Tax Warehouse Operation

For the opening and operation of a tax warehouse in the Republic of Cyprus the authorization 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 authorized warehouse keeper (see Related Links).

For granting an authorization 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 authorization 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.

1. 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;
   • landscape 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.

Upon approval, the applicant needs to pay the following fees to the Department of Customs and Excise (either by cash, cheque, credit card):

• €854 authorization fee for a general tax warehouse;
• €854 annual fee for the operation of a general tax warehouse;
• €1700 authorization fee for a private tax warehouse;
• €1700 annual fee for the operation of a private tax warehouse.

The annual fee for operating a tax warehouse is payable within the first month of each year.

Administrative Action Against a Competent Authority’s Decision

Any person may file an Administrative Action at the Administrative court against a decision, act or omission of any competent authority or body.

Pursuant to Article 146 of the Constitution, an Administrative Action may be lodged within 75 days from the date of the decision or act or omission or from the day when such decision or act or omission was notified to the applicant.

The Administrative Court acts as a cassation Court and not as a substantive Court. In other words, the Administrative Court may:
I. Dismiss the Administrative Action
II. Annul wholly or partially the contested decision or act
III. Compel the relevant authority or body to take a certain action

After a decision is annulled, the authority and/or public body must reverse things back to the state prior to when the concerned decision and/or act was executed and reexamine.

Appeal Information

An Appeal may be filed against the Administrative Court’s first-instance decision within a period of 42 days from the date such decision was given.

At the Supreme Court (Court of Appeal Section) hearing, the contested issue of the appeal remains the legality of the decision or act already adjudicated for. However, such revision of the legality of the decision or act is solely examined on the matters and the extent that the two parties have limited the reasons in the relevant notice of appeal.

The decision adopted by the Supreme Court is considered final in relation to the matter that has been judged.

• Council Directive 2008/118/EC
• The Excise Duties Law of 2004 (91 (I) / 2004)
• Declaration 311/2010 (in the “Applications & Documents”)

Authorized natural or legal persons for the establishment and operation of tax warehouses are obliged to comply with the provisions of the Excise Duties 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 authorized tax warehouse keeper’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 authorization 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 authorized 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.

Authorized 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.