Imports into the EU are subject to import VAT. However, member states have the discretion to allow import VAT deferments. It’s a benefit that Dutch authorities extend to traders, through a mechanism known as Article 23. It’s one of several factors that makes the Netherlands such an attractive import destination.
Acquiring an Article 23 license
By default, importers are required to pay applicable import VAT and duties when goods pass through customs. Dutch regulations provide traders with an opportunity to defer the VAT.
However, in order to defer your import VAT, you need an Article 23 licence. Note, however, that non-resident businesses cannot apply for the Article 23 license directly. They must appoint a fiscal representative.
The cash flow advantage of Article 23
Generally speaking, the import VAT paid at the border can be reclaimed. However, the delay between paying out the VAT and reclaiming it places a considerable cash flow squeeze on traders.
Import VAT deferment eliminates the liquidity problem. That’s because Article 23 enables importers to account for VAT on their VAT return, rather than pay the import VAT at the border. In practice, that means that Article 23 enables you to account for both your input and output VAT on your VAT return. That is, your ‘payment’ and ‘reclaim’ occur concurrently.
You need to register for VAT
Generally speaking, you must be VAT registered in the Netherlands to take advantage of import VAT deferment. (There is also the possibility of appointing a Limited Liability Fiscal Representative to manage the VAT on your behalf. However, this option is not suitable for companies involved in the onward trade of goods to other EU states.
Once registered for VAT, you will be required to file regular VAT returns and comply with the relevant VAT regulations.
Upgrade your trade
If you import into the EU, you shouldn’t miss out on opportunities to enhance cash flow and optimise your logistics and customs processes.
Vatglobal’s team of VAT experts will provide everything you need to optimise your imports. We provide a complete solution, including fiscal representation and effortless registration and compliance. We’ll ensure you are 100% VAT compliant and that you always secure the most advantageous VAT and customs terms.