Bonded or release on arrival, in numbers

Release for free circulation on arrival is the usual route for goods coming into the EU. Duty and import VAT are settled once, on the whole shipment, and from then on the stock moves like European goods. A customs warehouse pays off for higher-value goods that move in smaller volumes, where holding duty and import VAT until each release frees real money for months. For fast-moving goods, the saving is small against the discipline.

The concept, that a customs warehouse defers the charges and never cancels them, is explained in bonded warehouse: deferral, not exemption. This article puts numbers on the choice.

What changes between the two routes?

On the first route, the goods are released for free circulation when they land. Under Article 77 of the Union Customs Code, the customs debt arises when goods are placed under release for free circulation, at the moment customs accept the declaration. Import VAT falls due at the same point.

On the second route, the goods are placed under customs warehousing. Under Article 240 of the Union Customs Code, non-EU goods are stored in authorised premises under customs supervision. The European Commission puts the effect plainly: while they remain in storage, the goods “will not be subject to import duties or other charges”. When goods are removed and released for free circulation, “import duty and any other related taxes (e.g. VAT or excise) will become due immediately.”

Each release from a customs warehouse is declared and is its own tax point. Duty and import VAT are due on the goods released, at the time of that release, and on nothing else.

Case one: higher-value goods, slower sales

Suppose a maker of industrial measuring instruments lands one container in Portugal. All figures are hypothetical, for the mechanics only. The customs value is 360,000 euros. The stock sells evenly over twelve months. For the example, the duty rate is 4 percent. Portugal’s standard VAT rate on the mainland is 23 percent, and the import VAT base includes the duty.

Released on arrival, the whole container is taxed on day one: duty of 14,400 euros and import VAT of 86,112 euros, 100,512 euros in all. Kept in a customs warehouse and released once a month, each release of 30,000 euros of goods carries duty of 1,200 euros and import VAT of 7,176 euros, 8,376 euros in all.

Point in the year	Paid, release on arrival	Paid, monthly releases from the warehouse
Day one	100,512 euros	0 euros
End of month 1	100,512 euros	8,376 euros
End of month 3	100,512 euros	25,128 euros
End of month 6	100,512 euros	50,256 euros
End of month 9	100,512 euros	75,384 euros
End of month 12	100,512 euros	100,512 euros

By the end of the year, both routes have paid exactly the same. The difference is when. Halfway through the year, the warehouse route has paid 50,256 euros less, and that money stayed in the business while the goods waited under bond.

Now add a less comfortable variant. Suppose the market is slower than planned, and a third of the container is still unsold after twelve months. Released on arrival, the business has paid duty on all 360,000 euros of goods. From the warehouse, it has paid duty only on the 240,000 euros released, which is 9,600 euros, and nothing yet on the rest.

Released on arrival, 4,800 euros of that duty sits on goods still unsold. For a first European market, where the sales curve is a forecast rather than a record, that figure often matters more than the timing.

What if import VAT goes in the return?

The table assumes import VAT is paid to customs in cash on each release. In Portugal, a business that meets the conditions of article 27.º n.º 8 of the Código do IVA can instead account for import VAT in its periodic VAT return. Those conditions include the monthly return regime, a regularised tax position, and taxed activity with a right to deduct. Where that option applies, and the business can deduct in full, import VAT stops being a cash item on either route.

The comparison then narrows to duty alone: 14,400 euros on day one against 1,200 euros a month. By month six, that is 14,400 euros paid against 7,200 euros. Still a real difference for expensive goods, but a smaller one. The option itself is explained in import VAT in the return, not at the border.

Case two: fast-moving goods

Now suppose a maker of household goods lands a container worth 60,000 euros that sells out in six weeks, through hundreds of small orders. Same hypothetical duty rate of 4 percent.

Released on arrival, the container pays duty of 2,400 euros and import VAT of 14,352 euros, and the goods are free to ship. From a customs warehouse, the same goods would need release after release. Released weekly, that is six releases, each its own declaration and tax point. Released every working day, it would be about thirty.

What does the warehouse buy here? The entire duty bill is 2,400 euros. Because the goods sell evenly over six weeks, the average unit would wait about three weeks for its release. Deferring 2,400 euros of duty, and 14,352 euros of VAT where it is paid in cash, for about three weeks rarely justifies six declarations, warehouse records and a guarantee. Where import VAT goes in the return, there is nothing to gain on the VAT at all.

Fast-moving goods usually sit better in free circulation. The arithmetic makes the case before any other argument is needed.

