Duty exemptions – Customs warehouse

Companies that trade globally often open a warehouse in a European country from which they distribute goods. There are many EMEA (Europe, Middle-East, Africa) warehouses in countries like the Netherlands, Belgium, and Germany. The final destination of some of the goods that are brought to these warehouses will be an EU member state, but some will be re-exported from the EU. There are two reasons to store the goods in a bonded warehouse instead of in a regular warehouse:

  • There are import duties to be paid on the goods. If the goods were to be imported, import duties would have to be paid. Since duties are not refunded upon export, storing goods in a bonded warehouse obviates the need to pay import duties.
  • The payment of import duties needs to be postponed. If goods liable to import duties will be stored for a long time before they are used or resold, the payment of import duties can be postponed until the goods are actually needed.
  • warehoue

Modern warehouses have no lock on the door; they are completely controlled administratively. So a permit for a bonded warehouse will only be granted if the goods administration is very high-level. This involves extra operational costs. In general, a monthly import declaration will be made for all the goods that were taken out of the bonded warehouse and thus brought into free circulation in one particular month. Another customs formality is that the goods have to be brought with an NCTS or transit document from the EU’s external border to the warehouse. Similarly, goods that are sold to a customer outside the EU have to be shipped from the bonded warehouse to the EU’s external border with a transit document.