Examples of declaring the HS of the EAEU, definition of the HS code – Quadcopter – TKS.RU

The TKS system is a modern telecommunications channel, an electronic version, which is characterized by convenience, accessibility, and high speed. Moreover, when transmitting current information and documents through the system, there is no need to duplicate them on paper. This feature provides significant savings in time and effort for representatives of various organizations.

Today, more than 70% of the total number of taxpayers already submit declarations through TCS. This option simplifies additional control when filling out reports.

In essence, TCS is a telecommunications channel, the use of which allows you to transmit any necessary reports electronically if you have access to the Internet.

Reporting work via TCS

All innovations in the tax industry related to the practical use of telecommunication systems are reflected and recorded in Order No. 534 of the Federal Tax Service of the Russian Federation.

Today, declarations are being provided more and more often through TCS; accounting and tax reporting is available to individual entrepreneurs and all legal entities.

Actually, the system is an updated version of interaction between taxpayers and representatives of the Federal Tax Service, if necessary, to provide up-to-date reporting and other documents. TCS gives you this opportunity, now you don’t need to wait in line at the tax inspector’s offices. It is enough to take advantage of the modern functions of the Internet.

Improving the TCS system

Initially, the requirements for TKS were set back in 2007. To date, the system has been refined and improved. In particular, the mechanism for maintaining electronic document flow has now been significantly simplified. Due to the fact that the likelihood of errors on both sides is minimized, the reliability of this service has also increased significantly. Thus, today it is impossible to submit information through TKS if it does not match the data reflected in the register of taxpayers, that is, any outdated information.

Moreover, the special program will send an additional notification via TKS in relation to an LLC or any other organization that the reporting has not been accepted.

It is important to remember that individual taxpayers receive negative responses. This happens in cases where they have not submitted information to the Federal Tax Service regarding an authorized representative, that is, a person who will represent their interests in the field of taxation.

To better understand the peculiarities of the TCS system in Moscow and the regions, representatives of tax authorities recommend that payers familiarize themselves with Order 534 of the Federal Tax Service.

Examples of declaring the HS of the EAEU, definition of the HS code – Quadcopter – TKS.RU

Every year, consumer goods become more and more multifunctional, combining a wide range of features and technical characteristics. When imported into the territory of the Russian Federation, the variety of product groups leads to the complication of their classification and difficulties in choosing EAEU HS codes. And this, in turn, entails an increase in customs duties for the owners of the goods.

This situation is well illustrated by the case of the import of quadcopters into the territory of the Russian Federation and legal proceedings with the St. Petersburg customs in connection with changes to the EAEU HS codes in the declaration.

The subject of the trial was a dispute between the Company, which imported quadcopters, whose interests were represented in court by the lawyer of the company “Kiryukhin and Partners” Alexey Mikhailyuk, and the St. Petersburg customs, which made changes to the declaration of goods, regarding the classification of goods according to the EAEU HS codes ( case No. A56-115770/2021).

Currently, when importing propeller-driven aircraft (quadcopters) into the Russian Federation, declarants face difficulties in classifying them depending on their characteristics. This is due to the fact that quadcopters that come complete with photo and video cameras can be classified under three HS codes:

• 8802 aircraft
• 8525 cameras
• 9503 toys

The legislative framework for the classification of quadcopters was established by the Decision of the Board of the Eurasian Economic Commission dated October 30, 2021 No. 172 “On the classification of quadcopters in accordance with the Unified Commodity Nomenclature for Foreign Economic Activity of the Eurasian Economic Union.”

Paragraph 1 of this Decision provides a detailed explanation of a quadcopter with a video camera, which is classified in commodity item 8802 of the EAEU Commodity Nomenclature for Foreign Economic Activity. A quadcopter is a four-rotor aircraft used for various purposes. It can be equipped with photo and video equipment or other equipment that has built-in receivers of navigation systems (GPS, GLONASS, etc.). The device is controlled remotely by an operator from the ground or from another aircraft. It can also carry out automated flight and follow a pre-programmed route. According to paragraph 2 of the Decision, a quadcopter not equipped with photo and video equipment is classified in commodity item 9503 of the EAEU Commodity Nomenclature for Foreign Economic Activity.