What does bonded cost in discipline?

This is where the comparison is usually made too casually. A customs warehouse is a procedure with obligations, not a room with a lock. No prices appear here, because they depend on the goods and the flow. What follows is what the procedure itself demands.

• Every release is its own tax point. Each release is declared, either on its own declaration or, under customs simplifications, entered in the records and covered by a periodic supplementary declaration. Each carries its own duty and VAT calculation. More releases mean more declaration work.
• Authorisation and guarantee. The Commission lists the conditions for running a customs warehouse: establishment in the EU customs territory, assurance that the facility will be properly run, and a guarantee where a customs debt or other charges may be incurred.
• Records customs can audit. Under Article 214 of the Union Customs Code, the holder keeps records in a form approved by customs, showing the identification, customs status and movements of the goods. The stock count and the customs count have to agree.
• Responsibility for every unit. Under Article 242, the holder of the authorisation and the holder of the procedure are responsible for ensuring goods are not removed from customs supervision.
• Limited work on the goods. Under Article 220, goods in customs warehousing may undergo only the usual forms of handling: preserving them, improving their appearance or marketable quality, or preparing them for distribution or resale. Other work needs a different procedure.

On the other side of the ledger, the Commission notes that storage may be for an unlimited period, unless the nature of the goods creates a health or environmental risk.

When does each route fit?

A customs warehouse tends to fit when most of these are true:

• The goods are high in value per unit, so each month of deferral holds real money.
• They sell slowly or unevenly, so stock waits months rather than days.
• The duty rate is meaningful, or import VAT would otherwise be paid in cash.
• The market is new, and part of the stock may sell later than planned.
• Releases can be grouped, so declarations stay few.

Release on arrival tends to fit when the goods turn over in weeks, when duty is low, when import VAT goes in the return anyway, or when the goods need work beyond usual handling before sale. For most flows, release on arrival is the usual route.

This is general information, not legal or tax advice. The duty and VAT treatment of specific goods is confirmed with the client’s customs and tax advisers.

How this runs at EFC

Both routes are available at EFC’s base in Portugal, run with its logistics partner. Release for free circulation on arrival is the usual one. A customs warehouse is used for higher-value goods that move in smaller volumes, where each release is its own declaration and its own tax point. Which fits is decided with the client, on the goods, their value and volumes, and the view of the client’s tax adviser. EFC does not give legal or tax advice.

The procedure and the facility are described on the bonded warehouse page, and the default route on release for free circulation.

Sources

Label	Value	Source
Customs debt on import	incurred on release for free circulation, at acceptance of the declaration	Regulation (EU) No 952/2013, Article 77, EU text on legislation.gov.uk, opened 2026-07-14
Customs warehousing	non-EU goods stored in authorised premises under customs supervision	Regulation (EU) No 952/2013, Article 240, EU text on legislation.gov.uk, opened 2026-07-14
Charges while stored and on release	no import duties or other charges while stored; duty and VAT “will become due immediately” on release	European Commission, Customs warehousing, opened 2026-07-14
Authorisation conditions and storage period	EU establishment, proper operation, guarantee; unlimited storage period with exceptions	European Commission, Customs warehousing, opened 2026-07-14
VAT on leaving the arrangement	VAT chargeable when goods cease to be covered by the arrangement	Directive 2006/112/EC, Article 71, EU text on legislation.gov.uk, opened 2026-07-14
Import VAT base	includes duties due by reason of importation	Directive 2006/112/EC, Article 86, EU text on legislation.gov.uk, opened 2026-07-14
Supplementary declarations	may be of a general, periodic or recapitulative nature	Regulation (EU) No 952/2013, Article 167, EU text on legislation.gov.uk, opened 2026-07-14
Records	records in a form approved by customs, covering identification, status and movements	Regulation (EU) No 952/2013, Article 214, EU text on legislation.gov.uk, opened 2026-07-14
Holder’s responsibility	goods not removed from customs supervision	Regulation (EU) No 952/2013, Article 242, EU text on legislation.gov.uk, opened 2026-07-14
Usual forms of handling	preserve, improve appearance or marketable quality, prepare for distribution or resale	Regulation (EU) No 952/2013, Article 220, EU text on legislation.gov.uk, opened 2026-07-14
Portugal, standard rate	23 percent	Código do IVA, artigo 18.º, Portal das Finanças, opened 2026-07-14
Portugal, import VAT in the return	option under artigo 27.º n.º 8 and its conditions	Código do IVA, artigo 27.º, Portal das Finanças, opened 2026-07-14