out here, which is paid financially.

Let's take another example: we drive our car to Germany to have a "service" done there, i.e. a simple vehicle inspection, in the frame of which oil is then refilled.B. and tires are replaced (whereby the old tyres are disposed of). There is no increase in the value of the vehicle, as these are only life-sustaining measures. Without service and without new tyres, the car will no longer drive at some point, so we MUST do this work. Without an increase in value, therefore, there is no inward processing and the procedure should therefore NOT be applied, since in this particular case we can enter Germany temporarily by vehicle, so to speak, as a tourist in travel without having to declare this under customs law (provided we transfer the vehicle on our own axle). It is important here that we may not buy new rims or similar accessories,.B for example, as these are not life-sustaining measures, but are clearly an increase in value. Otherwise, an active finishing would have to be registered again.

Another example: We want to bring a machine or a vehicle engine (without a vehicle) to Germany, as it no longer works. This is now to be made operational again. In this case, one might think that these are life-support measures, so that no inward processing would have to be notified. In this case, however, this is wrong, as we cannot bring the engine to Germany in travel. This is therefore an active finishing again, since the motor is transported (charged).

What happens if I do not use the inward processing procedure?

Many are now wondering whether they really need to use the inward processing procedure when it is so complicated and comes at additional cost. One might also wonder how customs want to know that the vehicle has been processed in Germany in a value-increasing manner. In fact, it has been the case for some time that customs checks whether attachments to the vehicle have been declared by customs. This can be a routine check or can be done directly on departure from Germany. Many Swiss people know it from shopping – you have the invoice stamped directly from the customs office in order to get back the German VAT later. If a workshop is then on the invoice, the process may be looked at more closely and the vehicle is checked for finishing. If it is then found that it has not been duly declared under customs law, a tax criminal procedure may now be brought against the vehicle owner, since the vehicle was illegally taken from the customs supervision. The result would be a fine at best – but we must not forget that a criminal procedure will then be initiated, which can have far-reaching consequences.

General process of inward processing

After you have clarified in advance with the customs office and/or us, i.e. the customs agency, whether the inward processing procedure is applicable in your case, the further procedure would generally be for you, as the customs agency, to provide us with all the necessary information. This will allow us to carry out the processing properly at customs. In theory, it would also be possible for procedures to be declared to customs themselves. However, it is important to know here that this is a customs and tax declaration that is being made. If you fill out the wrong forms here or fill in false information in the fields out of ignorance, you will be able to transfer to customs on the day at best and will not get any further. In the worse case, high levies are due immediately or when the vehicle is returned. We therefore recommend that it be carried out directly by a specialist who carries out this processing every week. Please contact us.

Transfer and execution of inward processing

As soon as we have all the information and documents from you, you will receive an e-mail with further information on the procedure at the border.
So you are well prepared on the day of the transfer and can pick up the documents directly from us at the office at the border. After you have been to the cus
toms office with the documents and have deposited the security, a transaction with a registration number is opened at the customs office. We need this registration
number as well as the receipt for the deposited security from you as a scan or photo, so that we can later declare the re-export.

Execution of the procedure

In order to be able to terminate the AV procedure, an export declaration must first be declared in the German customs system. This means that the customs office at the place of the company carrying out the processing wants to see the goods before re-export. Customs therefore wishes to ensure that the goods have not been modified and re-exported in this state, contrary to the prohibitions and restrictions in force. Prohibitions and restrictions on exports include, for example.B. Goods that have been fitted with dog or cat fur, objects which may also be used for torture or goods from certain regions of the world.
For this reason, the goods or the vehicle cannot simply be driven back to the border after completion of the finishing. As a customs agency, we have to put the export declaration in the system of the customs office. Customs then decide on a case-by-case basis whether to see the vehicle or the goods before they can be released for export. Only after release can the goods be exported from the EU. Here you will again receive further information by e-mail from us about the procedure at the border for the return of the vehicle. When re-imported into Switzerland, Swiss import duties (customs duties + VAT) are then charged on the company's labour costs from Germany. Customs approaches vary according to product and weight. For vehicles, it is currently 12-15 CHF inches per 100kg weight of the new material and 7.7% VAT on the new material and on labour costs (+ on customs clearance and transport costs).
We are happy to provide you with the details by phone or in writing by e-mail for your individual case.

Active finishing: car or motorhome

For the customs declaration we need the following information and documents.B e.g. as a scan or easy-to-read photo of you in vehicles,
e.B. finishing of a car or active finishing of motorhomes:
  • Vehicle ID scan
  • Information about the mileage of the vehicle
  • Pro forma invoice issued by you about the current value of the vehicle or a vehicle valuation e.B. Comparis or Eurotax or comparison offers for the value of www.mobile.de or www.autoscout24.ch . the original purchase agreement may also be relevant as a value calculation
  • where applicable, list of defects that can be verified by customs that reduce the value
  • where the vehicle is refined (name of operation and EORI number)
  • how long does the finishing take?
  • what is refined (ideally: cost estimate)?
  • Company contact details and your contact details
  • When and what limit does the vehicle come to?

