Germany has changed the due date of import VAT, a move that will provide welcome cash flow relief to importers.
Previously, taxable persons had to pay import VAT within ten days of the import.
The Second Corona Tax Aid Act allows for the due date for VAT import payment to be moved to the 26th of the second month following the import.
The move will provide substantial liquidity relief. Ultimately, the new date means that import VAT will be due after the importer has received their VAT back through a VAT deduction.
The amended regulations apply from 1 December 2020.
Here’s what you need to do
Note that the deferment is not automatic.
In order to take advantage of the deferred import VAT payment date, businesses are required to obtain a deferment account from German tax authorities as soon as possible.
It is advisable to consult a VAT expert to ensure you have full clarity on all required documentation and relevant processes.
Ongoing opportunity to optimise cash flow
The new import VAT requirements are one element in a wide-ranging stimulus package drawn up by the German government to provide financial relief in the aftermath of the Covid pandemic.
However, concern about the liquidity effects of importing into Germany is a long-standing issue.
The amendment should not be seen just as a source of immediate relief. It should be seen as an opportunity for importers to optimise their cash flow on an ongoing basis.
If you would like to set up a German VAT deferment account, get in touch with Vatglobal to ensure you have everything you need to gain immediate tax relief and to optimise your cash flow in the future.