diff --git a/CHANGES.md b/CHANGES.md
index 5fc64f3a46c..062bede560d 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -10,6 +10,7 @@ New Features:
 Fixed Issues:
 
 * [#12506](http://dev.ckeditor.com/ticket/12506): [Safari] Fixed: Can't paste into inline editor if page has `user-select: none` style. Thanks to [shaohua](https://github.com/shaohua)!
+* [#12683](http://dev.ckeditor.com/ticket/12683): Fixed: [Filter](http://docs.ckeditor.com/#!/guide/dev_acf) fails to remove custom tags. Thanks to [timselier](https://github.com/timselier)!
 * [#12489](http://dev.ckeditor.com/ticket/12423) and [#12491](http://dev.ckeditor.com/ticket/12423): Fixed: Various issues related to restoring selection after making operations on filler char. See the [fixed cases](http://dev.ckeditor.com/ticket/12491#comment:4).
 * [#12621](http://dev.ckeditor.com/ticket/12621): Fixed: Cannot remove inline styles (bold, italic, etc.) in empty lines.
 * [#12630](http://dev.ckeditor.com/ticket/12630): [Chrome] Fixed: Selection is placed outside paragraph when clicked the New Page button. This patch significantly simplified the way how the initial selection (a selection after contents of the editable is overwritten) is being fixed. That might have fixed many related scenarios on all browsers.
diff --git a/core/filter.js b/core/filter.js
index c23e862dbfd..bc4a221089b 100644
--- a/core/filter.js
+++ b/core/filter.js
@@ -327,7 +327,8 @@
 
 			var node, element, check,
 				toBeChecked = [],
-				enterTag = enterModeTags[ enterMode || ( this.editor ? this.editor.enterMode : CKEDITOR.ENTER_P ) ];
+				enterTag = enterModeTags[ enterMode || ( this.editor ? this.editor.enterMode : CKEDITOR.ENTER_P ) ],
+				parentDtd;
 
 			// Remove elements in reverse order - from leaves to root, to avoid conflicts.
 			while ( ( node = toBeRemoved.pop() ) ) {
@@ -345,6 +346,9 @@
 				if ( !element.parent )
 					continue;
 
+				// Handle custom elements as inline elements (#12683).
+				parentDtd = DTD[ element.parent.name ] || DTD.span;
+
 				switch ( check.check ) {
 					// Check if element itself is correct.
 					case 'it':
@@ -359,17 +363,13 @@
 					// Check if element is in correct context. If not - remove element.
 					case 'el-up':
 						// Check if e.g. li is a child of body after ul has been removed.
-						if ( element.parent.type != CKEDITOR.NODE_DOCUMENT_FRAGMENT &&
-							!DTD[ element.parent.name ][ element.name ]
-						)
+						if ( element.parent.type != CKEDITOR.NODE_DOCUMENT_FRAGMENT && !parentDtd[ element.name ] )
 							removeElement( element, enterTag, toBeChecked );
 						break;
 
 					// Check if element is in correct context. If not - remove parent.
 					case 'parent-down':
-						if ( element.parent.type != CKEDITOR.NODE_DOCUMENT_FRAGMENT &&
-							!DTD[ element.parent.name ][ element.name ]
-						)
+						if ( element.parent.type != CKEDITOR.NODE_DOCUMENT_FRAGMENT && !parentDtd[ element.name ] )
 							removeElement( element.parent, enterTag, toBeChecked );
 						break;
 				}
@@ -1813,7 +1813,7 @@
 
 		var parent = element.parent,
 			shouldAutoP = parent.type == CKEDITOR.NODE_DOCUMENT_FRAGMENT || parent.name == 'body',
-			i, child, p;
+			i, child, p, parentDtd;
 
 		for ( i = children.length; i > 0; ) {
 			child = children[ --i ];
@@ -1834,12 +1834,14 @@
 			// Child which doesn't need to be auto paragraphed.
 			else {
 				p = null;
+				parentDtd = DTD[ parent.name ] || DTD.span;
+
 				child.insertAfter( element );
 				// If inserted into invalid context, mark it and check
 				// after removing all elements.
 				if ( parent.type != CKEDITOR.NODE_DOCUMENT_FRAGMENT &&
 					child.type == CKEDITOR.NODE_ELEMENT &&
-					!DTD[ parent.name ][ child.name ]
+					!parentDtd[ child.name ]
 				)
 					toBeChecked.push( { check: 'el-up', el: child } );
 			}
diff --git a/tests/core/filter/filter.js b/tests/core/filter/filter.js
index 1ef71e77120..0e2a6df3d06 100644
--- a/tests/core/filter/filter.js
+++ b/tests/core/filter/filter.js
@@ -861,6 +861,15 @@
 				// Make sure we reset the enter mode even if test fails.
 				editors.themed.setActiveEnterMode( null );
 			}
+		},
+
+		'test filtering custom tags': function() {
+			var filter = createFilter( 'p bar' );
+
+			filter( '<p><bar>bar</bar></p>',						'<p><bar>bar</bar></p>' );
+			filter( '<bar><foo>bar</foo></bar>',					'<bar>bar</bar>' );
+			// #12683
+			filter( '<bar><h1>bar</h1></bar>',						'<p>bar</p>' );
 		}
 	};
 } )();
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