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 European Union, 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 European Union or not. If you have a customs warehouse, you only have to pay duties and VAT when you sell the products within the European Union. If you sell them to a company or consumer outside of the European Union, 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 European Union and one in Poland, within the European Union. 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 European Union countries from your European Union 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.