PSC Cyprus: Establishing and Operating a Tax Warehouse
In order to establish and operate a tax warehouse in the Republic of Cyprus, one needs to obtain an authorisation to open and operate a tax warehouse along with the licence for authorised warehousekeeper by the Department of Customs and Excise of the Ministry of Finance.
According to the Council Directive 2008/118/EC, a tax warehouse is a place where goods subject to excise duty are produced, processed, held, received or dispatched under duty suspension arrangements by an authorised warehousekeeper in the course of his business, subject to certain conditions laid down by the competent authorities of the Member State where the tax warehouse is located.
Furthermore according to the above Directive an authorised warehousekeeper is a natural or legal person authorised by the competent authorities of a Member State, in the course of his business, to produce, process, hold, receive or dispatch excise goods under a duty suspension arrangement in a tax warehouse.
Tax Warehouses are classified into three categories:
- general Tax Warehouses: where it is possible to receive , hold and dispatch commodities owned by more than one authorised warehousekeepers;
- private Tax Warehouses: where products can be produced, processed, received, held and dispatched by the authorised warehousekeeper, owner of the tax warehouse;
- special tax warehouses: which are distinguished into:
- tax Free Shops;
- other premises to cover special activities that may be approved by the Director.
For the opening and operation of a tax warehouse in the Republic of Cyprus the authorisation of the Director of the Department of Customs and Excise must first be secured. It is noted that the interested person when applying for the first time is a pre-condition that he has to submit along with the application for tax warehouse an application for an authorised warehousekeeper (see related links).
For granting an authorisation to open and operate a tax warehouse the Director must be satisfied that the following criteria are met:
- existence of an economic need;
- the existence of security measures and the suitability of the premises in order to safeguard the public revenue;
- proper arrangement of the premises of the tax warehouse to facilitate physical control as well as the accounting control of the tax warehouse;
- satisfactory accounting system for the supervision of the activities of the warehouse;
- sufficient lighting, means of firefighting and suitable equipment according to the kind of products stored for the carrying on of the necessary controls;
- availability of suitable and safe office space, within the tax warehouse, and equipment to be used by the customs authorities during the required controls.
For granting an authorisation to open and operate a tax warehouse, an application form (Form E.D. 1) is submitted to the Director of the Department of Customs and Excise via the appropriate Customs Office responsible for the control of the tax warehouse. However the application can be submitted through the PSC Cyprus and it will be forwarded to the appropriate office.
The application form must be accompanied by the following documents (original or certified copies):
- identity card in case of natural person;
- company's registration certificate issued by the Registrar of Companies and Official Receiver;
- Certificate of the Registered Office issued by the Registrar of Companies and Official Receiver;
- Certificate of Directors and Secretary issued by the Registrar of Companies and Official Receiver;
and architectural plans of the premises to be used as tax warehouse, approved by the competent authority;
- architect's or civil engineer's declaration concerning the area of the premises;
- town planning permit and/or building permit by the competent authority for the particular usage of the premises;
- evidence verifying the legal possession of the premises such as registration certificate of immovable property or sale/lease contract;
- other relevant licences possessed by the applicant;
- any other supporting documents or information which is considered by the Director of the Customs and Excise Department; according to each case to be essential for the legal operation of the tax warehouse and generally for the examination and evaluation of the application.
Also the application must be accompanied by the following documents:
- copy of VAT Registration Certificate;
- copy of Customs Registration Certificate.
The above requirements and the proper completion of the application are being checked and evaluated by the appropriate Customs Office responsible for the control of the tax warehouse. A visit by an appropriate custom officer at the applicant's premises is essential to verify that:
- all details and information given by the applicant are correct. In case that any of the evidence is considered to be inadequate, the applicant may be asked to give additional information;
- all the above mentioned conditions are fulfilled.
Afterwards, the application with all the necessary documentation and recommendation /comments of the Senior Customs Officer is forwarded to the Director of Customs and Excise Department for final decision.
Notably, the Department of Customs & Excise for the purpose of simplifying the procedures and administrative cooperation required for the evaluation of the above application, may, through the IMI system, request and obtain information concerning the applicant from the competent authority of another Member State, in which the applicant has declared that is a registered member.
Data subjects are entitled to exercise their right of access to data relating to them in IMI, and the right to have inaccurate or incomplete data corrected and unlawfully processed data deleted in accordance with the national legislation on personal data protection.
The applicant is informed regarding the authorisation decision within, or the reasons why the application was rejected, within three months from the date that the application form and supporting documents were duly submitted or the date any requested outstanding or additional information is received by the customs authorities.
The authorisation shall not be deemed to have been granted if the Department of Customs and Excise has not replied within the period specified. Upon approval, the applicant needs to pay the following fees to the Department of Customs and Excise (either by cash, cheque, credit card):
- €854 authorisation fee for a general tax warehouse;
- €854 annual fee for the operation of a general tax warehouse;
- €1700 authorisation fee for a private tax warehouse;
- €1700 annual fee for the operation of a private tax warehouse.
The authorisation for the establishment and operating of a tax warehouse is valid for an unlimited period of time. The annual fee for operating a tax warehouse is payable within the first month of each year
Obligations and Supervision
Authorised natural or legal persons for the establishment and operation of tax warehouses are obliged to comply with the provisions of the Excise Duty Law 91(I)/2004 and specifically, among others, to:
- keep books and records regarding the production, processing, possession, receipt and dispatching of goods in a tax warehouse for at least seven consecutive years;
- ensure that the entry and exit of goods to and from the tax warehouse follows a fixed procedure predetermined by the Department of Customs and Excise;
- comply with the obligations of the authorised tax warehousekeeper’s licence (see Warehouse keeping of approved Tax warehouses in related links);
- inform in writing the Director of the Department of Customs and Excise for any changes that may affect any of the information taken into account for the issuance of the authorisation to open and operate a tax warehouse and not to proceed to any changes or amendments prior Director's approval.
The goods may be kept in the tax warehouse for an unlimited period of time given that no time limit is predetermined for their consumption unless otherwise explicitly determined by the Department of Customs and Excise or for the purposes of public interest.
Notably, at any time authorised officers of the Department of Customs and Excise may enter and visit any place subject to customs supervision, such as tax warehouses and any other facilities for inspection and control of the goods placed therein and for exercising controls of the records, books, documents or particulars, even in electronic form, of any natural or legal person.
Authorised officers, in order to verify or secure compliance with the customs or the other legislation, may demand any related information and exercise controls on all goods related to the entry or importation, exit or exportation, or movement or deposit thereof in places of business activities, as well as on any records, books, documents or particulars, even in electronic form, of any natural or legal person.
Cyprus General Bonded and Warehouse Logistics Association
P.O.Box 71067, 3840 Limassol
Telephone: +357 25344448,
Fax: +357 25344447,
© 2009 - 2020 Republic of Cyprus,
Ministry of Energy, Commerce and Industry, Point of Single Contact