There are a range of benefits for companies storing their goods in duty-free warehouses, not only in terms of taxation applicable to goods being transported, or the ease of completing custom’s procedures, but also thanks to the storage, handling, maintenance and security services offered by these warehouses.
Let’s start with the basics. What is duty-free warehousing? This is a warehouse where all types of goods can be deposited without being subject to import duties, internal taxes or other trade policy measures.
In short, just like in any other duty-free zone, it is as if the goods stored in a duty-free warehouse have not entered the EU in terms of customs regulations. They are therefore not subject to any duty either upon entry or when departing the warehouses.
Ease of completing customs procedures
Goods can be stored in a duty-free warehouse for an unlimited period of time (until the economic operator decides on where to send them), regardless of the amount, type, origin and destination of the same, or the legal restrictions of the area in question. However, they may be subject to any prohibitions or restrictions that may be established for health protection, security or public order purposes. Domestic cargo may also avail of tax benefits in certain intra-community operations.
The reason for not subjecting cargo to the same or the greater ease in terms of customs procedures is the location of the duty-free warehouses in a custom’s zone, which are themselves supervised by the customs authorities.
The company that owns the duty-free or “customs warehouse” is responsible for managing all administrative and port procedures for the goods. It can also perform the classification, handling, maintenance, loading, unloading and constant surveillance of the goods.
Bilogistik’s duty-free warehouse in Bilbao Port
While goods may be transformed and manufactured in a duty-free warehouse or zone subject to the corresponding authorisations, they cannot be used or consumed in the same. Cleaning, selection, freezing, degreasing, assembly and other tasks may be performed for example.
Another advantage of unlimited storage without duty charges is how the goods can be purchased under the best economic conditions and to be stored until their sale at the best time for the company. Trade transactions within a duty-free warehouse are also VAT-free.
For example, Bilogistik’s duty-free warehouse at Bilbao Port is able to store any type of goods. Its location simplifies the custom’s process and provides a great degree of independence during the entry and departure of any type of cargo. Import goods are not subject to any customs taxes, interior taxes or other trade regulations, just like in any other duty-free warehouse.
The history of duty-free warehouses
Duty-free warehouses and zones were first created in the 19th century in a range of European countries with the purpose of facilitating the international transport and trade of goods. They played an essential role in the economic development of the trade regions thanks to how they increased competitiveness of companies who needed to import goods. At the time that they were first created, both duty-free warehouses and zones operated as non-profit organisations managed by official institutions.
The first duty-free warehouse in Spain was created in 1914 in Cádiz, according to Joseba Lebrancón Niet in Duty-Free Warehouses in Spain, 1914-1930. While foreign goods could now enter duty-free, they could only be stored for up to four years. The second duty-free warehouse was created in Barcelona in 1917, followed a year later by the granting of the corresponding licenses to the warehouses in Bilbao and Santander.
The services currently offered by duty-free warehouses, as well as the methods used to manage them, are quite different to the past, keeping in line with the development of international trade and custom’s legislation. However, they continue to be a catalyst for competitive and foreign trade.
Duty-free warehouses and areas in Spain have a total surface of 1,281,488 metre-square, according to the Spanish Association of Licensees for Duty-Free Warehouses and Zones (AEZDF).