31 July 2024

Customs Payments in Russia and the EAEU: Opportunities for Lawful Reduction

July 31, 2024

BRACE Law Firm ©

Moving goods across the border of the Eurasian Economic Union (the "EAEU") is a state-controlled activity accompanied by the payment of customs payments, which represent one of the sources of state budget revenue.

In accordance with the Customs Code of the Eurasian Economic Union (the "EAEU CC"), customs payments include:

import customs duty;
export customs duty;
VAT charged upon the import of goods into the customs territory of the EAEU;
excise taxes (excise tax or excise duty) charged upon the import of goods into the customs territory of the EAEU;
customs fees.[1]

Classification of Customs Payments

Customs authorities recognize a customs duty as a mandatory payment collected in connection with the movement of goods across the EAEU customs border.[2] The customs value of goods serves as the basis for calculating customs duties and excise taxes.

In accordance with customs legislation, taxes include: VAT and excise taxes (excise tax or excise duty) collected in connection with the import of goods into the EAEU customs territory.[3]

Customs fees are mandatory payments collected for customs operations performed by customs authorities related to the release of goods, customs escort of vehicles, and other actions established by the EAEU CC and (or) the legislation of EAEU member states regarding customs regulation.[4]

The declarant or other persons who have an obligation to pay customs duties and taxes are the payers of such duties and taxes.[5] For example, when importing a product without declaring it, customs authorities recognize such movement across the border as illegal, and the buyer is recognized as the person who should have known about the illegality of the import and bears solidary liability for the non-payment of the due customs payments.[6]

The declarant’s obligation to pay import customs duties, taxes, and special, antidumping, and countervailing duties regarding goods placed under the customs procedure of release for internal consumption arises from the moment the customs authority registers the goods declaration.[7]

To calculate customs duties and taxes, authorities apply the rates in effect on the day the customs authority registers the customs declaration, unless established otherwise by the EAEU CC. The declaration of customs value is an integral part of the goods declaration. In cases determined by the Decision of the Board of the Eurasian Economic Commission No. 160 dated October 16, 2018, On Cases of Filling Out a Declaration of Customs Value, Approval of Forms for a Declaration of Customs Value, and the Procedure for Filling Out a Declaration of Customs Value, the declarant states information on the customs value of goods, including the method for determining the customs value, the amount of the customs value, and the terms and circumstances of the transaction related to determining the customs value.

Import Customs Duty

In accordance with the Treaty on the Eurasian Economic Union,[8] an import customs duty is an mandatory payment collected by the customs authorities of member states in connection with the import of goods into the EAEU customs territory.[9] To calculate import customs duties, authorities apply the rates of the EAEU Common Customs Tariff,[10] except for cases provided for in accordance with the Treaty on the EAEU, or cases where, in accordance with international treaties within the EAEU or international treaties of the EAEU with a third party, rates other than the rates of the EAEU Common Customs Tariff apply.[11]

For the import of goods from states and territories taking measures that violate the economic interests of Russia, other rates apply as established in Decree of the Government of Russia No. 2240 dated December 7, 2022, On Approval of Import Customs Duty Rates for Certain Goods Originating from States and Territories Taking Measures that Violate the Economic Interests of the Russian Federation.

The obligation to pay import customs duties:

regarding goods placed under the customs procedure of release for internal consumption, arises for the declarant from the moment the customs authority registers the goods declaration;[12]
in the case of illegal movement of goods across the EAEU customs border, arises upon the import of goods into the EAEU customs territory;[13]
upon the arrival of goods in the EAEU customs territory, arises for the carrier from the moment the goods cross the EAEU customs border;[14]
regarding foreign goods placed in temporary storage, arises:[15]
- for the carrier or another person possessing authority over the goods who submitted documents for placing the goods in temporary storage—from the moment the customs authority registers these documents;
- for the owner of the temporary storage warehouse — from the moment the goods are placed in the temporary storage warehouse;
- for a person carrying out temporary storage of goods in a place that is not a temporary storage warehouse—from the moment the customs authority registers the documents submitted for placing the goods in temporary storage.
regarding goods placed under the customs procedure of release for internal consumption and declared for release before filing a goods declaration, arises for the person who filed the application for the release of goods before filing the goods declaration, from the moment the customs authority registers the application.[16]

Paid (recovered) import customs duties are subject to credit and distribution among the budgets of member states in the order set forth in Annex No. 5 to the Treaty on the EAEU. Amounts of import customs duties are credited in national currency to the single account of the authorized body of the member state where they are due under international treaties and acts constituting EAEU law, including upon the recovery of import customs duties. Advance payments, export customs duties, taxes, fees, and other payments (excluding special, antidumping, and countervailing duties) paid in accordance with the legislation of the member state and received in the single account of the authorized body may be credited toward the payment of import customs duties.

