International warehousing – everything you need to know

What does the expression 'international warehousing' mean?

To begin with, let’s clarify the meaning of ‘international storage.’ This involves the storage of goods outside Poland or the home country of the company’s registered office.

It’s crucial to recognise that each country has its own regulations governing warehousing. Within the EU member states, storing goods necessitates VAT registration in the respective country. If you need assistance with this aspect, please have a look at our VAT Compliance services and schedule a consultation.

E-commerce fulfilment

E-commerce fulfilment stands out as a widely adopted storage service model. This term encompasses a comprehensive range of services that go beyond simple storage, covering all logistic aspects of a business—such as handling shipments, managing returns from customers, and addressing complaints.

It’s worth noting that Amazon itself provides warehousing services through the FBA model (Fulfilment by Amazon). Under this system, vendors (sellers) entrust their goods to the e-commerce goliath, and the company’s staff takes on the responsibility for subsequent processes related to the items’ sale.

For a more comprehensive understanding, feel free to delve into our article, providing an in-depth explanation of what e-commerce fulfilment is.

Are you in e-commerce and/or store goods abroad?

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Call-off Stock

The call-off stock is a solution designed to eliminate the need for VAT registration in the country where the vendor stores their goods. This approach relies on the concept that the vendor doesn’t directly sell their goods to the customer; instead, ownership is transferred to the warehouse owner, who then sells the stored products to the end customer.

Explore more about the call-off stock service, in the context of Amazon, in one of our articles.

Additionally, the term ‘call-off stock’ was introduced into the Polish VAT Act on July 1, 2020, replacing the previously discussed “consignment warehouse,” as detailed in our blog article explaining what a consignment warehouse is.

If you are an Amazon seller seeking assistance with settlement, registration, or filing VAT returns, feel free to schedule a consultation and discover for yourself how we can assist you.

Advantages of storing goods abroad

Warehousing goods abroad can be a very beneficial solution for many companies to boost existing turnover.

Reducing logistics and transport costs

The primary advantage is reduced logistics and transportation expenses. Storing goods internationally enables businesses to spend less on courier services by outsourcing them to local courier companies or minimising the distance to customers when handling deliveries in-house.

Streamlining logistic processes

Locating goods closer to customers not only reduces transportation expenses but also significantly shortens delivery times. This can positively impact the company’s reputation, as quick lead times are a key consideration for customers when making purchases.

Optimising inventory

Streamlining inventory levels is another benefit. Storing goods in a country with a substantial customer base allows for optimising stock management, facilitating prompt responses to changes in demand and helping avoid excess inventory and related costs.

Risks associated with international storage

It’s crucial to consider the flip side, as opting for the storage of goods abroad may not always be financially rewarding or may involve significant risks.

Additional costs

While the cost savings from storing goods abroad primarily come from reduced transportation expenses to the recipient, it’s essential to recognise that investing in fulfilment or renting warehouse space represents an additional cost that may not always bring a return on investment.

Risk associated with products

Storing goods internationally may limit our direct access to them, shifting the responsibility for the goods’ safety from us to the service provider. It is typically the service provider’s responsibility to prevent theft or damage to the products.

Tax regulations

Article 28e of the Law on VAT reads as follows: “The place of supply of services connected with immovable property, including the services supplied by experts and estate agents, the provision of accommodation in hotels or facilities with a similar function, such as holiday camps or sites developed for use as camping sites, the operation and use of immovable property and services for the preparation and coordination of construction work, such as, for example, the services of architects and on-site supervision, shall be the place where the immovable property is located.”

This implies that a Polish business owner opting to warehouse goods internationally needs to report and settle VAT in the country where the specific storage facility for the goods is located, rather than in Poland.

This, in turn, involves the requirement for VAT registration in the country in question, or VAT settlement in accordance with the VAT OSS procedure. If you require assistance with any of the above mentioned matters, please schedule a consultation.

National regulations

Another important issue is the country specific, e-commerce-related regulations. As an example, the need for registered packaging in Germany. Failure to comply with this obligation results in high financial penalties for entrepreneurs.

MM document

Warehouse management is another important aspect that cannot be overlooked. It involves, among other things, warehouse documentation, which is dependent on the company’s accounting policy.

While, when choosing fulfilment, the service provider and the customer integrate their systems to automate the flow of documents, in less advanced solutions this issue may require spending more time on its development.

The most popular and common document used in warehouse management is the so-called MM (material management) document, which is used to record stock turnover.

International warehousing of goods - summary

Storing goods internationally presents an opportunity to offer customers faster order processing and allows entrepreneurs greater flexibility in managing logistics. In the current market, there are companies specialising in comprehensive e-commerce logistics, covering everything from returns to handling complaints.

Nevertheless, it’s important to recognise that choosing fulfilment or leasing warehouse space adds an extra cost, and this may not be recoverable with a limited number of orders. Hence, conducting a thorough market analysis before committing to international warehousing is essential, and being prepared for potential obstacles in expansion is crucial.

If you are interested in expanding into new markets, you may be faced with the obligation to register for VAT or settle VAT in another country. If you require assistance in these matters, schedule a consultation and see how our VAT Compliance specialists can help your business.