Brexit and Bonded Warehousing
What is Bonded Warehousing?
As the Brexit debate has highlighted, goods being imported into a country are frequently subject to taxes, often called ‘Tariffs’ or ‘Duty.’ In normal practice, these taxes are immediately payable by the importer even if the goods have not yet been sold.
In simple terms, Customs Duties are levied on goods that become taxable as they enter the border, while Excise Duties are levied on certain goods as they are produced on home soil.
So, how can your business avoid or delay such taxes?
A ‘Bonded Warehouse’ or ‘Bond’ is a warehouse in which goods that would normally be subject to import or excise tariffs may be stored, manipulated, or undergo further manufacturing, without payment of duty. These taxes only become due once the products are distributed or sold.
If managed by a private company (like the AirSea Packing Group), it is variously referred to as a ‘Custom Bond,’ a ‘Customs Bonded Warehouse,’ ‘Customs & Excise Bonded Warehousing’ or simply ‘Bonded Warehousing.’
How Can AirSea’s Bonded Warehousing Help Your Business?
Being able to defer import and excise duty payments gives businesses the time and flexibility to store, repackage, or plan the distribution of their goods without incurring a tax bill.
Using a customs & excise bonded warehouse reduces the risk your business is exposed to. It allows businesses to import goods in high quantities and avoid paying a large tax bill until enough sales have been generated to cover the costs of duty and VAT.
Bonded warehousing can be of particular benefit if imported goods are themselves to be re-exported to a third country, like the USA, as it avoids costly taxation whilst they are simply in transit. The tax is deferred, and once they are exported, the liability is canceled.
Perhaps the greatest benefit of customs & excise bonded warehousing is cash flow, as it avoids paying out taxation costs until sales revenue is received or assured.
If you know you can take advantage of storage without having to pay customs and excise duty straight away, your business may also be better placed to capitalize on fluctuations in exchange rates and other price-determining factors.
Contact us today to request a quote on utilizing our bonded warehouse for your European pieces.