EAEU legislation provides for the concept of a "tariff preference," which represents an exemption from the payment of import customs duties or a reduction in import customs duty rates for goods originating from countries forming a free trade zone together with the EAEU, or a reduction in import customs duty rates for goods originating from developing countries — users of the EAEU Unified System of Tariff Preferences — and (or) least developed countries — users of the EAEU Unified System of Tariff Preferences.[17] The Treaty on the EAEU establishes that the Republic of Belarus, the Republic of Kazakhstan, and the Russian Federation provide tariff benefits established by international treaties of these member states signed before January 1, 2010, until the unification and (or) termination of these international treaties.

Furthermore, the Treaty on the EAEU provides that tariff benefits in the form of an exemption from import customs duty or a reduction in the import customs duty rate may apply to goods imported (brought) into the EAEU customs territory.[18] Exemptions from import customs duty are granted for the following goods imported (brought) into the EAEU customs territory from third countries:[19]

goods as a contribution by a foreign founder to the charter (pooled) capital (fund) within the periods established by the constituent documents for the formation of this capital (fund), in accordance with the established procedure;[20]
goods imported within the framework of international cooperation in the field of space exploration and use, including the provision of spacecraft launch services, in accordance with the approved list;[21]
marine fishery products of member state vessels, as well as vessels leased (chartered) by legal entities and (or) individuals of member states;
currency of member states, currency of third countries (except for that used for numismatic purposes), and securities in accordance with the legislation of member states;
goods imported as humanitarian aid and (or) for the purpose of eliminating the consequences of natural disasters, accidents, or catastrophes;
goods, except for excise-taxable goods (excluding passenger cars specially intended for medical purposes), imported through third countries, international organizations, or governments for charitable purposes and (or) recognized in accordance with the legislation of member states as gratuitous aid (assistance), including technical assistance (assistance).

Decision of the Commission of the Customs Union No. 130 dated November 27, 2009, On Unified Customs and Tariff Regulation of the Eurasian Economic Union (the "Commission Decision No. 130"), defines tariff benefits in the form of the abolition of import customs duties for an established list of goods. At the same time, a tariff benefit in the form of a reduction in the import customs duty rate of the EAEU Common Customs Tariff from 15% to 5% of the customs value applies to:

seamless blanks of containers for compressed or liquefied gas imported into the territory of the Republic of Belarus in a volume of no more than 25,000 units and intended for the production of containers for compressed or liquefied gas;
seamless containers for compressed or liquefied gas manufactured in the territory of the Republic of Belarus in an amount of no more than 25,000 units.

The beneficiary receives the tariff benefit provided they submit a confirmation of the target purpose of the imported goods to the customs authorities of the Republic of Belarus, issued by the Ministry of Industry of the Republic of Belarus, containing information on the nomenclature, quantity, and value of such goods, as well as the organizations importing them. Additionally, the provided tariff benefit is granted upon the release of goods placed (being placed) under the customs procedure of release for internal consumption.

The declarant’s obligation to pay import customs duties regarding goods placed (being placed) under the customs procedure of release for internal consumption with the application of a tariff benefit terminates upon the occurrence of the following circumstances:

the release of goods in accordance with the customs procedure of release for internal consumption and the fulfillment of the obligation to pay import customs duties and (or) their recovery in amounts calculated in accordance with the EAEU CC in the goods declaration, taking into account benefits in the form of a reduction in the import customs duty rate;
circumstances provided for by subparagraphs 3–8 of paragraph 3 of Article 136 of the EAEU CC.

The application of tariff benefits and the reduction of import customs duties depend on compliance with the norms and rules established by international treaties, EAEU law, and national legislation; non-compliance allows customs authorities to refuse the application of tariff preferences. For example, in Case No. A32-6425/2022,[22] customs authorities cited non-compliance with the conditions for providing tariff preferences and non-compliance with the conditions established by Decision of the Council of the Eurasian Economic Commission No. 60 dated June 14, 2018, On Approval of the Rules for Determining the Origin of Goods from Developing and Least Developed Countries. During the audit, the customs authority identified a discrepancy between the stamp impressions on the disputed certificates and the sample stamp impressions submitted by the authorized body of Costa Rica, which were included in the file of comparative samples of the Russian National System of Preferences. Consequently, the customs authority concluded that the company did not comply with the established conditions for providing tariff preferences; therefore, the preferential regime for the imported goods could not be restored. During the trial, the courts examined the requirements for the certificate of origin and established that the grounds for refusing to restore tariff preferences include the customs authorities' identification of facts that the submitted certificate is not authentic (falsified or forged). However, the evidence presented in the case showed that the customs authority did not establish the fact of forgery or falsification regarding the disputed certificates; thus, the court dismissed the customs authority's cassation appeal.