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Despite these clarifications, in judicial practice you can find cases when quadcopters are declared under code 8525 “other recording video cameras” during customs declaration (for example, the Resolution of the Arbitration Court of the Moscow District dated September 24, 2021 in case No. A41-3189/2021).

It is obvious that customs authorities currently do not have a unified approach to the classification of quadcopters. This was precisely the main topic of the legal dispute with St. Petersburg customs.

As follows from the case materials, in August 2021 the Company imported quadcopters into the Russian Federation, designated as toys with a built-in engine. The following characteristics of the device were noted:

• radio-controlled quadcopter with a flight range of up to 50 m;
• The battery capacity allows flight for 5-7 minutes;
• the product is compact, lightweight, quadcopter size: 30x7x30 cm;
• main purpose - piloting;
• flight control is carried out only manually from the ground and is controlled by visual observation;
• Included with the device is a video camera, which is attached to the quadcopter with special mounts on the underside of the fuselage;
• The camcorder comes with a card reader and a 4 GB microSD memory card, which records information from the camcorder;
• The quadcopter is not equipped with built-in or external receivers for GPS, GLONASS, etc. navigation systems.

The customs authority, in the course of checking the correctness of determining the classification according to the Commodity Nomenclature of Foreign Economic Activity of the EAEU, requested from the Company additional documents and information confirming the technical characteristics of the goods.

Based on the results of the analysis of the submitted documents, St. Petersburg Customs decided to classify imported goods according to code 8525 80 990 9 “Equipment transmitting for radio broadcasting or television, including or not including receiving, sound recording or sound reproducing equipment; television cameras, digital cameras and video recording cameras,” which resulted in additional customs duties and duties for the Company.

The customs authority proceeded from the fact that the main classification feature of a quadcopter is its definition as an aircraft equipped with a photo-video camera for recording images on an internal storage device or media. That is, according to customs, it was the presence of a photo-video camera that was the main characteristic of the product, allowing the device to be classified as a video camera.

See about copters: “Drones”: the main thing you need to know about them – ilex

When choosing a HS code, customs applied the following logic:

• the product is supplied together with a video camera and thus, in accordance with clause 2 of Decision No. 172 of October 30, 2021, does not fall under the characteristics of HS code 9503;
• The product does not have built-in receivers of navigation systems (GPS, GLONASS, etc.), which does not allow the product to be classified under HS code 8802.

At the same time, customs did not conduct a detailed study of the goods, nor did they assess the functional role of the camera in the quadcopter as a single complex.

The company, whose interests were represented in court by a lawyer from the company “Kiryukhin and Partners,” appealed the decision of the customs authority on the classification of goods and changing the HS codes. The Arbitration Court of St. Petersburg and the Leningrad Region supported the position of the Company, as well as the court of appeal.

In making a decision in favor of the Company, the courts proceeded from the following:

• the quadcopter can be used without a video camera, the absence of a camera does not affect the performance of the quadcopter and allows for correct flight;
• the video camera does not perform flight control function;
• the video camera included in the kit comes separately and is attached at the user’s request, the camera is a quick-detachable element;
• Direct video transfer to the device is not carried out.

Contrary to the customs’ arguments, the court indicated that the presence of a video camera in a product is not a basis for classifying it as a commodity subheading 8525 80 990 9 “other recording video cameras,” since the product as a whole is intended for entertainment purposes, and it is technically possible to use a quadcopter separately from a video camera.

