Customs warehouse: what it is, how it works, types and the difference with a VAT warehouse

TUESDAY, 3 NOVEMBER 2026

Duty and VAT deferred with no time limit until goods leave for sale, public or private warehouses, permitted handling, guarantee, the difference with a VAT warehouse and an example with a 200,000-euro container.

A customs warehouse in the EU is a customs-approved facility where non-EU goods are stored without paying import duty or import VAT until they are released for free circulation. If they are re-exported outside the Union instead, Italian duty and VAT are never due.

It is a tool few small businesses importing from China know well, but it is often useful: when a container arrives all at once and the goods sell over several months, or when part of the shipment is meant for customers outside the Union. This guide explains how it works, which types exist, how long goods can stay, what can be done to them in storage, how it differs from a VAT warehouse and what it is worth in a worked example.

Customs warehouse in the EU: what it is and what it is for

Under the Union Customs Code, Regulation 952/2013, customs warehousing is one of the special storage procedures. Article 240 defines it as follows: non-Union goods may be stored, under customs supervision, in premises or locations authorised by the customs authorities. While they stay there, the goods have not yet entered the European market: for tax purposes they are still foreign goods.

The main benefit is financial. The European Commission describes it as a way to defer the payment of duty and import VAT until the goods leave the procedure. For an importer, it means paying the taxes when the goods are actually needed, not when the ship docks.

How a customs warehouse works, from arrival to exit

On arrival at the port the goods enter temporary storage, which under Article 149 of the Code lasts no more than 90 days. Within that time they must be placed under a customs procedure or re-exported. Customs warehousing is one of the possible procedures, and from that point the path is this:

• Entry: the customs agent lodges the declaration placing the goods under the procedure and the goods are entered in the stock records on arrival.
• Storage: the goods stay in the warehouse without duty or VAT, with no general time limit.
• Exit to the market: on release for free circulation, duty, VAT and any excise are paid, in batches if needed.
• Exit outside the Union: on re-export, with proof that the goods have left, no customs debt arises.

There is also a fifth route: from the warehouse the goods can move to another special procedure, such as inward processing, if they need to be worked on before being resold.

Public and private warehouses: which types exist

Article 240 distinguishes two families. A public customs warehouse is available to anyone who wants to store goods: the typical case is a warehouse run by forwarders and logistics operators in ports and inland terminals. A private customs warehouse is reserved for the holder of the authorisation, who stores their own goods or goods for which they are the depositor.

The Irish customs authority, in its manual updated in March 2025, further splits public warehouses into type I, where responsibilities lie with both the holder of the authorisation and the holder of the procedure, and type II, where they lie only with the holder of the procedure. For a small business the practical choice is almost always the public warehouse of an operator already authorised: no authorisation of its own is needed, and costs are paid per space and per handling.

How long goods can stay and what can be done in the warehouse

Article 238 of the Code is clear: there is no limit to the length of time goods may remain under a storage procedure. Only in exceptional cases can customs set a deadline, in particular where long storage could pose risks to health or the environment. This is the sharpest difference from temporary storage and its 90 days.

In the warehouse the goods cannot be processed, but they can undergo the so-called usual forms of handling, provided for by Article 220 and listed in Annex 71-03 of Delegated Regulation 2015/2446. They serve to preserve the goods, improve their presentation or prepare them for sale: stocktaking, sampling, sorting and weighing; packing, unpacking and repacking; affixing or changing marks, labels and price tags; cleaning and minor repairs of transport damage; testing and adjusting machines and apparatus through simple operations. On request, goods can also be removed temporarily from the warehouse, but only with prior approval from customs.

Authorisation, guarantee and stock records

Anyone running a warehouse, or wanting a private one, needs a customs authorisation. Article 211 sets three main conditions: being established in the customs territory of the Union, providing the necessary assurance of the proper conduct of operations and lodging a financial guarantee where a customs debt or other charges may arise. The economic conditions, that is the check that the authorisation does not harm EU producers, apply to processing procedures and not to warehousing.

The holder must keep stock records that let customs follow every package: date of entry, quantity, commodity code, handling carried out, temporary removals and final exits. The Irish manual requires the records to give the complete history of the goods from entry to exit. This is why a public warehouse suits those who import small volumes: these tasks stay largely with the operator.

Customs warehouse and VAT warehouse: the difference

The two are often confused, partly because the names are similar. The Italian Revenue Agency, in ruling 440/E of 2008, distinguishes them as follows: a customs warehouse holds goods still in foreign status, on which duty has not been paid; the VAT warehouse, governed by Article 50-bis of Decree Law 331 of 1993, holds goods already in free circulation, on which only VAT is deferred until removal.

In practice: with a customs warehouse, duty and VAT are deferred together; with a VAT warehouse, duty is paid at import and only VAT is deferred. The same ruling notes that a customs warehouse can also work as a VAT warehouse without another authorisation, provided the operator notifies the competent customs office. The VAT rules on imports are covered in our guide to import VAT on non-EU goods.

Practical example with figures

A hypothetical company imports from China a container of homeware with a customs value of 200,000 euros. Assume a duty rate of 4% and VAT at 22%. A quarter of the goods is already sold to a Swiss customer, the rest will be sold in Italy over three months. The figures are hypothetical:

• Without a warehouse: on arrival the company pays 8,000 euros of duty and 45,760 euros of VAT, that is 22% of 208,000 euros, for a total of 53,760 euros.
• With a warehouse: the goods for Italy leave in three batches of 50,000 euros, and each batch pays 2,000 euros of duty and 11,440 euros of VAT, that is 13,440 euros a month.
• Share for Switzerland: the 50,000 euros re-exported pay neither duty nor Italian VAT, so 2,000 euros of duty never arise.
• Warehouse costs: if shown separately, storage and handling costs are not included in the duty base, as Article 86 of the Code provides.

Import VAT is generally deductible, so the gain there is cash flow: 40,320 euros spread over three months instead of 53,760 euros paid in one day. The duty on the re-exported share, by contrast, is a real saving. Against these benefits come the costs of the warehouse and of the extra customs declaration, which vary from operator to operator and should be requested in writing.

When it is worth it and when it is not

A customs warehouse is worth considering when goods stay idle for a long time before sale, when part of them is destined for customers outside the Union, when the final buyer is not yet known or when the duty is high compared with storage costs. It also helps when goods need relabelling or repacking before sale: the usual forms of handling are carried out before anything has been paid.

It makes less sense for small shipments that sell straight away, because the two customs declarations and storage in an authorised warehouse cost more than the financial benefit. One last point: duty is calculated under the rules in force when the customs debt arises, that is on exit from the warehouse for release for free circulation. If the rate changes in the meantime, for example because of a new anti-dumping duty, in principle the rate in force at exit applies, not the one on the day of arrival.

With La Merce, a company that receives a container from China and resells part of it outside the Union decides before loading whether to place it in a public customs warehouse: the duty on the re-exported share never arises, and duty and VAT on the rest are paid batch by batch, when the goods actually leave to be sold in Italy.

Let's talk about your productprojectconceptgoalbrandproductprojectconceptgoalbrandproductprojectconceptgoalbrandproduct