Export Customs Duty

As one of the types of customs payments, export customs duty is paid when exporting goods outside the EAEU customs territory. Export customs duties and taxes are paid in the currency of the member state where they are due, unless otherwise established by international treaties within the EAEU, bilateral international treaties of member states, and (or) the legislation of member states.[23]

The payers of export duty are the declarant or other persons who have an obligation to pay customs duties and taxes. Other persons may include:

persons illegally moving goods,[24] including those who knew or should have known about the illegality of such movement;[25]
persons bearing solidary liability with the declarant for the payment of export customs duties regarding goods placed under the customs procedure of customs transit.[26]

To calculate customs duties, authorities apply the rates in effect on the day the customs authority registers the customs declaration. For exported goods, Decree of the Government of Russia No. 2068 dated November 27, 2021, On Rates of Export Customs Duties on Goods Exported from the Russian Federation Outside the Customs Territory of the Eurasian Economic Union, defines these rates. For exports outside the EAEU, Decree of the Government of Russia No. 1538 dated September 21, 2023, On Rates of Export Customs Duties on Goods Exported from the Russian Federation Outside the Customs Territory of the Eurasian Economic Union, and on Amending the Rates of Export Customs Duties on Goods Exported from the Russian Federation Outside the Customs Territory of the Eurasian Economic Union, applies. The value of goods exported from Russia is determined in accordance with Decree of the Government of Russia No. 1694 dated December 16, 2019, On Approval of the Rules for Determining the Customs Value of Goods Exported from the Russian Federation.

Export customs duty must be paid in the following cases:

the obligation to pay export customs duties must be fulfilled before the release of goods in accordance with the export customs procedure;[27]
the obligation to pay export customs duties must be fulfilled in the event of failure to complete the temporary export customs procedure before the expiration of the temporary export period established by the customs authority;[28]
the obligation to pay export customs duties regarding goods placed under the temporary export customs procedure arises for the declarant from the moment the customs authority registers the goods declaration;[29]
in the case of illegal movement of goods across the EAEU customs border, customs duties and taxes must be paid in the same amount as upon the export of EAEU goods from the customs territory — the export customs procedure without the application of export customs duty benefits;[30]
the obligation to pay export customs duties regarding EAEU goods transported (conveyed) from one part of the EAEU customs territory to another part through territories of non-member states and (or) by sea, placed under the customs procedure of customs transit, arises for the declarant from the moment the customs authority registers the transit declaration;[31]
export customs duties must be paid as if the EAEU goods placed under the customs procedure of processing outside the customs territory were being placed under the export customs procedure without the application of export customs duty benefits,[32] etc.

The reduction of export customs duties serves as one of the methods for regulating foreign trade activity. Under conditions of an unstable global political situation and sanctions restrictions imposed on Russia, it facilitates the development of relations with friendly countries. Thus, Federal Law No. 630-FZ dated December 25, 2023, On Amending the Law of the Russian Federation On the Customs Tariff and the Federal Law On the Fundamentals of State Regulation of Foreign Trade Activity, established that, by instruction of the President of Russia, the Government of the Russian Federation may establish export customs duty rates different from the base rates for a period not exceeding six months to promote economic development and strengthen ties with states whose trade and political relations provide for Most Favored Nation treatment and other states. This approach allows for the development of trade relations with friendly countries and foreign trade activity on more favorable terms, increasing the competitiveness of goods and reducing the cost of the product for the end consumer.

For some goods, export customs duties may change depending on the political and economic situation in the country and the world, the average price on global markets, and the exchange rate — for example, the export customs duty rates for crude oil and certain categories of goods processed from oil. Decree of the Government of the RF No. 276 dated March 29, 2013, On the Calculation of Export Customs Duty Rates for Crude Oil and Certain Categories of Goods Processed from Oil, and on Recognizing Certain Decisions of the Government of the Russian Federation as No Longer in Force, defines the formulas for calculating these export customs duty rates.