The appellate court indicated that, taking into account the completeness, design and operating principles of the quadcopter, the court of first instance rightfully concluded that the goods declared by the Company are a type of toys, which, as an additional function, has the ability to videotape or photograph objects from a height. At the same time, the customs authority did not provide evidence of the presence of built-in receivers of navigation systems (GPS, GLONASS, etc.) in the controversial quadcopters.

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Thus, the courts came to the conclusion that the product is a device in which the video camera is not directly involved in flight control and stabilization, and therefore cannot serve as a determining feature when choosing the EAEU HS code.

If you look at the judicial practice, the Supreme Court of the Russian Federation in case No. A09-12191/2021 indicated that when considering disputes about the classification of goods in accordance with the basic rules of interpretation of the Commodity Nomenclature of Foreign Economic Activity (OPI) 1 and 6, the objective properties and characteristics of such goods that are important for correct classification, according to the description of the relevant headings or subheadings.

The case study on the import of quadcopters, examined in detail, once again proves that a more detailed study of the characteristics of the product, their impact on the overall functioning, establishing the relationship of components with the base element, can be a determining factor in the classification of goods and, as a consequence, in calculating the amounts of customs duties and duties

Reporting on TCS

The modern world is characterized by dynamic development. Now you don’t need to wait in long lines and waste your own time in order to timely submit the necessary reports to the regional branches of the tax office. Declaration according to TKS is a quick and effective solution to the problem.

Now, to transmit accounting and tax reporting, all you need is Internet access. In addition, you will need to conclude an additional agreement with the selected telecom operator, which will secure this channel for transmitting information to the tax authorities. They will also provide you with examples for TKS and explain how to fill them out.

Systems of telecommunication communication channels are now functioning in many Russian regions. They eliminate the need to work with paper media and also speed up the verification of information provided by organizations. You can submit data daily, around the clock, at any convenient time, without breaks or days off.

The popularity and demand for transmitting documents via TCS is increasing. This type of document flow guarantees the expanded implementation of electronic systems and similar services available to taxpayers.

Specialized company

TCS declaration examples, continuous training, monitoring updates in legislation, adoption of new restrictions or conditions - these are the cornerstones on which the work of a correct executor of the assigned tasks for processing the transportation of goods across borders rests.

“SertRF” has a whole staff of people who have been successfully overseeing the transshipment of goods across borders for several years now. In addition, the company’s specialists certify, test in laboratories, and transport goods.

Advanced system capabilities

With the development of modern technologies, opportunities are expanding significantly. Now all current accounting and tax documents can be transmitted to the recipient electronically. But the possibilities of the service do not end there. Examples of using TCS are as follows:

• Transfer of current documentation.
• Obtaining information on fees and charges.
• List of accounting and tax reporting for the past year.
• Obtaining certificates of tax calculations made (such information may be required from the bank and other organizations).
• Receive a statement reflecting the completed calculations with the budget.
• Tax reconciliation reports, including those from the TKS for customs.
• Certificates of fulfillment of existing tax obligations.

Banks and customs are no less actively using the capabilities of TCS.

Ways to determine the HS code

In practice, there are several ways to help you choose a foreign trade code for a product:

1. Work with online services. This path is the simplest. You just need to know what product you are working with and what its characteristics are. This information can be obtained from the supplier or from the contract specifications.
2. Consult with colleagues. You can ask for the number from companies or entrepreneurs who work with the same products as you. However, this method, as you yourself understand, is not the most reliable.
3. View past documents. If you have already worked with this type of product, you can find old declarations and compare the characteristics. If everything matches, then the product number will be similar to the previous one. The declaration must contain o. However, you need to use this method only if you are transporting the goods through the same customs office that gave you this mark last time.
4. Determine by classifier. This method is the most difficult, since among many groups of products you need to find the one. If your product is a component of another or there are very similar product items, there is a possibility of an error.

Selecting a code from the HS classifier is quite difficult; it requires a lot of attention to detail. Sometimes difficulties arise even for experienced customs brokers.

