Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

July 16, 2020

European Commission publishes new rules for applying tariff quota in agricultural sector as of 1 January 2021

Executive summary

The European Commission published, on 12 June 2020, Commission Delegated Regulation (EU) 2020/760,1 regarding new rules for import tariff quotas subject to import licenses which will apply as of 1 January 2021. Under the new rules operators may, in principle, only apply for tariff quotas where they are not linked with other operators applying for the same tariff quota order number. This prevents the current practice whereby several linked operators separately apply for import tariff quotas. As a result, companies may, as of 1 January 2021, benefit from a full or partial suspension of import duties for only a limited quantity of products. This Alert summarizes the new rules and how these might impact existing trade practices of companies importing agricultural products.

Detailed discussion

Tariff quotas for agricultural products

A tariff quota constitutes, during the period of validity of the measure and for a limited quantity, the total (total suspension) or partial waiver (partial suspension) of the normal duties applicable to imported goods. Tariff quotas apply for different raw materials, semi-finished products and components belonging to the agricultural sector for which a deficit exists in the European Union (EU). Tariff quotas exist for example for horticultural products, poultry eggs, beef, pork and dairy products.

New requirements for operators applying for tariff quotas

Commission Delegated Act (EU) 2020/760 introduces new rules for the operators that apply for tariff quotas. As of 1 January 2021, operators may apply for tariff quotas for which prior registration of operators is required only where:2

  • They are not linked with other legal or natural persons applying for the same tariff quota order number.


  • They are linked with other legal or natural persons applying for the same tariff quota order number but regularly perform substantial economic activities.

These requirements also apply if the import license is transferred to a transferee (e.g., the person that requires the right).

The Commission Delegated Act (EU) 2020/760 defines that an operator is linked to another legal or natural persons where:3

  • It owns or controls another legal person; or
  • It has family links to another natural person; or
  • It has an important business relationship with another legal or natural person.

If the operator has presented an incorrect document or has submitted incorrect data to substantiate that the requirements are met, sanctions may be imposed. These sanctions include the possibility to exclude the operator from the license application system for the import tariff quota concerned for a tariff quota period following the tariff quota period during which such finding was made.

Impact of the new rules on companies importing agricultural products

In practice, linked operators (e.g., entities belonging to the same company) separately apply for tariff quotas with the purpose of benefitting from a full or partial suspension of import duties for a larger quantity of imported agricultural products. The new rules are intended to prevent that linked operators each apply for the same tariff quota order number. An exception to this rule applies to linked applicants that, if considered in isolation, each perform substantial economic activities. In this context, ”substantial economic activities” means actions or activities carried out by a person with the objective to ensure production, distribution or consumption of goods and services.4 In practice this means that an operator applying for a tariff quota should perform real economic activities and should not be established for the sole purpose of applying for a tariff quota.

Also, in practice it is quite common that companies establish entities with the sole purpose of applying for a tariff quota. As the before-mentioned definition of ”substantial economic activities” requirement shows, this will no longer be possible under the new rules. This means that only one operator out of a group of linked operators (e.g., one entity belonging to the same company), is allowed to apply for a tariff quota. As a consequence, after the Commission Delegated Act (EU) 2020/760 becomes applicable, a full or partial suspension of import duties is only available for a limited quantity of imported agricultural products.


1. Commission Delegated Regulation (EU) 2020/760 of 17 December 2019 supplementing Regulation (EU) No 1308/2013 of the European Parliament and of the Council as regards the rules for the administration of import and export tariff quotas subject to licences and supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council as regards the lodging of securities in the administration of tariff quotas, PB L 185 van 12.6.2020, p. 1–23.

2. Article 11(1) Commission Delegated Regulation (EU) 2020/760. Additionally, other (existing) requirements should be fulfilled, including the need for an operator to be established in the “license issuing authority” and the have VAT and EORI registration.

3. Artikel 11(2) Commission Delegated Regulation (EU) 2020/760.

4. Article 11(3)(e) Commission Delegated Regulation (EU) 2020/760.


For additional information with respect to this Alert, please contact the following:

EY Global Trade



The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more