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56
T H E P R I M E R U S P A R A D I G M
Customs Law: Business Traveler
Under the Oversight of Customs
Consider this experience of the former
soccer striker Karl-Heinz Rummenigge:
In 2013, the president of FC Bayern
was stopped by customs at Munich
Airport when arriving in Germany from
Qatar. He had two luxury watches in his
possession that he had failed to register
as in free circulation and to pay customs
duty on. He was fined a handsome sum
of EUR 249,000, plus an entry relating
to tax evasion was made in his certificate
of conduct.
What happens, however, if an
expensive watch is already on its owner's
wrist when leaving the country, and it
is in fact not a souvenir from a trip?
Customs law, which applies to the same
extent in all 28 European Member
States, stipulates that any goods that
leave Community territory without
specifically being registered to do so,
are given the status of non-Community
goods. When re-entering Community
territory, non-Community goods must
once again be subjected to a customs
clearance procedure, which typically
involves registering the goods for transfer
into free intra-Community traffic.
According to customs law, these goods
would constitute return goods, which are
generally exempt from customs duty.
Business travelers carry valuable
objects, often unknowingly ­ laptops,
company cell phones or product samples,
just to name a few. Upon re-entering
the country, customs typically asks
where the goods in fact originated.
Because only very few travelers carry
purchase receipts with them for their
personal luggage, it becomes impossible
to provide receipt evidence during
a customs check. This might result
in import duty notices and penal
proceedings.
The solution to this problem is to
register with customs any objects the
traveler carries prior to leaving the
country and to have "identification
measures" performed. The traveler will
then be given a written confirmation
about the goods being exported with a
detailed description of their quality or
with serial numbers. When returning,
the traveler then once again registers
the goods presenting the certificate. The
goods are then exempt from customs as
return goods.
Please note:
When carrying cash amounts
of EUR 10,000 or more (or the amount of
U.S. dollars equal to that), the process is
similar. Though importing cash is always
duty free, registering serves to combat
international money laundering. Offenses
against the registration obligation
usually result in penalties of 25% of
the amount carried if the irregular
transfer was deliberate. Even if this was
a negligent action, the penalty rate is
still 12.5%. This is a significant penalty,
which could easily be avoided.
International ­ Europe, Middle East & Africa
Dirk Pohl, an attorney and certified tax law specialist, focuses on
tax law, fiscal offenses and tax frauds. He assists clients in creating
reports for tax authorities concerning false or incomplete tax
declarations. He also advises individuals, businesses and nonprofit
organizations on all aspects of the German sales tax law, income tax
law, corporate tax law, commercial tax law, estate tax law, the tax
code and the customs code.
WINHELLER Attorneys at Law &
Tax Advisors
Europa-Allee 22
Frankfurt am Main, Germany D-60327
+49 69 76 75 77 80 Phone
+49 69 76 75 77 810 Fax
info@winheller.com
winheller.com
Dirk Pohl