Transmission of reports via TCS

Convenience and simplicity are the main parameters for using TCS. If the number of employees in a particular organization exceeds one hundred people, then it is obliged to transmit current information via TCS. This is enshrined at the legislative level. The number is estimated on average over the last 12 months.

Thanks to the capabilities of TCS for customs and others, a special report is generated, which includes all those tax payers who are required to transmit information through telecommunication systems. This is explained by the fact that it is much easier for representatives of competent authorities to check documentation that is presented electronically from large organizations.

Moreover, individual entrepreneurs still have the opportunity to choose the most convenient method of submitting information. But many representatives of individual entrepreneur groups are also inclined to use TCS.

Despite the youth of electronic document management, the popularity of TCS in customs and taxation is steadily increasing.

Features of reporting

When using telecommunication channels, taxpayers are provided with two different methods of data transmission. This:

• via the Internet from any convenient location;
• when visiting specialized centers.

The fact is that the Federal Tax Service does not directly accept the necessary reports. This function is assigned to telecommunications and others. Each of them is connected with the tax office through a concluded agreement. Therefore, specialized companies transmit information received from taxpayers using communication channels with appropriate protection to the local Federal Tax Service authorities.

In turn, such organizations enter into agreements with taxpayers. Reporting transfer services can be provided either on a paid or free basis. In any case, they undertake to transmit data to the tax office via secure channels. At the same time, the payer issues a corresponding power of attorney for such an organization, within the framework of which the telecommunications company receives the opportunity to submit documentation to the tax office.

How to submit reports through a telecommunications company?

The simplest and most accessible option for using TCS for customs and tax authorities is for organizations to submit reports at the offices of a specialized company, and the data is immediately provided on electronic media. Then all information is transferred without charging additional fees, only by proxy. The disadvantage of this option is the need for authorized employees to personally visit the offices of such companies.

There is another, more convenient option, when transferring documentation only requires Internet access. But in this case you will have to pay for the service (usually paying for annual subscriptions). Even under such conditions, you will have to conclude a special agreement with TKS.

The advantage of this option is significant time savings. But through such companies it is possible to submit the necessary documentation to both the tax and statistical authorities, the Social Insurance Fund and even the Pension Fund, which is also very convenient for users (managers of large and small enterprises).

Everyone chooses the most suitable option for themselves.

Reporting

Thanks to the active spread of telecommunication systems in the field of information transmission, the process of generating reporting as such has been significantly simplified. Now specialized software is offered, which is interfaced with a number of popular programs designed for accounting. We are talking about a number of common products like 1C. Moreover, TKS in customs and taxation are regularly updated, as is the software for implementing their main functions.

Working with such programs is simple. This was achieved thanks to an accessible and understandable interface, along with the ability to compile the required documents manually, relying on information taken from various sources. At the next stage, the prepared forms and forms are simply sent for printing.

Completed papers are submitted electronically through the TCS office or via the Internet upon conclusion of the relevant agreement in advance. Both options are equivalent - ultimately, the tax information will be sent encrypted.

Advantages of telecommunication systems

As noted above, telecommunication systems began to be used in practice quite recently. Nevertheless, their popularity is growing quickly and rapidly. This is largely due to their main advantages, including the following:

• the ability to transfer data from any convenient point where there is Internet access - from the office, home or any other place;
• timely monitoring of compliance with established deadlines;
• convenience and comfort of using TCS systems;
• eliminating random errors when generating the necessary reports automatically;
• instant transmission of information;
• Possibility of use at any convenient time and days of the week.

That is, the main advantage is the complete rejection of outdated and inconvenient paper media, along with the presence of arithmetic and logical checks even at the stage of document generation. The latter eliminates not only errors, but also the subsequent submission of updated information.

At the same time, the Federal Tax Service pays special attention to the fact that the introduction of telecommunication systems increases opportunities for remote work, improves the quality of service for taxpayers, and reduces personal visits to tax authorities.