VAT Upon the Import of Goods into the EAEU Customs Territory

Goods imported from the territory of one EAEU member state into the territory of another member state are subject to indirect taxes.[33] According to Annex No. 18 to the Treaty on the EAEU, indirect taxes include VAT and excise taxes (excise tax or excise duty). Russian tax legislation establishes that the sale of goods (works, services) in the territory of Russia is recognized as an object of taxation.[34] VAT, which is part of customs payments, is collected upon the import of goods into the EAEU customs territory and is due in accordance with EAEU regulations and Russian legislation on taxes and fees.[35]

In accordance with paragraph 1 of Article 61 of the EAEU CC, VAT is paid in the EAEU member state whose customs authority carries out the release of goods, except for the release of goods in accordance with the customs procedure of customs transit.

Partial payment of the tax is allowed in cases where:

the product is placed under the temporary import procedure; in this case, taxes must be paid for the period from the day of their placement under the temporary import customs procedure (admission) to the day of its termination;[36]
when placing processing products under the customs procedure of release for internal consumption, import customs duties are calculated based on the cost of processing operations outside the EAEU customs territory.[37]

Additionally, a zero VAT rate is provided for the import of goods. To confirm this rate and (or) exemption from the payment of excise taxes, the taxpayer from whose territory the goods were exported must submit the following documents (or copies thereof) to the tax authority simultaneously with the tax declaration:

concluded contracts serving as the basis for the export of goods; in the case of leasing goods — leasing contracts, manufacturing contracts, and tolling processing contracts;
a bank statement confirming the actual receipt of revenue from the sale of exported goods to the exporter's account, unless the legislation of the member state provides otherwise;
an application for the import of goods and the payment of indirect taxes, drawn up in the form[38] provided for by a separate international interdepartmental treaty, with a mark from the tax authority into whose territory the goods were imported regarding the payment of indirect taxes or a list of applications;
transport (shipping) and (or) other documents confirming the movement of goods;
other documents confirming the validity of the application of the zero VAT rate and (or) exemption from the payment of excise taxes provided for by the legislation of the member state from whose territory the goods were exported.

The taxpayer may submit the provided documents in electronic form in the manner established by the regulatory legal acts of the tax authorities of member states or other regulatory legal acts of member states.

Furthermore, a lawful ground for reducing VAT is the import of goods for which analogues are not produced in Russia. Decree of the Government of the RF No. 372 dated April 30, 2009, On Approval of the List of Technological Equipment (Including Components and Spare Parts for It), Analogues of Which Are Not Produced in the Russian Federation, the Import of Which into the Territory of the Russian Federation Is Not Subject to Value Added Tax (the "Decree No. 372"), established such a list of goods. It is important to note that the list is a variable value and is subject to change based on external and internal economic circumstances; the procedure for making changes to the established list of goods is carried out based on the Order of the Ministry of Industry and Trade of Russia No. 1424 dated May 4, 2016.

Reducing VAT by applying Decree No. 372 allows for a significant reduction in foreign trade activity costs. However, the incorrect use of the TN VED code leads to the customs authority's additional assessment of customs payments due to a change in the TN VED code and the inability to apply Decree No. 372. For example, in Case No. A56-8249/2021,[39] when declaring, the entrepreneur indicated a code included in the List of Technological Equipment. Based on the results of a desk customs audit, the customs authority decided to change the TN VED code, which entailed a change in the applicable VAT rate and the additional assessment of tax amounts. The entrepreneur considered the actions of the customs authority illegal and appealed to the court; however, during the trial, the court established that the customs authority had lawfully reclassified the product under a different code and additionally assessed the customs payments.

What Customs Payments Are Paid for Import and Export Within the EAEU?

In accordance with the Tax Code of the RF (the "Tax Code"),[40] the import of goods into the territory of Russia is recognized as an object of taxation by value added tax, which belongs to indirect taxes. The collection of indirect taxes on goods imported between EAEU countries is carried out by the tax authority of the member state into whose territory the goods were imported; [41] that is, VAT for imports between EAEU countries is paid to the tax authorities rather than the customs authorities.

The transfer of ownership of goods serves as the basis for the payment of VAT.[42] VAT for the import of goods is calculated based on the customs value of the product at a rate of 20% or 10%, with the exception of non-taxable goods set forth in Article 150 of the Tax Code. Taxation is carried out at a tax rate of 10% for the sale of goods indicated in paragraph 2 of Article 164 of the Tax Code, which mainly include food products and goods for children.

Meanwhile, an exemption from VAT is carried out, for example, in the following cases:

the import of the product is exempt from tax according to Article 150 of the Tax Code;
the product is placed under the customs procedures of a free customs zone or a free warehouse;
the product is transferred from one structural unit of an organization to another structural unit (branch);
both the seller and the buyer of the product are Russian persons;[43] etc.

