Inward processing: importing goods without paying duty and VAT up front

Goods brought in from outside the EU to be processed can be imported with customs duty and import VAT suspended, if Revenue authorises it. How it works.

Inward processing is an EU customs procedure. It lets a business import goods from outside the EU to work on them, with customs duty and import VAT suspended. The word ‘processing’ is wide: from repacking or sorting goods, through repair, to full manufacturing (Revenue).

What happens to the duty

The finished goods, or the goods unaltered, then either:

• leave the EU, in which case the suspended duty and VAT are never paid; or
• are released for sale in the EU. Duty and VAT are then paid on the imported raw materials or on the processed products.

What it saves

A manufacturer imports €100,000 of components from outside the EU. With an illustrative duty rate of 4% (real rates depend on the goods' tariff code), the charges at import would be:

If the finished products are exported, none of it is paid. A VAT-registered importer could usually reclaim the VAT anyway, so the main gain is the duty and the cash flow.

Getting authorised

• Apply through the Customs Decision System on Revenue's trader portal, with a ROS certificate.
• A Revenue official visits to agree the rate of yield (how much import goods make how much product), waste, time limits and security.
• A guarantee must be in place to cover suspended duty, usually a comprehensive guarantee.
• Authorisations can last up to five years, three for certain agricultural goods, and take about 30 days to issue.
• Occasional importers can instead apply by making the import declaration itself the application.

The procedure is closed off (‘discharged’) by sending the goods on to another customs procedure or out of the EU within the agreed period. You then account for them in a bill of discharge. Revenue's guidelines for traders set out the detail.

For VAT on ordinary imports, including postponed accounting on the VAT 3, see the VAT guide and the VAT calculator.

Work it out

• VAT calculator and VAT 3 return →

Sources

• Revenue: How do you complete a VAT 3 return? (T1, T2, T3, T4, E1, E2, ES1, ES2, PA1) (checked 16/10/2026)
• Revenue: When VAT becomes payable (19th, or 23rd on ROS; bi-monthly periods) (checked 25/10/2026)

General information, not tax advice. HeyPenny is not a tax agent.