Customs officer's work

You can find a lot of examples of declaring goods under the Commodity Nomenclature of Foreign Economic Activity (customs invoice for foreign economic activity): if you fill it out incorrectly, troubles may arise.

False declaration entails penalties of 10 thousand rubles.

In this case, a repeated violation doubles the amount of the fine.

In this case, it is easier for the customs officer to work: the invoice number is dictated to him, he looks through the database to ensure that everything is there, filled out correctly, and the permit has been issued. Inspects the goods and releases them.

If any error is found, the goods are delayed and fined (the amount and period depend on the specifics of the error).

Therefore, for correct registration, it is better to contact a professional.

Disadvantages of telecommunication systems in taxation

It is difficult to name the disadvantages of modern telecommunication systems. Thanks to the clear interface of the programs and their wide capabilities, they were easily mastered even by those accountants who have always been adherents of classical systems. Therefore, the only drawback is the need to pay a subscription fee when information is transmitted not through the office of specialized companies, but directly via the Internet.

In theory, there remains the possibility of the server being hacked, but the programmers of TKS LLC and other similar organizations initially developed sufficient protection for it. During the period of practical use of telecommunication systems, such situations and threats did not arise.

Preliminary declaration

Examples of declaration of the HS code can be filled out ahead of time: some nuances that may become known only at the border, for example, can be entered later. To avoid confusion, points entered in advance are marked in a special way.

Preliminary declaration is often used: in this case, not all items in the documents are filled out, only those information on which the applicant has information in this case.

Schematic regulations for the provision of electronic declarations

Tax legislation offers specialized regulations that regulate the activities of telecommunications systems. Its main provisions are:

1. Payers transmit current data through selected telecom operators; this rule also applies to customs TCS.
2. If you have the appropriate programs and hardware, and a connection to communication systems, you can generate a declaration, a request to the tax authority, and also encrypt information while sending it to the recipient.

Electronic document management in this case has the following features:

• the necessary data is prepared;
• information is transmitted via TCS to a person authorized by the tax service, who encrypts it and subsequently sends it to the Federal Tax Service;
• Within 24 hours, the taxpayer receives a receipt confirming the receipt of electronic documents.

It is important to note that the date of submission of information is usually considered to be the date when the information was received by the telecommunications operator.

In general, the features of document flow in electronic form when transmitting statements and requests to the tax authorities are similar to working with declarations. The only difference is that in this case there is no confirmation of the deadlines for submitting documentation from telecommunications network operators.

Additional system features

Today, taxpayers are actively using the capabilities of the TCS system. This applies not only to legal entities, but also to individual entrepreneurs.

When submitting all reports electronically, there is no need to duplicate them in paper form.

In cases where there is a need to put specialized marks of tax authorities on the balance sheet and other papers, the taxpayer can contact the tax office. Marks are placed on paper copies of documents held by the Federal Tax Service.

Even if there is an unexpected failure in the telecommunications system, this will not delay the filing of documents by the taxpayer. The fact is that the date of transmission of information is considered the moment the information is transmitted to the telecom operator, regardless of when it reaches the Federal Tax Service.

In addition, through telecommunication systems, taxpayers can quickly request and receive a number of documents they need. Moreover, their numbers are constantly increasing. Now, while in your office, you can request from the tax office:

• certificates confirming payment of taxes and contributions;
• list of declarations and reports for the previous period;
• certificates on the status of tax payments at the moment;
• acts of reconciliation of calculations.

How to assign the correct foreign trade code to a product

For subjects of foreign economic activity, errors in determining the code of a product range can entail considerable expenditure of effort, time and money to correct it. If the customs declaration contains an incorrect product nomenclature number, the documents will have to be redone. Accordingly, customs clearance will be delayed, and the costs of temporary storage of goods will increase. Therefore, next we will look at how to correctly determine the product nomenclature number, using several examples of varying degrees of complexity.