Indirect taxes, except for excise taxes on marked excise-taxable goods, are paid no later than the 20th day of the month following the month of:

the acceptance of imported goods for accounting, unless otherwise provided;
the payment term provided for by the leasing agreement (contract).

VAT for imports from the EAEU is the aggregate obligation of the taxpayer, which must be paid as part of the Unified Tax Payment (the "UTP"). The UTP consists of funds transferred by the taxpayer, fee payer, insurance premium payer, tax agent, and (or) another person to the budget system of the Russian Federation on the Federal Treasury account, intended for the fulfillment of the taxpayer's aggregate obligation, as well as funds recovered from the taxpayer.[44]

The taxpayer is obliged to submit the corresponding tax declaration to the tax authority with the following documents attached:

an application for the import of goods and the payment of indirect taxes;[45]
a bank statement confirming the actual payment of indirect taxes;
transport documents;[46]

The procedure for filling out the tax declaration on indirect taxes is determined by the Order of the Federal Tax Service of Russia No. SA-7-3/765@ dated September 27, 2017.

In the event that the legislation of an EAEU member state does not provide for the issuance of an invoice, the declarant indicates the details of another document provided for by the legislation of the EAEU member state containing the value of the imported goods (in the case of importing goods from the Republic of Belarus — TTN-1, TN-2, or any other document confirming the value of the imported goods) when filling out the application.[47]

Documents may be submitted in copies certified in the manner established by the legislation of the acts of the tax authorities of member states or other regulatory legal acts of member states. The format of these documents is determined by regulatory legal acts of the tax authorities of member states or other regulatory legal acts of member states.

Within 10 business days from the date of receipt of the application and accompanying documents, the tax authority official must review it and confirm the fact of payment of indirect taxes (exemption or other method of payment) or provide a reasoned refusal to provide such confirmation.

If the specified ten-day period expires before or on the day of the indirect tax payment deadline, the tax authority marks the confirmation of indirect tax payment or refuses to do so no later than the day following the tax payment deadline.

Excise Taxes (Excise Tax or Excise Duty) Charged Upon the Import of Goods into the EAEU Customs Territory

An excise tax is a type of customs payment paid into the state budget, which is collected from excisable goods:

ethyl alcohol produced from food or non-food raw materials;
spirit-containing products (solutions, emulsions, suspensions, and other types of products in liquid form) with a volume fraction of ethyl alcohol of more than 9%;
alcoholic products with a volume fraction of ethyl alcohol of more than 0.5%;
tobacco products;
passenger cars;
motor gasoline;
diesel fuel;
motor oils for diesel and (or) carburetor (injection) engines;
straight-run gasoline;
middle distillates;
benzene, paraxylene, orthoxylene;
aviation kerosene;
natural gas;
liquids for electronic nicotine delivery systems;
tobacco (tobacco products) intended for consumption by heating;
grapes;
ethane;
LPG;
liquid steel;
sugary beverages.

Tax authorities collect excise taxes on EAEU excisable goods imported into the territory of Russia from the territory of an EAEU member state, with the exception of EAEU excisable goods subject to marking with federal special marks or record-keeping and control special marks in accordance with Russian legislation. This obligation arises from the day marked goods are imported into the territory of the RF. The tax base for excise taxation includes:

volume, quantity, or other indicators of imported marked goods in physical terms, for which fixed (specific) excise rates are established;
the value of imported excisable goods for which ad valorem excise rates are established;
the volume of imported marked goods in physical terms for calculating excise taxes when applying a fixed (specific) tax rate;
the estimated value of imported excisable goods, calculated based on maximum retail prices, for calculating excise taxes when applying an ad valorem (as a percentage) tax rate for goods for which combined excise rates are established, consisting of fixed (specific) and ad valorem (as a percentage) rates.

Taxation of excisable goods is carried out at tax rates determined in accordance with Article 193 of the Tax Code. Upon the import of excisable goods into the territory of Russia, the tax base is determined:

for excisable goods for which fixed (specific) tax rates are established (in an absolute amount per unit of measurement) — as the volume of imported excisable goods in physical terms;
for excisable goods for which ad valorem (as a percentage) tax rates are established — as the sum of:
- their customs value;
- the customs duty to be paid;
for excisable goods for which combined tax rates are established, consisting of fixed (specific) and ad valorem (as a percentage) tax rates — as the volume of imported excisable goods in physical terms for calculating the excise tax when applying the fixed (specific) tax rate, and as the estimated value of imported excisable goods, calculated based on maximum retail prices, for calculating the excise tax when applying the ad valorem (as a percentage) tax rate.

