Non-Binding Tariff Information - A Brief Explanation of the Tariff Information for Value Added Tax (VAT) Purposes
1. Dezember 2023
There is a lot of information about binding customs tariff information (BTIs), but there is also an interesting topic: non-binding customs tariff information for VAT purposes. This time, we will take a closer look at non-binding customs tariff information (in German: uvZTA) for VAT purposes.
Reduced VAT-rates in Germany (7% vs. 19%)
Only certain products, such as food-preparations, books, art objects, and other items listed in Annex 2 to the Value Added Tax Act (German abbreviation: UStG), are subject to the reduced VAT rate of 7%. This rate applies to deliveries, imports from third countries, intra-community acquisitions, and leasings. Other items not listed in Annex 2 are taxed at the standard rate of 19%, unless there is a tax exemption under Section 2 of the UStG.
Differentiating Eligible Items According to the Customs Tariff
The eligible items are listed in Annex 2 to the UStG, and their classification in the customs tariff (chapter, heading, or subheading) determines their tax rate. If a named item is in a chapter, heading, or subheading referred to in Annex 2 to the UStG, the reduced tax rate automatically applies. The allocation of these items to the customs tariff is done according to customs tariff rules.
Screenshot of the German VAT Law (UStG): source
Non-binding Tariff Information for VAT Purposes
In cases of uncertainty regarding the application of a tax reduction to a delivery or intra-community acquisition, one can seek clarification from the Education and Science Center of the Federal Financial Administration (BWZ). Alternatively, regional tax authorities, such as tax offices, can also apply for a non-binding customs tariff information for VAT purposes.
An online application can be made through the https://www.zoll-portal.de/ website with a user account. After submitting the application, you will receive an acknowledgment of receipt with a reference number and an application support document. This document allows you to attach samples or specimens. The uvZTA will then be delivered to your electronic mailbox in the Customs Portal, and you will be notified of its receipt via email.
Application by Mail
To obtain a uvZTA for VAT purposes, you should download and fill out the Application for Issuance of a Non-Binding Customs Tariff Information for VAT Purposes form (Form 0310) from the Customs Administration's website. Subsequently, you should send the application to the relevant BWZ office by mail. The uvZTA will be sent to you in written form via postal mail.
The uvZTA contains information about the currently applicable VAT rate and is made available to the applicant, their respective tax office, and the supervisory tax authority. The provision of this information is free of charge. It is important to note that all information in the uvZTA, especially the VAT rate, is non-binding and does not grant a legal entitlement to a specific classification in the customs tariff.
There is a wealth of information and legal provisions to consider when it comes to classification. If the classification is incorrect, everything is incorrect: customs duties, export declarations, preferential treatment, export control provisions, excise taxes, sales taxes, and so on.
Why Choose traide AI?
At traide, we are dedicated to the customs tariff number. Our goal with traide is to offer an intelligent software package that achieves and maintains the completeness, currency, and integrity of an entire company's product master data (sometimes millions of products) according to customs tariff requirements over time. In addition, we address the issues that arise before the actual classification process and significantly influence it. This includes, in particular, the quality of the product description, which often provides inadequate information or presents this information in an unstructured and distributed manner (e.g., in HTML format on a webshop or in product data sheets).
At its core, traide software functions as an intelligent digital customs tariff expert. It helps to quickly find the correct customs tariff number, acting as a "Tariff Assistant." It also automatically checks already classified product inventories for formal and substantive accuracy and provides feedback to the user in case of errors. The result is significantly increased throughput and a lower error rate for classified products. This frees up staff resources, creates room for scaling, and enhances security.
Do you have any questions about this? Feel free to write to us! We are happy to assist you.