Bonded Warehouse Deals Lower Duties and Taxes: Repackaged Goods in Warehouses Can Increase Profits

Unlike privately owned sufferance warehouses, the Canadian government owns and manages bonded warehouses.

The major advantage of storing imported goods in a bonded warehouse is that customs duties and taxes are deferred until those items are removed from storage. Duties and taxes are payable at rates of tariff duty and tax in effect on the date that the imported goods leave the bonded warehouse.

In a bonded warehouse, non-government importers are eligible for a maximum of 4 years of storage. Government authorities can store goods in a bonded warehouse for up to 5 years. cek ongkir JNE trucking


Examination of Imported Goods in a Bonded Warehouse

Importers have the right to have imported goods examined in a bonded warehouse prior to paying duty and taxes. Inspectors can verify whether the correct items have been delivered or if there has been any spoilage or damage to the shipment.

If an inspector discovers that 10 cases of bananas out of a shipment of 100 cases are rotten, the importer can agree to accept only the 90 cases of bananas in good order. The bonded warehouse examination results in lower duties and taxes because the 10 spoiled cases are excluded.

Sample Imported Goods in a Bonded Warehouse

Importers can take items out of inventory stored in a bonded warehouse as samples to show to prospective customers. Customs officials must grant approval before samples can be shown. Importers can use bonded warehouses to show samples from an imported shipment of markers to potential buyers from Walmart or another retailers.

Repackage Imported Goods in a Bonded Warehouse

Importers can use a bonded warehouse to repackage goods from their original containers into smaller packages.

If an exporter from India sends a shipment of rice in 50-pound bags, those bags may be too heavy for resale in many local stores. Bonded warehouses can be used to repackage the rice into smaller 5 pound sacks or of another weight.

Duties and taxes are payable on the original weight of the rice shipment. Repackaged goods can lead to higher profits, depending on the prices set on the smaller bags of rice relative to the original 25 pound sacks.

Re-export Imported Goods from a Bonded Warehouse

Imported goods can be shipped from a bonded warehouse to customers in foreign lands. If half of an original shipment of televisions is re-exported from the bonded warehouse to outside Canada, that portion is not subject to customs duties and taxes.

Also, Canada Borders Services Agency (CBSA) has a rule that items stored in bonded warehouses are considered exported as soon as a purchase order is received from the foreign purchaser.

These “deemed exports” can lead to an immediate drawback on duties and taxes otherwise payable on the original shipment.

Transfer Bonded Warehouse Inventory to Ship Stores

Importers can transfer inventory from bonded warehouses to foreign ocean vessels going outside Canada; those vessels are known as ship stores.

Ship stores need inventory such as food, alcohol and tobacco. When loaded from a bonded warehouse, those supplies will be exempt from customs duties and taxes as long as the ship stores travel outside Canada.

Transfer Bonded Warehouse Inventory to Duty Free Shops

Bonded warehouses are sometimes located near duty free shops, particularly near airports.

Imported goods ranging from chocolates, watches, jewelry (spelled jewellery in Canada), pens to alcohol and tobacco are transferred from bonded warehouses to duty free shops.

As mentioned above, duty and taxes is assessed when imported goods are taken out of a bonded warehouse. No duty or taxes are due on items transferred to duty free shops.

Transfer Ownership of Goods in a Bonded Warehouse

Importers can sell shipments stored in a bonded warehouse to another party.

Once ownership is transferred to the other party, the new owner is responsible for paying any applicable customs duties and taxes. These amounts are due when the imported goods are removed from the bonded warehouse for sale in Canada.

Transfer Goods from One Bonded Warehouse to Another

No duties or taxes are payable on imported goods moved from one bonded warehouse to another.

Because the Canadian federal government owns and runs bonded warehouses, importers can move their goods from a bonded warehouse in one province to another Canadian jurisdiction duty free and without payment of taxes.

Imported goods moved to and from different bonded warehouses remain duty free and tax exempt for a maximum of four years from the date the shipment was first placed in a bonded warehouse.


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