Personal property (Article 2 ff. Council Regulation (EEC) No. 918/83)
The constantly strengthening trend towards globalization calls for high levels of geographical flexibility, especially in the occupational sector. But also in the private sphere, more and more have contacts and relationships across borders, and even across continents. It is therefore no longer out of the ordinary for people to go and live in another country. However, having to pay duty on personal property - furniture, clothing, and, in short, the entire "household effects" - would decidedly hamper this development as people wanting to transfer their place of residence to within the EU would be confronted with virtually insurmountable costs. To take account of this, and provided certain conditions are fulfilled, EU customs law allows socalled "personal property" to be exempted from the import duties/taxes that would normally be payable on it.
What is personal property?
One of the most important questions for anyone planning to transfer their place of residence from a third country to the EU is doubtless which of their goods and chattels are eligible for relief from duties and which ones are not. As the term "personal property" by itself is capable of interpretation and may lead to misunderstandings, a definition of what constitutes "personal property" is contained in Council Regulation (EEC) No. 918/83 (Article 1 Clause 2 Letters c) and d) of the Regulation). According to this, personal property comprises:
- Household effects,
i.e. all personal effects, household linen, furnishings and equipment intended for personal use by the beneficiary or in the household;
- Private vehicles of all kinds,
i.e. cycles and motor cycles, private motor vehicles (and their trailers), camping caravans, pleasure water craft and private aeroplanes;
- Household provisions,
in quantities appropriate to normal family requirements - meaning appropriate at the former place of residence in the third country;
- Pets and saddle animals;
- Portable instruments and equipment needed for the exercise of skilled or professional activities provided the person transferring his/place of residence needs them for exercise of his/her profession.
A common requirement for all these items is that although they are not subject to any specific quantity restrictions, they must not, by their nature or quantity, indicate that they are being imported for commercial reasons. Thus, if a person were to declare twenty new bicycles as personal property, this would certainly give rise to the suspicion that he/she had the intention of selling them in the customs territory of the Community without paying duty on them.
What does not count as personal property?
According to the Regulation (Article 5), the following do not count as personal property:
- Alcoholic products,
i.e. beer, wine, aperitifs with a wine or alcohol base, brandy, liqueur, spirits etc.;
- Tobacco and tobacco products;
- Commercial vehicles;
- Items for commercial use, except portable instruments and equipment needed for skilled and professional activities.
- on the part of the beneficiary:
The most important precondition on the part of the beneficiary for the granting of customs relief on personal property is that the relocating person - who must be a natural person - is transferring his/her normal place of residence to the customs territory of the Community (Article 2 of the Regulation).
Additionally, before moving into the EU, the beneficiary must have lived - i.e. have had his/her normal residence - for at least twelve months outside the customs territory of the Community (EU) (Article 4 of the Regulation). Exceptions from this rule are, however, possible, if the beneficiary can show that he/she at least clearly intended to live for twelve months or more outside the EU.
A German employee transfers his normal place of residence from Berlin to Mexico City in order to take up a new job there. For health reasons, however, he is forced to give up the job after only ten months and return to Germany. In this case, it is no problem that he has lived abroad for less than twelve months as it was his clear intention - as proved by his employment contract - to live in Mexico permanently. His personal property, which he has entered for release for free circulation within the EU customs territory, is therefore eligible for relief from duty.
- on the part of the personal property:
The goods which have been declared as personal property must also fulfil certain conditions in order to qualify for exemption from import duties. First, the goods must constitute personal property within the meaning of the Regulation (Article 1 Clause 2 Letter c) of the Regulation); they must also not be excluded from relief under Article 5 of the Regulation (see above). Additionally, the goods must be the actual property of the beneficiary and have been used by him/her - in the case of non-consumable goods - for at least six months prior to transfer of the normal residence to the EU (Article 3 Letter a) of the Regulation). Proof of this must be provided in the form of invoices, purchase contracts etc. Additionally, the personal property may only be used at the new place of residence in the EU for the same purposes as at the former place of residence (Article 3 Letter b) of the Regulation).
Finally, customs relief may only be granted if the personal property is entered for free circulation within twelve months from the person concerned establishing his/her normal place of residence within the EU (Article 6 of the Regulation). That need not be done all at once, and the beneficiary can import his/her personal property in several part-consignments, but altogether, the twelve-month limit must not be exceeded. For all further details, e.g. premature import of the personal property, non-compliance with the twelve-month limit, please contact your competent customs office.
Clearance of the personal property by a German customs office will be conditional on the personal property being initially used for the intended purpose in Germany itself, i.e. if the new place of residence - even if only temporarily - is in Germany.
Where motor vehicles or private aeroplanes are declared as personal property, a certification by the competent authority in the third country must be presented as proof that the vehicle or aeroplane was registered in that country in the name of the person concerned.
In the case of goods for which it is intended to claim special relief, the application for release for free free circulation must always be made in writing. To apply for relief, Form 0350 (Vordruck 0350) "Zollanmeldung für die Überführung von Übersiedlungsgut in den zollrechtlich freien Verkehr zur besonderen Verwendung" must be used.
Pursuant to German motor vehicle tax law ("Kraftfahrzeugsteuergesetz" - KraftStG), motor vehicle road tax must be paid on vehicles which are registered in a third country and which are declared at a German border customs post for release into free circulation in the customs territory - e.g. as personal property - if they drive into the customs territory of the Community on their own wheels. The law does not provide for any exemption for journeys to the place of registration in Germany. The driver must present a tax declaration form to the German border customs post and pay the tax immediately. After payment of the tax, the border customs post will issue a tax card with receipt as proof of payment.
Use for intended purpose only
In order to prevent goods from being imported as personal property duty-free although they are in fact intended for commercial use, the personal property will remain under customs supervision even after release for free circulation in the customs territory. This means that the owner has only a limited right of disposal in relation to the personal property. Thus, for a period of twelve months starting from the date of receipt of the application for release for free circulation, the owner may not transfer or assign the personal property to any other person; i.e. he/she may, in particular, not:
- give as security,
- hire out,
- sell or
- give the property away.
In the event of any breach of this provision, i.e. if the owner should withdraw the goods from customs supervision, the customs relief will become void and the import duties and taxes due on the goods will be charged; other fines or punishments may also be imposed (Article 7 of the Regulation).
Import VAT and special excise duties
Goods which are deemed personal property within the meaning of the law and as such are released for free circulation with relief from customs are also exempt from both import VAT and any other special excise duties which would otherwise normally apply (§ 1 Clause 1 EUStBV (Import VAT Relief Ordinance), § 1 Clause 1 No. 1 EVerbrStBV (Import Excise Duty relief Orinance)).