Customs regulations on the importation of goods for the mining and hydrocarbon sectors

Transcription

1 Customs regulations on the importation of goods for the mining and hydrocarbon sectors Alfredo Moreno Dávila 1. Imports Generally speaking, there is no restriction in Colombia for the importation of goods except for those that require an import license or whose importation is prohibited. As to the goods that require import license, they are indicated within a list issued by the Government and can be divided in five main categories (i) Non reimbursable imports; (ii) used goods (including some remanufactured and refurbished goods); (iii) goods subject to customs duty exemptions; (iv) goods pertaining to the Mining and Hydrocarbon sectors (hereafter M&H sectors ) and (v) goods imported by official entities. On the other hand, as to the goods whose importation is prohibited, there is a very limited list of them (e.g nuclear and toxic residues; biological, chemical and nuclear weapons among others). 1.1 Ordinary imports Import licenses Under the understanding that the importer has previously obtained the corresponding authorizations from the Mining Ministry to carry out activities related to the M&H sectors, in order to import capital goods, equipments and/or spare parts on an ordinary basis, the importer should obtain in advance import licenses according to the following events: In case of importations of brand new goods (equipments, capital goods, spare parts) that are related to the M&H sectors, the importer should obtain in advance an annual import license from the Ministry of Foreign Trade previous the authorization from the Mining Ministry. The rationale behind this is that

2 importation of goods related to the M&H sectors are controlled and therefore restricted. In case of importations of used goods (including some remanufactured and refurbished goods) that are related to the M&H sectors, the importer should obtain individual import licenses. Not all used goods can be imported but only those that are not produced within the Andean Community countries (Colombia, Ecuador,Perú an Bolivia). Otherwise, the importer should obtain an authorization letter to import the used good from the person or Company that produces that good in order to obtain the import license. In case of claims for customs duty exemptions of goods related to the M&H sectors, the importer should obtain an import license. That license can be either individual per import (in case of used goods) or annual (in case of brand new goods). Intervention of a Customs Broker In Colombia, all sort of imports over USD 1000 (FOB value) should be done through a customs broker ("agencia de aduanas" or "SIA"). The customs broker or "SIA" is responsible toward the Customs authorities for veracity and accuracy of the information contained in the import declaration including the custom duty and VAT benefits declared and the tariff classification reported. It is important to note that the SIA is not responsible toward the Customs for the customs value declared (CIF value). That is responsibility of the importer. Import charges In Colombia, ordinary imports are subject to either customs duties and VAT. As to customs duties over machinery and equipments, they are mainly 0%,5%,10%,15% and 20% over the CIF value ("ad valorem"). In addition, for some capital goods and spare parts, they may be benefited to customs duty exemptions claimed by the importer through an import license as indicated above. Currently, there is a list of about 400 items regarded as capital goods that are benefited with customs duty exemptions.

3 As to VAT, this tax accrues at 16% over the CIF value once added the applicable customs duty. Be advised that this tax impact can be avoided through application or certain special customs programs such as the short term temporary import or through application of certain VAT benefits such as the VAT exemption that applies over temporary importation of heavy machinery for basic industries, or, the VAT benefit that applies over ordinary imports of heavy machinery for basic industries (which consists on a tax payment deferral and application of a credit tax in the corresponding income tax returns of the importer). 1.2 Some trade programs or customs benefits of interest to companies pertaining to the M&H sectors Temporary imports They are of two types: 1. Short Term. Up to 9 months (in some cases this period may be extended up to 1 year previous authorization from the Customs). The short term temporary import does not accrue either duties or VAT. At the end of the term, the importer should re-export the good (to either abroad or to a Colombian free trade zone) or to import it on an ordinary basis (in the latter case the importer will have to pay the related customs duties and VAT). The importer should give to the Customs a guarantee equivalent to the 150% of the import charges (duties and VAT) that would accrue if the good(s) were imported on a ordinary basis. The customs regulations allow the importer to use without limitation the short term temporary import modality over the same good(s). Example: importation for a 6 month term of a specific capital good; re-exportation of it to a free trade zone; reimportation for another 6 month term (and so forth). 2. Long Term. Up to 5 years (in some cases, this period may be longer previous authorization from the Customs). The long term temporary imports accrue duties and VAT but the total amount liquidated in the import declaration in USD should be paid at the end of each semester in pesos according to the exchange rate of the day of payment. Example: a 5 year term temporary import. Total value of import charges USD 100; they should be paid biannually in 10 quotas of USD 10 each.

