Prime Minister’s Decree No. 1635 of 2002 on the rules and procedures regulating temporary admission and refund of taxes and customs duties
Prime MinisterAfter perusal of the Constitution
.
The Customs Law promulgated by Law No. 66 of 1963, Law No. 118 of 1975 on Import and Export,
Law No. (155) of 2002 on export development, and based on the proposal of the Minister of Foreign Trade and the Minister of Finance
;
Decided
Article One: –
The rules and procedures of the temporary admission system and the refund of taxes and customs duties attached shall apply.
Article Two:
Any provision that contradicts or violates the attached rules and procedures shall be repealed.
Article Three:
This decision shall be published in the Egyptian Gazette and shall come into force as of the day following the date of its publication.
Prime MinisterDr. Atef Obaid
Chapter One Management of temporary allowance systems and refund of taxes, customs duties and service charges
Article No. 1:
A central unit shall be established at the Ministry of Finance consisting of representatives of the Customs Authority and the General Organization for Export and Import Control under the supervision of the Minister of Finance in conjunction with the Minister concerned with foreign trade. The formation of the organizational structure of this unit and the competencies of its employees shall be issued by a decision of the Prime Minister based on the proposal of the Minister of Finance in agreement with the Minister concerned with foreign trade. This unit shall be responsible for the following : – Develop an advanced system for keeping data and information related to the temporary admission and refund of taxes and customs duties .
– Receiving, reviewing and keeping guarantees of all kinds provided by the stakeholders or referred to them from the sub-units after adding them to the customer’s account. – Receiving and saving the reports of the concerned authorities regarding the rates of the perishing that are received directly or referred from the sub-units. – Factoring and returning guarantees immediately after the end of their purpose in light of the settlement that took place in the sub-units. – Examining and deciding on any problems presented to them or referred to them by the sub-units . Setting the controls for the refund of taxes and fees stipulated by the law for their refund and deciding on the problems that are presented to them or referred to them by the sub-units. – Follow up the results of the application of the system and the extent of its impact on the development of exports.
– Supervising, directing and following up the annual inventory of production units, which is held under the supervision of the Customs Authority in accordance with the provisions of Article (98) of the Customs Law. – Submit a quarterly report to evaluate the performance and present it to the Minister of Finance and the Minister concerned with foreign trade.
Article 2
Sub-units shall be established in sea, land and air ports and ports, and an agreement shall be reached between the Minister of Finance and the Minister concerned with foreign trade on the locations of those units in the aforementioned ports and on the selection of the heads and deputies of the sub-units, and the formation of the organizational structure and the competencies of the units shall be issued by a decision of the Prime Minister based on the proposal of the Minister of Finance and the Minister concerned with foreign trade. The unit shall have the following competencies :
– Considering the applications submitted by importers and exporters to benefit from the temporary admission and tax refund systems and accepting registration in the register of dealers in these two systems. – Completing the export and import procedures for the temporary admission system. – Receiving guarantees of all kinds from dealers in the temporary admission system.
– Completion of settlement and factoring procedures on the guarantees of the temporary admission system .– Completion of the procedures for refunding taxes and customs duties on what is exported under the tax refund system (Drupak).
The heads of the sub-units shall report to the central unit in all technical matters, and no explanations or instructions of a technical nature related to the implementation of the provisions of this resolution may be issued except after the approval of the Minister of Finance and the Minister concerned with trade based on the proposal of the head of the central unit.
Chapter Two
Temporary Admission System
Article No. 3:
The system of abhorrent allowance means the temporary exemption from customs taxes and other taxes and fees of imported raw materials and intermediate goods for the purpose of conducting manufacturing operations on them, and from the requirements for the production of exported goods and from imported items for repair or completion of their manufacture and then export, and these materials, goods, supplies and items are exempted from the import rules regulated by the list of rules implementing the provisions of Law No. 118 of 1975 regarding import and export .
Article No. 4 :
To enjoy the exemption provided for in the preceding Article, the following conditions shall be met :
First: Deposit a security deposit or guarantee of the value of taxes and fees in any of the following forms, individually or collectively: – Cash guarantee –
Bank guarantee. – Guarantee of the assets of the enterprise at the rate of 80% of the net equity of the establishment according to the definition of the Central Auditing Organization, according to the report of one of the auditors who are included in a list issued by a decision of the Minister of Finance and the Minister concerned with foreign trade. A personal undertaking from the establishments operating the export system for a period of not less than three years prior to the submission of the application to use this system, provided that the undertaker has not committed any violations of the temporary admission system, and these establishments are allowed to submit the pledge within a period not exceeding 20% of the highest value of their exports during any of the previous three years.