The deadlines for paying excise taxes depend on the operations for which the excise tax is paid:

when importing excisable goods from the EAEU, no later than the 20th day of the following month;
when importing excisable goods from countries that are not members of the EAEU, before filing the customs declaration.

Furthermore, the taxpayer has the right to reduce the amount of excise tax on excisable goods by the tax deductions established by tax legislation. A taxpayer holding a registration certificate as a person performing operations for processing petroleum raw materials also applies tax deductions when performing such operations.

Excise tax amounts presented by sellers and paid by the taxpayer when purchasing excisable goods, or paid by the taxpayer when importing excisable goods into the territory of Russia and other territories and objects under its jurisdiction that have acquired the status of EAEU goods and were subsequently used as raw materials for the production of excisable goods, are subject to deduction, unless established otherwise by tax legislation.

In addition, the taxpayer has the right to reduce the total amount of excise tax on excisable goods by the amount of excise tax calculated by the taxpayer from the amounts of advance and (or) other payments received as payment for upcoming supplies of excisable goods.

Tax deductions are established by Article 200 of the Tax Code and are applied depending on the type of product and the terms of their supply. A crucial point in using tax deductions is the correct application of the norms of current legislation, which will allow for the correct calculation of the total excise tax amount and reduce the potential risks of additional assessment of customs payments by the tax authorities.

For example, in Case No. A27-22139/2022, the tax authority additionally assessed excise tax amounts for a company, determining that there had been an unlawful application of deductions regarding excise tax amounts incurred during the process of acceptance, storage, and movement. The company disagreed with the customs authority's conclusions and appealed to the court with a claim to invalidate the tax authority's decision. The court established that the company had the right to excise tax deductions regarding ethyl alcohol, and therefore the claim was satisfied.

Customs Fees

Customs fees include:

customs fees for customs operations related to the release of goods;
customs fees for customs escort;
customs fees for storage.

Furthermore, the obligation to pay customs fees for customs operations arises:

for the declarant from the date of registration by the customs authority of the goods declaration, passenger customs declaration, or another customs document used for customs declaration on the basis of which a decision on the release of goods is made;
for the person who will act as the declarant when filing a goods declaration, from the date of registration by the customs authority of the application for the release of goods before filing the goods declaration.

Payers of customs fees for storage are persons who have placed goods in a temporary storage warehouse of the customs authority, from the day the goods are placed in such a warehouse. The obligation to pay customs fees for customs escort arises for the declarant of the customs transit procedure from the day the customs authority makes a decision on customs escort.

The obligation to pay customs fees terminates upon the occurrence of the following circumstances:

fulfillment of the obligation to pay customs fees in the amounts calculated and due in accordance with Federal Law No. 289-FZ;
recognition of customs fee amounts as bad debts for recovery in the manner established by the Law on Customs Regulation.

For the purposes of calculating customs fee amounts for customs operations, the rates in effect on the day of registration of the customs declaration by the customs authority apply, which are determined in accordance with Decree of the Government of Russia No. 1082 dated September 11, 2018, On Rates and the Base for Calculating Customs Fees for Customs Escort and Storage. It should also be noted that the rates and base for calculating customs fees are established by Decree of the Government of Russia No. 342 dated March 26, 2020, On Rates and the Base for Calculating Customs Fees for Performing Customs Operations Related to the Release of Goods. Customs fees for customs operations are not collected regarding goods defined by Article 47 of the EAEU CC.

Customs fees must be paid:

for customs operations before the release of goods, with the exception of cases provided for by the EAEU CC;
for customs escort before the actual commencement of customs escort;
for storage before the actual release of goods from the customs authority's warehouse.

Benefits for the Payment of Customs Payments

Benefits for the payment of customs payments are understood to mean:

benefits for the payment of import customs duties (tariff benefits);
benefits for the payment of export customs duties;
benefits for the payment of taxes;
benefits for the payment of customs fees (exemption from the payment of customs fees).