4 At the end of the term, the importer should send the good to abroad (a third country or to a free trade zone) or to import it on an ordinary basis. In the latter case, the importer will not have to pay customs duties and VAT unless they decide to finish the import regime before the expected, case in which, he will have to pay the pending quotas of import charges. It is important to note that only capital goods and their spare parts can be temporarily imported on a long term basis. Like the Short Term Temporary Imports, the importer should give to the Customs a guarantee equivalent to the 150% of the import charges (duties and VAT) that would accrue if the good(s) were imported on a ordinary basis Inward duty relief ("Plan Vallejo") Under this trade program, the M&H sector companies usually import certain raw materials necessary for the exploration and/or exploitation of oil/minerals and that are consumed in those processes (example dynamite, solvents, among others). The Plan Vallejo is a sort of agreement under which the importer may introduce certain amount of raw materials with duty and VAT exemptions. In exchange for those import charge benefits, the importer is obliged toward the Customs to export certain amount of oil/minerals extracted thanks to those raw materials consumed in the exploration and/or exploitation processes. This inward duty relief program is granted only to companies that explore and exploit oil/minerals (it does not apply to companies that provide services to these sectors). Special Customs Category of Large Importers ("Usuario Aduanero Permanente" or the Spanish abbreviation UAP ). This customs category of Large Importer (hereafter UAP) is granted by the Customs to companies that import a large volume of imports, that is to say, companies that elaborate 100 import declarations or have imported no less than USD 5 million within the 12 months before the date of the UAP request. For Large Tax Payers the aforementioned import value is reduced to USD 3 million.

5 The benefits for those importer who obtain this category are: (i) the possibility to pay the duties and VAT in the first 5 days of the following month in which those import charges were accrued (in other words, the goods are cleared without immediate payment of import charges but they are paid in the next month within the first 5 days); (ii) The goods are not usually subject to customs inspection; and (iii) the guaranty obtained by the importer to guarantee payment of the corresponding import charges which can be used to guarantee other customs obligations (like the case of the temporary imports indicated above). Anticipative Import declaration with direct unloading at the port/airport of arrival With this alternative, the importer may anticipate the import process of goods by submitting the import declaration in advance to the Customs within a period no less than 5 days as of the arrival date of the goods. In addition, the existing customs regulations allow immediate customs clearance at the port or airport where the goods will be unloaded (in Colombia that is called Direct Unloading ). Thus, the combination of an anticipative import declaration with direct unloading is a good strategy to import goods on a timely basis. 2. Exports In South America and except for Argentina, exports do not accrue any tax. Colombia is not the exemption. In Colombia, all sort of exports over USD 1000 (FOB value) should be done through a customs broker ("agencia de aduanas " or "SIA"). For the M&H sectors, the capital goods that will be exported on an ordinary basis, they should be previously informed to the Mining Ministry. 2.1 Temporary Exports Temporary export is a special customs regime enabling temporary departure of goods for a specific term, at completion of which goods should be re-imported without being subject of any change, except for the normal tear arising upon their use. Under this regime, temporary exporters should have a guaranty equal to

6 100% of the amount mentioned in the export declaration. It is worth noting that at the time of the re-import no import charges will be payable. 2.2 Temporary exports for repair This customs regime enables temporary departure of goods for a specific term for being repaired. At completion of the term authorized by the Customs, the goods should be reimported. Import charges (VAT and custom duties) will only apply to the value added to the goods abroad.