The Benefits of a Customs Warehouse

What is a customs warehouse?
The Benefits of a Customs Warehouse (man in warehouse holding a big box)

Some companies have been importing goods from outside the European Union for a long time. For others, this is a new process since the United Kingdom is no longer part of the European Union.

Importing goods, for which you can’t prove the preferential origin, into the European Union means paying duties and VAT, or doesn’t it?

Postpone paying import duties and VAT

There are ways importers can postpone paying import duties and VAT. You have to pay import duties and VAT when importing goods into the European Union and to bring them into free circulation. If you want to postpone paying import duties or VAT, you can’t bring them into free circulation. This is possible if you store your goods in a customs warehouse. But what is a customs warehouse?

What is a customs warehouse?

A customs warehouse is a warehouse that is under customs control. Goods stored in a customs warehouse are not in free circulation. No duties or taxes have to be paid until that time when you ship the goods to their next destination.

If you sell the goods to a company in the European Union, you will have to bring the goods into free circulation and pay import duties and VAT. Still, if you sell your goods to a company outside of the European Union, by re-exporting them out of the EU, you don’t have to pay import duties and VAT.

What are the benefits of a customs warehouse?

Postponing the payment of import duties and VAT is good for your cash flow. You can only redeem VAT when the goods are sold. Here are some examples of when a customs warehouse works in your favour.

  • You have a large order of products, without proof of preferential origin, coming in from your supplier in the United Kingdom, a non-EU country, to your warehouse in Belgium. Suppose you don’t have a customs warehouse. You have to pay import duties and VAT on all products, whether you have sold them to companies or consumers in the EU or not. If you have a customs warehouse, you only have to pay duties and VAT when you sell the products within the EU. If you sell them to a company or consumer outside of the EU, you re-export the goods without paying duties or VAT.
  • You can store your goods under the customs warehouse regime indefinitely, or in other words, when they don’t move, no payments of duties / VAT need to be done.
  • You have two suppliers for the same product—one in China, outside of the EU and one in Poland, within the EU. If you keep your stock in a customs warehouse, you can ship to non-EU countries from your non-EU stock (from China) and ship to EU countries from your EU stock (from Poland). This way, you don’t have to pay unnecessary import or export duties. That’s what we call smart picking and smart declaring.

A customs warehouse involves administrative obligations. A customs agent like Customs Support can take care of this administration for you to focus on your customers.

We advise companies to use systems that enable smart picking and smart declaring to maximise cash flow and minimise the unnecessary payment of duties and VAT. By communicating the movements of goods (via EDI) to our dedicated customs software, we are able to manage your goods / flows “Customs wise” via our Customs Warehouse System.

How do I get a Customs Warehouse?

A Customs Support consultant can help determine if setting up a customs warehouse is the right solution for you. If so, they can help you with the application for the necessary license and setting up the warehouse.

When you have a customs warehouse, Customs Support can take care of the administration, so you can focus on delivering your promise to your customers. Take the load off your mind!