The remaining balance of the letters of guarantee deposited in the unit for previous operations may be used to guarantee the receivables of other goods contained in this system, and a guarantee may be provided for the remaining quantities of goods in the case of partial export against the recovery of the original guarantee .
Second: The exporter is obligated to export or sell to the exempted authorities or dispose of them in accordance with the rules governing this regard within two years from the date of release, and this period may be extended for another period or periods not exceeding two years by a decision of the Minister of Finance or his authorized representative, and if these periods expire without completing this, taxes and fees become due from the date of entry of these materials and items into the country and his duty to pay in addition to an additional tax of 2% per month of the value of taxes and fees Due for each month of delay as well as the fulfillment of import rules.
Article No. 5:
The guarantees provided by the imported production units cover 25% of the value of the taxes and fees due for goods imported under the temporary admission system, and at least 50% for fabrics, at least half of which are cash and bank guarantees, all under the following conditions: The production unit shall have a license to practice the activity and started production for at least one fiscal year, and this shall be proven by submitting a copy of the practice license and a certificate from the authority supervising the activity. – The unit must be registered in the
commercial register. – The unit must have a tax file or enjoy tax exemption. These data shall be recorded at the beginning of dealing with the temporary admission system and in the case of importing the commodity for the first time and in other cases, the guarantees provided by the importing party shall be guarantees covering the full value of taxes and fees on the goods imported under the temporary admission system, provided that half of them are cash or bank guarantees.
Article No. 6:
The following procedures shall be followed for the goods received by the temporary admission systems: First: The
person concerned or his representative shall complete the certificate of customs procedures and deliver it to the competent sub-unit, attaching it: – Delivery Authorization – An original copy of the bill of lading (non-photocopy). – The invoice is in English, French or Arabic. – Package list. Certificate of origin in case of requesting exemption from taxes and customs duties on goods imported from countries with which a customs preference agreement has been concluded.
Second: – The sub-unit undertakes the following: – Review the certificate – Register the certificate in book 46 and enter its data on the computer. – Form a committee that includes (movement officer, tariff officer, responsible for examination) to inspect the message, determine the item, quantity and customs item, review prices and determine fees, reserve three samples of each item and be kept and signed by the movement officer, the inspection officer, the importer or his representative, and the unit keeps one of them and sends the second to the Industrial Control Authority and receives The third to the importer or his representative and may at the request of the importer reserve more than one additional sample to be used in the export in more than one port, and in the event that it is not possible to withdraw samples are attached catalogs or original drawings issued by the product enable conformity upon export. – Inserting the item data on the computer in the light of the actual inspection to be used when making the settlement.
Issuing an incoming release permit (extraction statement) and delivered to the importer after inserting it on the computer so that it includes all the data of the message as well as a copy of the data that has been entered into the computer. – Receiving the guarantee (bank or cash) and in the event that there are balances of guarantees for the importer of any kind, the unit factoring from these guarantees. – The unit inserts the evidence of the guarantees delivered to it and then sends it electronically to the central unit and records the guarantees data on the certificate of the importer. Delivery of the importer incoming release permission (extraction statement) includes all the data of the message as well as a copy of the data entered to the computer. These procedures must be completed within a maximum period of
twenty-four hours from the importer’s completion of the necessary documents. In the event that they are not completed within this period, the head of the sub-unit shall inform the head of the central unit of the justifications for the delay in completing the procedures to take the necessary action and prepare a report thereon to be presented to the Minister of Finance and the Minister concerned with foreign trade.
Article 7 :
The following procedures shall be followed when exporting under the temporary allowance system:
First: The exporter or his representative shall complete the exporter’s certificate, provided that he clarifies the numbers of the incoming certificates for the items involved in the production of the exported items, and deliver the certificate to the sub-unit that reviews and inserts it in book 46 and enters its data on the computer.
