Excise warehouse

Storage of goods on which excise duty has not been paid in an excise warehouse

A business can store duty-paid alcoholic beverages and alcoholic beverages on which excise duty has not been paid. In general, businesses such as off-licences and restaurants will have duty-paid products in storage. But if a business wants to store or trade in products on which the excise duty has not yet been paid, it must have an excise warehouse. Strict administrative and organizational demands must be met by a physical place or building to receive a licence for an excise warehouse and security must be provided to customs in the form of a bank guarantee. Production may also take place within an excise warehouse, provided that a separate licence has been granted for this purpose.

Requirements for an excise warehouse

In practice, the demands imposed on an excise warehouse are often so high that only a few businesses in the goods chain are able to meet them. In addition, there are no exemptions for excise duties in trade, making only trade in large quantities economically justified. As a result, duty-free trade is not a market that can be easily accessed by new parties. This means that monitoring the trade in excisable goods will become easier for customs authorities. The large traders will be wary of committing fraudulent activities while their actions are also strictly monitored. In addition, the high level of security required to store or trade in excisable goods makes it even more difficult to enter the market. This is especially the case for the market in tobacco products and strong alcoholic beverages.

Highly taxed goods

In the case of goods subject to high excise duty, it is – of course – particularly profitable to commit fraud, as these types of products are easy to sell to private consumers. This type of fraud used to occur regularly with cigarettes and liquor but has now been curtailed, certainly in customs legislation. Companies that transport products on which no excise duty has been paid must take special security measures. For example, they may allow only authorized drivers to transport these types of goods in specially equipped lorries and only along designated routes. In addition, a 100% surety must be provided for these types of goods in EMCS. Only highly solvent businesses receive a moderation in this regard.

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Frank Thoolen