Both bonded and non-bonded warehouses share significant similarities, which can be confusing on occasions. However, each has a different function with its own particularities. The differences of a bonded warehousing regime are explained below.
A bonded warehouse is a logistics warehouse where imported or exported goods between companies in different countries are stored for an unlimited period of time with tax benefits.
The following can be used as bonded warehouses:
- Actual bonded warehouses: Those dedicated to the temporary custody of goods, which must be administered by the customs authority.
- Non-bonded warehouses: Those with a tax-free area that allow for the import of certain goods from outside the EU.
Choosing one or the other has consequences for a company’s competitiveness. This is because the bonded option is exempt from VAT and other taxes if the company does not market the goods it has imported immediately.
Bonded warehouse
The Bonded warehouse is a logistics area where goods from non-European Union countries can be stored for an indefinite period of time, with payment of the corresponding taxes deferred until their departure.
These warehouses are under the control of the Tax Agency and need to be authorised by it.
They may be:
- Public: Used by any company that requests it, as part of its business.
- Private: Used exclusively by the company or the authorised holder.
Their main advantages are as follows:
- Unlimited stay, with no predetermined periods for the goods to remain in the logistics warehouses. The length of time is determined by the company according to its needs.
- Taxes are paid only when the goods leave the warehouse. They are not subject to taxes when entering and for as long as they remain, which provides a great competitive advantage for the company.
- Products from non-EU countries may be imported under duty suspension arrangements.
- All or part of the sales tax may be transferred to the purchasers.
- Partial arrivals and deliveries are possible. Not all the goods need to leave the warehouse.
They are recommended in the following cases:
- When companies import goods with a low/medium turnover; e.g., SMEs in any sector that are starting to grow and are committed to exports.
- Trading companies that need stock close to their customers in Spain so as not miss out on sales opportunities. This type of warehouse provides great advantages for intermediary companies.
Non-bonded warehouse
This is a tax warehouse that can benefit companies with a Spanish VAT number, whether or not they are Spanish or resident in Spain. Goods imported into the European Union can be stored without advance payment of VAT either on entry or exit.
The main advantages of non-bonded warehouses are the following:
- Goods do not have to pass through customs before being stored in the warehouse.
- Greater responsiveness and flexibility regarding customs procedures.
- All applicable customs duties are suspended.
- No trade policy measures apply.
- Goods can be partially received and grouped on the premises.
- Simplified logistical process for companies, by being authorised to export directly from EMA premises.
This type of warehouse is a tax-exempt area, so goods from countries or regions outside the European Union can be imported. This is the case with:
- Goods subject to excise duties from the Canary Islands (e.g. alcohol and tobacco).
- Goods covered by Article 65(c) of the VAT Act (subject to future markets: e.g. potatoes, olives, cereals, raw sugar and cocoa beans; or metals such as copper, tin, lead, silver, platinum, palladium, rhodium, nickel and indium).
They are most useful for the following types of companies:
- Importers who handle, classify or re-palletise goods. Until they leave the warehouse, companies are not obliged to pay VAT or other applicable taxes.
- Manufacturers that are not the exporting company. For example, when a manufacturing company delivers the goods to an exporting company through a non-bonded warehouse. The latter can purchase the goods without paying VAT. So a VAT self-assessment must be carried out, but the tax is not paid.
To summarise, these two types of warehouses differ mainly as follows:
- Territorial limitation: A bonded warehouse can handle goods from countries outside the EU, while a non-bonded warehouse is limited to companies with a Spanish VAT number.
- Exemption from paying taxes: In bonded warehouses, no taxes are paid until the goods leave the warehouse; while in non-bonded warehouses, not having to pay VAT at the time of purchase or sale benefits both buyer and seller.
The choice of one type or another depends on the company, its business and features. The most suitable one is chosen after considering the pros and cons in each particular case.
