Paying Customs Duty Immediately, or ...?

... arranging for customs warehousing i.e. placing the imported goods in a customs warehouse. If the customer does not intend to make immediate use of the imported product (e.g. processing, reselling, etc.) then the payment of customs duties can be postponed through the use of customs warehousing.

At present (in conformity with EU regulations), there are 2 types of customs warehouses:

public warehouse: it is maintained by a carrier (forwarding agent), shipping agent or customs broker and, therefore, the use of the storage services is subject to a fee payable to the operator of the public warehouse
private warehouse: it can be established by the importer in his own storehouse, provided that the required licence is obtained from the competent local customs office. The basic condition for the issue of such licence is the provision of a customs security (e.g. bank guarantee) in an amount equal to 100 % of the customs debts belonging to the highest planned stock level. In the case of excise products, the excise tax is also part of the customs debts. Another important condition for the issue of the licence is the availability of a site operation permit and an environmental permit. The customs warehouses will never be allowed to contain any product in excess of the stock level for which the available customs security for the customs debts has been provided.

No customs duties whatsoever are payable when the dutiable goods are placed and kept in the customs warehouse. There is no expiry date for the customs warehousing, which means that the non-EU goods may be stored in the customs warehouse for as long as it is required (or until the expiry date of the contract concluded with the operator of the public warehouse). If the customer wants to make use of the imported product (i.e. processing or selling) then only the actually required volume needs to be cleared for free circulation. The customer has to pay the customs debts at the time of such clearance or, in possession of the required authorisation, within a month in average after such clearance.

In the optimum scenario it is even possible that, if the goods of a trader are stored in a customs warehouse, his buyer may pay for the goods earlier than the trader needs to settle the customs debts. In other words, the entire f customs debts may be financed by the buyers in certain cases. If the appropriate procedures and simplifications are authorised and used, the buyers will not notice anything from this arrangement. In fact, goods can be handled into and out from the customs warehouse 24 hours a day, without the process being slowed down by the presence of the customs authorities. Who says that it’s not better to use a certain % of the import value as a form of investment for one or two months than to pay it immediately as customs duties? Naturally, the same is true for the manufacturing importer. Based on the foregoing, it is possible to release working capital during keeping the import material on stock, and, consequently, to render the production process more profitable.

Please do not hesitate to contact us if you have any further question about customs warehousing or any other foreign trade transactions, or if you require similar arrangements for your trading operations.

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Import - export contact

Tamas NIETSCH

import-export consultant

For import-export consulting, contact Tamás Nietsch at the following contact details:

nietsch.tamas@nietsch.hu
@ftamas-nietsch-413a034