In addition to the tariff benefits established by the Treaty on the EAEU, international treaties with a third party, and Commission decisions, the following are exempt from import customs duty:

motor vehicles;
equipment, including machines and mechanisms, as well as materials included in the scope of supply of the corresponding equipment, and components;
floating vessels registered in international registries of ships;
fishing vessels, floating bases, and other vessels for processing and preserving fish products, maritime;
technological equipment, components, and spare parts for it, raw materials, and materials;
gold in bars with a chemically pure gold content of at least 995 parts per 1000 parts of alloy mass;
civil passenger and cargo aircraft;
aircraft engines, spare parts, and equipment necessary for the repair and (or) technical maintenance of civil passenger and (or) civil cargo aircraft and (or) aircraft engines for them;
unregistered medicinal products, human blood and its components, human organs and (or) tissues, including hematopoietic stem cells and (or) bone marrow, imported (brought) for providing medical assistance for life-saving indications of a specific patient and (or) conducting unrelated transplantation on the basis of a conclusion (permitting document) or license;
turboprop civil passenger aircraft;
vanadium-aluminum alloy, etc.

Benefits for the payment of customs payments allow for reducing the costs of the expenditure part of importing goods, which can significantly affect the final cost of the product for the consumer; therefore, a vital aspect of conducting foreign trade activity is also the possibility of applying benefits for the payment of customs payments.

How to Reduce Customs Payments?

Reducing customs payments is a relevant topic when conducting foreign trade activity, as it allows for cutting the cost of customs clearance for goods.

Customs clearance expenses depend on the customs value of the goods and the determined TN VED code, which are determined by the declarant. Given that the customs value consists of several components that affect its magnitude, reducing the cost of such components allows for reducing customs payments as well; for example, the delivery of the cargo to the buyer may be included in the customs value. When choosing a supply basis with independent delivery of the cargo, this part of the expenses may be excluded from the customs value. However, in this case, one should not forget about potential risks associated with the transportation of goods.

Situations occur where, to reduce the customs value, unreliable information regarding the supplied product is provided to the customs authorities, and the TN VED code does not correspond to reality; however, during customs control, the customs authorities may discover the fact of providing unreliable information, which will entail not only an increase in the customs value of the goods and customs payments but also being held liable for providing false information. For example, during a desk audit regarding the reliability of declared information, it was established that the declarant had incorrectly determined the TN VED code, which served as the basis for conducting an audit, making changes to the goods declaration, and holding the company administratively liable. The company disagreed with the customs authority and appealed to the court; however, during the hearing of the case in the court of cassation, the court established the lawfulness of the appellate court's adoption of the corresponding decree and the finding of the company guilty of committing the imputed offense. Reducing customs payments in terms of choosing the TN VED code is ensured by its correct determination and defending one's position during customs control.

In addition to the main options for reducing customs payments through reducing the customs value and the correct choice of the TN VED code, regulatory documents provide for obtaining customs benefits and tariff preferences, which also allow for reducing the amount of customs payments.

It should be noted that customs payments significantly affect the final cost of the product paid by the end buyer, and for market competitiveness, every entrepreneur is interested in reducing all possible items to decrease the product cost and interest the buyer in purchasing the product specifically from them. However, in the pursuit of cost reduction and lower import customs payments, one should not forget the importance of compliance with regulatory acts in the sphere of customs legislation. To resolve this issue, it is vital to correctly reflect the necessary information in the foreign trade contract and all supporting documents.

Detailed elaboration of the terms of the contract even at the stage of preparation for a foreign trade transaction allows not only for lawfully reducing customs payments but also for excluding the possibility of unfavorable consequences in the form of not only administrative but also criminal liability.

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References

[1] Paragraph 1 of Article 46 of the EAEU CC.

[2] Paragraph 33 of Article 2 of the EAEU CC.

[3] Paragraph 24 of Article 2 of the EAEU CC.

[4] Paragraph 1 of Article 47 of the EAEU CC.

[5] Article 50 of the EAEU CC.

[6] Decision of the Arbitration Court of the City of Saint Petersburg and the Leningrad Oblast dated March 22, 2024, in Case No. A56-65417/2023.

[7] Paragraph 1 of Article 136 of the EAEU CC.

[8] Signed in Astana on May 29, 2014.

[9] Decision of the Council of the Eurasian Economic Commission No. 80 dated September 14, 2021, On Approval of the Unified Commodity Nomenclature of Foreign Economic Activity of the Eurasian Economic Union and the Unified Customs Tariff of the Eurasian Economic Union, as well as on Amending and Recognizing as No Longer in Force Certain Decisions of the Council of the Eurasian Economic Commission. Paragraph 2 of Article 25 of the Treaty on the EAEU.

[10] Paragraph 2 of Article 25 of the Treaty on the EAEU.

[11] Paragraph 2 of Article 53 of the EAEU CC.

[12] Paragraph 1 of Article 136 of the EAEU CC.

[13] Paragraph 1 of Article 56 of the EAEU CC.

[14] Paragraph 1 of Article 91 of the EAEU CC.

