Temporary periodic declaration: a practical guide
9 October 2023
Tax Messenger
Tax Messenger
Temporary periodic declaration is a special type of declaration that is used when the exact quantity and/or customs value of exported goods is not known at the time of declaration.
This is of key importance for exchange-traded goods, where the ultimate price depends on the quotation period, as well as for transactions in which the price of goods may vary depending on the circumstances of their receipt.
Temporary periodic declaration is not, strictly speaking, the only form of special declaration that can be used when exact information on goods is unknown, but it is effectively the only one still available following the introduction of flexible export duties for a broad range of goods.
This is of key importance for exchange-traded goods, where the ultimate price depends on the quotation period, as well as for transactions in which the price of goods may vary depending on the circumstances of their receipt.
Temporary periodic declaration is not, strictly speaking, the only form of special declaration that can be used when exact information on goods is unknown, but it is effectively the only one still available following the introduction of flexible export duties for a broad range of goods.
Effective 1 October 2023, flexible export duties apply to almost the full range of goods.[1] The Ministry for Economic Development will set duty rates on a monthly basis, given the weighted average rate of the ruble:
- 0% when the exchange rate < 80 ₽/$
- 4% when the exchange rate is 80-85 ₽/$
- 4.5% when the exchange rate is 85-90 ₽/$
- 5.5% when the exchange rate is 90-95 ₽/$
- 7% when the exchange rate > 95 ₽/$
Read more about the procedure and restrictions for temporary periodic declaration as well as other aspects in the following guide.
Restrictions on temporary periodic declaration
Temporary periodic declaration cannot be used in the following cases:
The courts have repeatedly stated that this restriction should not apply when a ruling against a declarer has not been executed, but it is the customs authority that is charged with execution – for example, in the form of confiscation by court decision.
The Russian Government may determine that this restriction does not apply – for example, to fertilizer exported under a license of the Ministry of Industry and Trade.
The Russian Government may determine that this restriction does not apply. It thus does not apply in connection with the entry into force of Decree No. 1538 of the Russian Government of 21 September 2023, introducing flexible export duties until the end of 2024.
These restrictions (except that on goods in Group 44 of the TN VED EAEU) do not apply if the declarer has paid customs duties and taxes of over RUB 100 million in the previous year.
Temporary periodic declaration cannot be used in the following cases:
- Rulings against the declarer have entered into force, but not been executed, in cases involving customs-related administrative offenses.
The courts have repeatedly stated that this restriction should not apply when a ruling against a declarer has not been executed, but it is the customs authority that is charged with execution – for example, in the form of confiscation by court decision.
- The declarer has carried out foreign economic activity for less than one year and has exported goods from Russia less than twelve times.
- A decision has been passed placing quantitative limitations on goods or other economic prohibitions or restrictions on their export from Russia.
The Russian Government may determine that this restriction does not apply – for example, to fertilizer exported under a license of the Ministry of Industry and Trade.
- A decision has been passed to introduce export duties or increase export duty rates. In this case, temporary periodic declaration cannot be used for 12 months after such decision enters into force.
The Russian Government may determine that this restriction does not apply. It thus does not apply in connection with the entry into force of Decree No. 1538 of the Russian Government of 21 September 2023, introducing flexible export duties until the end of 2024.
- The exported commodity is timber, timber products or wood charcoal classified in Group 44 of the TN VED EAEU.
These restrictions (except that on goods in Group 44 of the TN VED EAEU) do not apply if the declarer has paid customs duties and taxes of over RUB 100 million in the previous year.
Procedure for temporary periodic declaration
The procedure for temporary periodic declaration can be summarized as follows:
The procedure for temporary periodic declaration can be summarized as follows:
The information declared in a TCD should be based on the terms of the foreign trade transaction, including how the price will be determined and when the goods are to be exported – in part for purposes of determining when the full customs declaration with precise information should be filed. See Step 5 for details.
Declaring information in a TCD that differs from what is subsequently declared in the full customs declaration entails no liability, since such information is considered provisional until corrected in the full declaration.
At the same time, exporting goods in a quantity greater than that declared in a TCD is prohibited, and there have been cases in which the customs authorities held declarers to administrative liability for failing to properly declare goods when more goods were actually exported than were declared in a TCD.
It should be noted that the courts have tended to side with foreign trade operators in such cases. In 2021, for example, the Russian Supreme Court ruled that the charge of failure to declare goods does not apply if an “excess” quantity of goods is declared in a full customs declaration.[2]
Also, at the declarer’s discretion, certain goods in Group 27 of the TN VED EAEU that come under different classification codes may be declared in a TCD under a single code corresponding to the highest level of export duty rate.[3] In this case, information on the TN VED EAEU code may be corrected in the full customs declaration.