Second: The sub-unit appoints the committee that undertakes the inspection and completion of the procedures issued for the thesis as follows: – Review the data of the certificates of the exporter and include them in book 46 and enter their data on the computer. – It is permissible to amend the data of the certificate of the exporter without charging the exporter any fines or expenses because of this amendment as long as it was done before the inspection of the message. Inspection of the message and matching it with the samples obtained at customs or the exporter (in cases from which the samples were withdrawn) and re-seizing it after inspection. – Matching the data recorded in the certificate of the exporter with the actual inspection, and in the event of any violations, the provisions of the Customs Law shall apply. – In the absence of a sample achieved with the exporter, two samples of the exported item are withdrawn and seized and one of them is delivered to the person concerned, and the unit keeps the second sample, and it is allowed to export the message, provided that the unit matches the sample after Whether on the sample delivered to the exporter or the sample saved in the sub-unit.- The sub-unit shall make any corrections to what has previously been entered into the computer in the light of the actual inspection.- The unit shall hand over the exporter’s release permit to complete the shipping procedures and mark it from customs and the shipping power of attorney to indicate the completion of the export .
Delivery of the exporter a photocopy of the export certificate approved by customs and the copy is correct and acceptable for use in any of the purposes that need the export certificate – sales tax, tax refund and other uses – and the exporter may obtain any number of notarized copies of the exporter’s certificate without any financial burdens.
Article No. 8:
The following procedures shall be followed for letters sold to parties wholly or partially exempted from taxes and customs duties and required to enjoy the temporary admission system:
First:
(A) The person concerned or his representative shall complete the form prepared (Annex 1) in this regard in the sub-unit, attached to it: – – A detailed invoice for the exempted items – Supply order. – A certificate from the authority supervising the exempted entity to which it is sold, indicating the exemption document.
(B) The completed form shall be submitted to the sub-unit, which shall review and insert it in book 46 and enter its data into the computer.
Second: –
The sub-unit that inspects the letter and matches it on the certificate issued by the supervising authority, the bill of sale and the supply order. – The exemptions department in the competent customs sector reviews the exemption documents and its support and ensures that the sold items conform (in the light of the actual inspection) to the text of the exemption and marking the necessary on the form and sending it to the sub-unit to complete the procedures . The sub-unit shall hand over to the person concerned an approved certificate stating the completion of the sale to the exempted party and keep the original form to complete the response procedures under which the General Administration for the follow-up of exemptions shall be notified with a copy approved by the form for the work of its affairs .
Article No. 9:
The following procedures shall be followed when settling on the letters issued under the temporary admission system or sold to the exempted parties in accordance with this system: First: The exporter shall settle to the sub-unit or the central unit,
provided that the application specifies the following data: – Declarations of the incoming to be factored. – Declarations of the exporter approved and stating the completion of the export. – Certificate of sale to the exempted entities approved by the sub-unit
. Reports of the concerned authorities on the rates of perishing.
Second: – The unit immediately upon applying for settlement completes the procedures for settlements: – The unit immediately upon applying for settlement on the data previously stored in the central unit in which the data received from the sub-unit is collected. – Through the storage unit of the computer in the central unit, the sent data is automatically received, reviewed and verified its correctness and the amounts or guarantees that must be returned, released or settled. The central unit sends a confirmation of the return or release of guarantees to the sub-units as soon as the data is received from the sub-unit
– the sub-unit prints the computer statement (notices) of the amounts, guarantees or undertakings that will be returned, released or settled and delivered to the person concerned after stamping and registering it in a special register established for this purpose, and the person concerned may obtain a statement of the balances of the incoming bills and the balances of his guarantees
Chapter Three
Rules for the disposal of goods received under the temporary admission system for purposes other than those for which they were imported
Article 10:
Imported materials and items may be disposed of by the temporary admission system with the final release fee, whether for production or trade, in accordance with the following rules: a
) The person concerned shall complete the declaration of the release fee on the form prepared for this matter, provided that it specifies the items to be disposed of and the numbers of the declarations of the temporary release fee for these items with the fulfillment of the import rules contained in the list of rules implementing the provisions of the Import and Export Law.
b) The person concerned submits the incoming declaration to the sub-unit for review and entry of his data on the computer.
c) The unit shall appoint a committee within forty-eight hours to inspect the items to be disposed of to estimate their value, taxes, fees and expenses to be collected, and to ensure that the import leaders are met and that the approval of the quality control authority for exports and imports is approved .
In the event that this is not met, the matter shall be referred to the competent authorities to take the necessary measures in this regard.
d) After completing the incoming declaration, the sub-unit collects taxes, fees and expenses plus an additional tax of 2% per month of the value of taxes and fees due for each month as of the date of entry of these materials and items into the country.
e) The unit shall deliver to the person concerned a final release declaration for the items that are disposed of after their approval, provided that it specifies the items that have been disposed of and the approval of the temporary permit.
f) The sub-unit completes the procedures for settling the final release declaration according to the same procedures as the issued certificates.