Example 1. Import of sparkling wine Lambrusca

What should you pay attention to here? It is important to take into account the geographical location, as well as the fact that this is a sparkling wine. The percentage of alcohol content is also an important factor.

For example, you own all this information because you got it from the supplier. The product description looks like this: sparkling natural grape wine “Lambrusco Emilia” from Cantina Della, harvest 2014, white semi-dry, bottle capacity 0.75 liters, alcohol percentage 8%.

The code tree in this case looks like this:

1. Unit Level 22 - Alcoholic, Non-Alcoholic Drinks and Vinegar.
2. Product group level 2204 - Natural grape wines, including fortified ones; grape must, other than that specified in heading 2009.
3. Commodity item level 2204 10 - Sparkling wines.
4. Grade detail level 2204 10 940 - with Protected Geographical Indication (PGI).
5. Level of grade detail 2204 10 940 9 - other.

Thus, the product nomenclature number for this example is 2204 10 940 9. Gradually, level by level, we came to this number, detailing the information presented. Examples with wine are often the most complex, since it is important to take into account geography, types of wine, and percentage of alcohol.

Example 2. Import of antiques

Your company deals with antiques, and experts found a remarkable item at auctions in Germany. From the supplier you have the following information about the product: 4 nineteenth century chairs measuring 107 by 58 by 50, made of oak. The tree will look like this:

1. Section Level 97 - Artwork, Collectibles and Antiques.
2. Product group level 9706 - Antiques over 100 years old.

In this case, there is no level of varietal detail, and the remaining space of the ten-digit number is padded with zeros. Thus, for our antique products - 9706 00 000 0.

Example 3. Italian Arctic fox coat

Your friend is interested in Italian fashion, and then one day she noticed an arctic fox fur coat in a prestigious Italian salon. Now she wants such a thing for herself, but has no idea how to resolve customs formalities, because the fashion houses of Italy did not want to deal with such trifles. The following information about the product is available: a vest made of natural arctic fox fur for heights over 164 cm, size 44, Italian company CANTARELLI & CO SPA

The number definition for this product will look like this:

1. Section Level 43 - Real and Faux Fur; products from it.
2. Product group level 4303 - Items of clothing, clothing accessories and other products made of natural fur.
3. Heading level 4303 10 - articles of clothing and clothing accessories.
4. Grade detail level 4303 10 90 - other.
5. Level of varietal detail 4303 10 903 0 - items of clothing made from arctic fox or fox.

Now you know how to choose the right code. The main condition for its successful determination is the availability of complete information about the product. It is also very important to consider which country the foreign trade transaction is being carried out with. After all, different preferences or customs duties may be established for different countries and for different groups of goods.

Where can I get information about reporting through TCS?

Each taxpayer who has submitted a return through the TCS can obtain information about the submitted reports. To do this, you will have to contact the territorial Federal Tax Service or the telecom operator whose services you used.

Today, representatives of the tax service are encouraging legal entities and entrepreneurs who have not yet used this system to personally evaluate its capabilities. After all, it is convenient for both parties - electronic reporting significantly saves time on its transmission and verification.

Features of customs

Commodity Nomenclature of Foreign Economic Activity: examples of declaration for foreign economic activity depends on which country the transit will go to.

Statistical declaration is used in countries that participate in the Eurasian Economic Agreement. These are states such as Russia, Belarus, Kyrgyzstan, Moldova, Armenia, and Kazakhstan. An agreement was adopted between them on the cancellation of customs duties and less documentation is required for registration: all this is for products that are produced on the territory of the same states.

It should be noted that Belarus requires special hygiene certificates, which are as easy to issue as an SRO - it takes a little time.

Incomplete customs declaration of goods upon export is applied if the goods are transported to any country that is not a member of the EAEU.

That is, when exporting goods to Europe or China, you should first familiarize yourself with the peculiarities of their work - or provide the contractor with information about where the shipment will go.