Declaring information in a TCD that differs from what is subsequently declared in the full customs declaration entails no liability, since such information is considered provisional until corrected in the full declaration.
At the same time, exporting goods in a quantity greater than that declared in a TCD is prohibited, and there have been cases in which the customs authorities held declarers to administrative liability for failing to properly declare goods when more goods were actually exported than were declared in a TCD.
It should be noted that the courts have tended to side with foreign trade operators in such cases. In 2021, for example, the Russian Supreme Court ruled that the charge of failure to declare goods does not apply if an “excess” quantity of goods is declared in a full customs declaration.[2]
Also, at the declarer’s discretion, certain goods in Group 27 of the TN VED EAEU that come under different classification codes may be declared in a TCD under a single code corresponding to the highest level of export duty rate.[3] In this case, information on the TN VED EAEU code may be corrected in the full customs declaration.
Export duties are paid before goods are released in an amount based on the quantity and/or provisional customs value declared in the TCD.
The applicable rates of export duty and ruble exchange rate are those in effect on the day the customs authority registers the TCD.
When the quantity and customs value of goods and the rates of export duty and/or ruble exchange rate are subsequently finalized, additional customs duties are paid, or overpaid duties are refunded. See Step 6 for details.
Important tax information: It remains unclear whether a temporary customs declaration with the customs authority’s notes indicating that goods have departed can be used to substantiate a zero rate of VAT. The Ministry of Finance has repeatedly stated that a full customs declaration should be filed with the tax authorities to substantiate a zero rate of VAT. The Federal Tax Service has, on the contrary, said that the filing of a temporary customs declaration does not constitute grounds for denying a zero rate of VAT. This is still an open question, as confirmed by the litigation concerning this issue.
The applicable rates of export duty and ruble exchange rate are those in effect on the day the customs authority registers the TCD.
When the quantity and customs value of goods and the rates of export duty and/or ruble exchange rate are subsequently finalized, additional customs duties are paid, or overpaid duties are refunded. See Step 6 for details.
Important tax information: It remains unclear whether a temporary customs declaration with the customs authority’s notes indicating that goods have departed can be used to substantiate a zero rate of VAT. The Ministry of Finance has repeatedly stated that a full customs declaration should be filed with the tax authorities to substantiate a zero rate of VAT. The Federal Tax Service has, on the contrary, said that the filing of a temporary customs declaration does not constitute grounds for denying a zero rate of VAT. This is still an open question, as confirmed by the litigation concerning this issue.
If the customs authority has decided to conduct a customs inspection or goods inspection and/or customs expert examination, these are done after goods are released under the TCD, when actions are taken directly for the purpose of exporting the goods.
A temporary periodic declaration allows goods to be shipped and exported within a specific period of time as a single shipment, i.e. a single TCD may be filed for all goods, and information on the exported goods may be corrected at the stages of full and final declaration. See Step 5 for details.
After goods are actually exported, the declarer must file one or more full customs declarations containing precise information on the quantity and/or customs value of the actually exported goods.
As already noted, the TN VED EAEU codes may, in come cases, be corrected in the full customs declaration.
In all other cases, a full customs declaration cannot be used to correct information declared in a TCD. At the same time, the law does not restrict a declarer’s right to make changes in either a TCD or a full customs declaration.
Since temporary periodic declaration allows goods declared in a single TCD to be exported in several shipments within a specific period, there are two types of declarations giving full information on actually exported goods:
(1) A full declaration for a TCD
(2) A final declaration, filed when all goods have been supplied under a TCD
The customs authority sets the time limits for full and final declarations based on when precise information is expected to be available on the quantity and customs value of the exported goods. Based on a substantiated request by the declarer, the time limit for filing full and final declarations may be extended by the customs authority, but may not exceed:
If goods declared in a TCD are not actually exported, such a TCD should be withdrawn. Failure to meet these requirements may entail administrative liability for violating the time limits for filing a full customs declaration.
As already noted, the TN VED EAEU codes may, in come cases, be corrected in the full customs declaration.
In all other cases, a full customs declaration cannot be used to correct information declared in a TCD. At the same time, the law does not restrict a declarer’s right to make changes in either a TCD or a full customs declaration.