Article 11:
The entities that have imported the temporary admission system shall make an annual inventory of what has been imported under this system under the supervision of the Customs Authority, provided that it is owned within two months at most from the date of submission of the inventory request by the person concerned, and the central unit shall be notified of the result of the inventory to take legal measures in this regard .
In the event that the representative of the Customs Authority does not appear on the date specified for the inventory, the aforementioned authorities shall complete the inventory procedures and notify the central unit of its result, and the central unit in this case may verify the results of the inventory within a week at most from the date of notification. In the event of non-verification during this period, the Central Unit shall conduct settlement operations in the same manner described in Article (9) and after fulfilling the import rules and the approval of the Quality Control Authority for Exports and Imports .
Article 12:
When disposing of what has been imported under the temporary admission system in cases other than those provided for in Articles (9) and (10), without the approval of the Central Unit, the importing entities shall apply to the Central Unit to pay the taxes, fees and expenses due on the date of entry of these items into the country to it an additional tax of 4% per month as of the date of release with a temporary allowance fee and provided that the import rules are met and the approval of the Quality Control Authority for Exports and Imports. The quantities disposed of shall be settled by the same procedures provided for in Article (9) and the export of imported materials in their original condition shall be deemed a disposal of the authorized purpose and shall result in the recovery of the guarantees provided upon receipt.
Chapter Four
Procedures for refund of taxes, customs duties and service charges
Article 13 :
Taxes, customs duties and service charges incurred by foreign materials used in the manufacture of exported local products shall be refunded on condition of their transfer to a free zone, re-exported or sold, enjoying full exemption from these taxes and fees for a period not exceeding two years from the date of release. By a decision of the Deputy Prime Minister and the Minister of Agriculture and Land Reclamation for agricultural commodities and by a decision of the Minister of Industry and Technological Development for industrial commodities, the formation of these committees includes specialists in each commodity group and a representative of the Customs Authority. The rules and procedures governing the refund of customs taxes and other taxes and fees shall be issued by a decision of the Prime Minister in the light of what is determined by the aforementioned committees and based on the proposal of the Minister of Finance and the Minister concerned with foreign trade to be effective as of the first of October 2002.
Upon any request from the production or exporting units, it is permissible to apply to the aforementioned committees to determine the taxes, customs duties and service charges to be refunded for the products of each unit itself, after presentation to the Minister of Finance and the Minister concerned with foreign trade.
Article No. 14:
A special account shall be opened at the Export Development Bank of Egypt to be used to refund taxes, customs duties and service fees on exported goods, provided that the Ministry of Finance replenishes this account for that purpose.
Article 15 :
The following procedures shall be followed regarding the refund of taxes, customs duties and service charges:
First: Goods exported outside the country or free zones. The exporter shall submit to the sub-unit a certified copy of the export certificate stating the completion of the export. The unit shall review the certificate, verify the value of taxes, customs duties and service charges in accordance with the approved refund schedules, and issue an exchange permit or “check” for the amounts due, within a period not exceeding two weeks. Disbursement shall be made from the Export Development Bank of Egypt or the unit’s treasury according to the desire of the person concerned.
Second: Goods sold to entities wholly or partially exempted: – The person concerned shall fulfill the procedures described in Article (7.– The person concerned shall submit to the sub-unit a certified copy of the certificate stating the completion of the sale to the exempted entity.– The unit shall review the certificate, verify the value of taxes, customs duties and service charges in accordance with the approved response schedules, and issue a payment permit or “check” for the amounts due, within a period not exceeding two weeks . Disbursement shall be made from the Export Development Bank of Egypt or the unit’s treasury according to the desire of the person concerned.
Chapter Five
General Provisions
Article 16:
The importer or his representative is dealt with under the temporary admission system through an automated card for dealers in this system, and the following documents are required to obtain this card: – License to practice the activity. – Import card (import card for productive projects). – Tax card. – A pledge to notify the unit dealing with any changes in the data provided .
Article 17:
For consignments received by the temporary admission system, the value of customs purposes shall be taken into account in accordance with the provisions of Articles (22) and (23) of the Customs Law and its amending laws and the Agreement on the Implementation of Article VII of the GATT Agreement and in accordance with the procedures contained in the decision of the Minister of Finance No. 765 of 2001 in this regard.