[15] Paragraph 1 of Article 102 of the EAEU CC.

[16] Paragraph 1 of Article 137 of the EAEU CC.

[17] Article 25 of the Treaty on the EAEU.

[18] Paragraph 1 of Article 43 of the Treaty on the EAEU.

[19] Annex No. 6 to the Treaty on the EAEU.

[20] Decision of the Commission of the Customs Union No. 728 dated July 15, 2011, On the Procedure for Applying Exemption from the Payment of Customs Duties when Importing Certain Categories of Goods into the Unified Customs Territory of the Customs Union.

[21] Decision of the Commission of the Customs Union No. 727 dated June 22, 2011, On Amending Decision of the Commission of the Customs Union No. 130 dated November 27, 2009 On Unified Customs and Tariff Regulation of the Customs Union of the Republic of Belarus, the Republic of Kazakhstan, and the Russian Federation.

[22] Decree of the Arbitration Court of the North Caucasus District dated December 21, 2022, No. F08-13445/2022 in Case No. A32-6425/2022.

[23] Paragraph 5 of Article 61 of the EAEU CC.

[24] Article 56 of the EAEU CC.

[25] Paragraph 26 of the Decree of the Plenum of the Supreme Court of the RF No. 49 dated November 26, 2019, On Certain Issues Arising in Judicial Practice in Connection with the Entry into Force of the Customs Code of the Eurasian Economic Union.

[26] Paragraph 6 of Article 309 of the EAEU CC.

[27] Paragraph 3 of Article 141 of the EAEU CC.

[28] Paragraph 3 of Article 232 of the EAEU CC.

[29] Paragraph 1 of Article 232 of the EAEU CC.

[30] Paragraph 5 of Article 56 of the EAEU CC.

[31] Paragraph 1 of Article 309 of the EAEU CC.

[32] Paragraph 5 of Article 185 of the EAEU CC.

[33] Paragraph 1 of Article 71 of the Treaty on the EAEU.

[34] Paragraph 1 of Article 146 of the Tax Code of the RF.

[35] Letter of the Ministry of Finance of Russia No. 03-07-08/59875 dated June 28, 2023.

[36] Paragraph 1 of Article 223 of the EAEU CC.

[37] Paragraph 1 of Article 186 of the EAEU CC.

[38] Protocol dated December 11, 2009, On the Exchange of Information in Electronic Form Between the Tax Authorities of the Member States of the Eurasian Economic Union on the Paid Amounts of Indirect Taxes.

[39] Decree of the Arbitration Court of the North-Western District dated September 15, 2022, No. F07-9961/2022 in Case No. A56-8249/2021.

[40] Subparagraph 4 of paragraph 1 of Article 146 of the Tax Code of the RF.

[41] Paragraph 13 of Annex No. 18 to the Treaty on the EAEU.

[42] Paragraph 13 of Annex No. 18 to the Treaty on the EAEU.

[43] Letter of the Ministry of Finance of Russia No. 03-07-13/1/10895 dated February 26, 2016.

[44] Article 11.3 of the Tax Code of the RF.

[45] Protocol dated December 11, 2009, On the Exchange of Information in Electronic Form Between the Tax Authorities of the Member States of the Eurasian Economic Union on the Paid Amounts of Indirect Taxes.

[46] Letter of the FTS of the RF No. ShS-37-3/5424@ dated June 29, 2010, On Sample Forms of Transport (Shipping) Documents.

[47] Letter of the FTS of Russia No. ED-4-15/5040@ dated March 20, 2014, On the Procedure for Filling Out an Application for the Import of Goods and the Payment of Indirect Taxes.

[48] Letter of the FTS of Russia No. EA-4-15/3533@ dated March 24, 2023, On Placing a Mark on the Payment of Indirect Taxes.

[49] Article 181 of the Tax Code of the RF.

[50] Paragraph 19 of Annex No. 18 to the Treaty on the EAEU.

[51] Paragraph 1 of Article 200 of the Tax Code of the RF.

[52] Decree of the Arbitration Court of the West Siberian District dated September 27, 2023, No. F04-4561/2023 in Case No. A27-22139/2022.

[53] Paragraph 2 of Article 37 of the Law on Customs Regulation.

[54] Paragraph 1 of Article 49 of the EAEU CC.

[55] Commission Decision No. 130.

[56] Decree of the Arbitration Court of the North-Western District dated July 4, 2024, No. F07-9844/2024 in Case No. A56-44411/2023, On Rescinding a Decree on Holding Liable Under Part 2 of Article 16.2 of the CAO RF.