Since temporary periodic declaration allows goods declared in a single TCD to be exported in several shipments within a specific period, there are two types of declarations giving full information on actually exported goods:
(1) A full declaration for a TCD
(2) A final declaration, filed when all goods have been supplied under a TCD
The customs authority sets the time limits for full and final declarations based on when precise information is expected to be available on the quantity and customs value of the exported goods. Based on a substantiated request by the declarer, the time limit for filing full and final declarations may be extended by the customs authority, but may not exceed:
- 8 months after the registration of a TCD – for goods that are not subject to export duties or to which restrictions do not apply
- 6 months after the registration of a TCD – for goods that are subject to export duties or to which restrictions apply
If goods declared in a TCD are not actually exported, such a TCD should be withdrawn. Failure to meet these requirements may entail administrative liability for violating the time limits for filing a full customs declaration.
Additional export duties may be charged in the following situations:
1) Corrected information on goods results in increased amounts of export duties
2) The rates of export duty increase. The rates applied when filing a full customs declaration are those in effect on the date of actual export, defined as the date on which the customs authority makes technical notes on shipping or other documents permitting goods to depart.
3) The official rate of foreign currency against the ruble declines
If a full customs declaration is filed within the time limit set by the customs authority and within the maximum filing period, no penalties are charged on customs duties.
Strictly speaking, additional customs duties must be paid at the time when the full customs declaration is filed.
or
1) Corrected information on goods results in increased amounts of export duties
2) The rates of export duty increase. The rates applied when filing a full customs declaration are those in effect on the date of actual export, defined as the date on which the customs authority makes technical notes on shipping or other documents permitting goods to depart.
3) The official rate of foreign currency against the ruble declines
If a full customs declaration is filed within the time limit set by the customs authority and within the maximum filing period, no penalties are charged on customs duties.
Strictly speaking, additional customs duties must be paid at the time when the full customs declaration is filed.
or
If the amount of customs duty is less than expected due to a correction in the full customs declaration or a reduction in the rate of customs duty or the official ruble exchange rate, the amount overpaid under a TCD may be refunded.
Other aspects of temporary periodic declaration
Completion of temporary and full declarations
Section 104of Decision No. 257 of the Customs Union Commission of 20 May 2010 approved details involved in completing temporary periodic declarations.
Customs fees
A customs fee of RUB 7,750 is charged for processing a TCD.
When a full customs declaration is subsequently filed for the same goods, a customs fee of RUB 22,250 is charged for each full customs declaration.
The law provides an exemption from customs fees in cases where a zero rate of export duty applies.
Completion of temporary and full declarations
Section 104of Decision No. 257 of the Customs Union Commission of 20 May 2010 approved details involved in completing temporary periodic declarations.
Customs fees
A customs fee of RUB 7,750 is charged for processing a TCD.
When a full customs declaration is subsequently filed for the same goods, a customs fee of RUB 22,250 is charged for each full customs declaration.
The law provides an exemption from customs fees in cases where a zero rate of export duty applies.
How we can help
1. Design a scheme for declaring exported goods, taking the specifics of temporary periodic declaration into account. Develop a procedure for correcting and modifying information declared in temporary and full declarations.
2. Provide practical and legal support during customs control of exported goods following their release.
3. Assist in selecting the most appropriate method of determining the customs value of exported goods.
4. Advise on documenting eligibility for a zero rate of VAT on goods exported under temporary customs declarations.
5. Advise on a full range of customs regulation issues.
6. Represent clients’ interests in litigation with the customs authorities.
1. Design a scheme for declaring exported goods, taking the specifics of temporary periodic declaration into account. Develop a procedure for correcting and modifying information declared in temporary and full declarations.
2. Provide practical and legal support during customs control of exported goods following their release.
3. Assist in selecting the most appropriate method of determining the customs value of exported goods.
4. Advise on documenting eligibility for a zero rate of VAT on goods exported under temporary customs declarations.
5. Advise on a full range of customs regulation issues.
6. Represent clients’ interests in litigation with the customs authorities.
[1] Decree No. 1538 of the Russian Government of 21 September 2023.
[2] Determination No. 305-ES21-1301 of the Supreme Court of the Russian Federation of 22 March 2021 in Case No. А40-48048/2020.
[3] Decree No. 1318 of the Government of the Russian Federation of 3 November 2018.
[2] Determination No. 305-ES21-1301 of the Supreme Court of the Russian Federation of 22 March 2021 in Case No. А40-48048/2020.
[3] Decree No. 1318 of the Government of the Russian Federation of 3 November 2018.
Authors:
- Wilhelmina ShavshinaPartnerGlobal Trade and Customs Leader
- Vladislava GritskovaManagerGlobal Trade and Customs
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