 

In addition, we always need a customs clearance of duty from you from Switzerland and from the German company.
We are happy to send you the corresponding template of the customs authority by e-mail. Unless the German company does not have An EORI No. we will be happy to explain how the application for the EORI number works.

Here, too, we need the customs power of clearance of both parties, as in the case of the refinement of a car.
In the case of boats, an active finishing must always be registered, even for simple processing.

Let boats and ships actively refine

The processing of a boat, e.B. as a winter camp can be registered with the following documents:

  • Scan boat pass or Declaration of Conformity
  • if applicable, value reports on the boat or original purchase contract, a p
    roforma invoice or value declaration may have to be given / created by you
  • where the boat is refined or reprocessed (name of the plant and its EORI number)
  • how long does the finishing take?
  • what is refined (ideally: cost estimate)?
  • Company contact details and your contact details
  • is the boat transferred over Lake Constance or charged on a trailer/truck?

 

Machinery, motors and other inward processing goods from Switzerland to Germany

For machines or other equipment, we need from you for finishing:

  • Serial number of the machine or engine
  • if necessary, photos of the goods, whenever there is no serial number
  • Proforma invoice for the current value of the goods
  • Number and type of packages
  • Gross and net weight of the goods (i.e. weight with or without packaging).
  • where the goods are refined (name of the company and EORI number)
  • what is refined (ideally: cost estimate)?
  • Company contact details and your contact details
  • how long does the finishing take?
  • When and what limit does the goods come from?

As with boats and vehicles, a customs clearance of authority is required from the person or company in Switzerland and the German processing company.

Prerequisites for inward finishing

With each processing, the goods must be returned to the original country after processing.
In order to ensure this, customs requires a security clearance from the customs declarant. Import duties are
calculated for this purpose, as they would be in the case of 'normal' customs clearance. The collection
of the security is a matter for the customs officer concerned. If the amount of the tax is more than 1,
000 EUR, however, a security benefit is almost always required. Otherwise, one could indicate that one wo
uld like to have goods processed only in the EU and would not have to pay import duties, even if the goods w
ould never come back. Of course, the German state wants to prevent this.
Important: If the return of the goods is not possible, the security will be withheld by the customs office.

Calculation of the guarantee

The security deposit, which must be deposited with the customs office for the duration of the inward processing, is usually s
ome percent of the value of the goods for customs duties (depending on the type of goods and value of the goods) and 7% or 19% VAT.
The duty rate is very different for most goods. For normal cars, this is currently 10% of
the vehicle value. For example, in the case of classic cars, which are in their original condition, no custom
s duties would be due. We are happy to inform you about the exact customs approach, please contact us.
In any case, VAT is always added, i.e. 19% German VAT. The reduced VAT ra
te of 7% applies only to a few products such as books, food, vintage cars and a few other exceptions.
It is important when calculating the guarantee that customs duties must also be taxed, which many do not know.
In addition, freight costs and customs duties must also be added, which also incur duties.

Calculation example 1: "normal vehicle", vehicle value 10,000 EUR, for processing to GermanyVehicle v
alue = 10,000 EURTransport
costs and customs clearance costs = 800 EURTotal v
alue incl. Transport and customs clearance = 10800 EUR, 1
0% customs duties apply = 1080 EURto th
e amount of EUR 10800+1080 = 11880, which is now 19% VAT = EUR 2257.20. This means that
a total of EUR 1080 in customs duties + EUR 2257.20 VAT = EUR 3337.20 is subject to vat.
The possible amount of the tax amount of EUR 3337.20 would therefore have to be deposited with th
e customs office for the duration of the processing. After completion of the customs p
rocedure and return of the vehicle, we would receive a refund of the security.

Calculation example 2: "Oldtimer", vehicle value = 20,000 EUR, for delineation to Germ
anyVehicle value = 20,00
0 EUR transfer on own axle, therefore, the approximate cost of petrol, wear, etc. is = 100 EUR customs cle
arance costs for the declaration for inward processing incl. preparation of all documents = 280 EUR
Total amount thus = 20,380 EUR (no customs duties apply to classic cars, but only 7% VAT
)So 7% = 1426.60 EUR would have to be deposited.

Our tax calculator may also help you to better calculate import duties on normal vehicles.

Costs for inward finishing and closing word

For inward finishing, you have to reckon with a total process and processing costs of approx. 280 EUR / 300 CHF.
In addition, there are import duties, i.e. 7.7% VAT on the new material, on the wage and transport costs +
the security service that you have to deposit for the duration of the inward processing. If you compare now, you
can see that the attachment of a towed clutch in Switzerland costs about 1800 CHF, whereas in Germany it
only costs about 700
EUR + process costs of 280 EUR. So if you are not afraid of the time required to transfer
the vehicle or goods, you can still save a few hundred euros or francs in processing (here in the example approx. 600-700 EUR/CHF).
For those who would like an all-round carefree package, we can also take over the transport of the goods or t
he vehicle. We look forward to hearing from you.