If you want to grow your business and expand to the EU market but are concerned about the VAT on import you have to pay when clearing your shipment through customs, then you may want to consider the possibility of tax representation and deferment of VAT through an Article 23 permit.
In this blog, Financial Consultant Willem Groot shares insightful details.
Understanding Import VAT in the Netherlands
Importing goods from outside the EU to the Netherlands through one of its seaports or airports is a taxable event that will result in VAT being charged. This VAT is normally due at the time of clearing the shipment through customs and is payable, together with any applicable import duties (Common Customs Tariff), before the goods are released.
You may have applied and registered for a Dutch VAT number in order to be able to reclaim this VAT, but the time involved in applying and waiting for any refunds to be processed and paid does not necessarily help your cash flow. You are also exposed to an exchange risk as the payment and re-claim of VAT are made in EUR, which you may have to buy and sell with your local currency (USD, for example).
Benefits of Tax Representation and Article 23 Permit
If you ship your products in large volumes, or a single product has a reasonably high value, then you will have to advance a relatively large amount of taxes that are usually not included in the price of your product.
“Article 23 permit” allows for the deferment of VAT that is due at the time of clearing customs to the moment of the periodic submission of the VAT return. It means that your products will only be charged the Common Customs Tariff when they are cleared through customs while the VAT charge is deferred.
As a foreign entrepreneur, you cannot apply for an Article 23 permit yourself. However, a tax representative can do that on your behalf, ensuring you will not be required to pay Customs the VAT on the import declaration.
EuroDev's VAT Services
EuroDev can help you register with the Dutch tax authorities and reclaim any VAT you pay (not just the VAT on import) through the submission of a quarterly or monthly VAT return, as well as submit the ICP declaration (mandatory) for sales within the EU member states.
More importantly, though, we can help you use a tax representative who can apply for an Article 23 permit.
More information
If you want to know more about the HR Outsourcing services we are able to offer regarding VAT registration, VAT submission and the use of a tax representative, then please contact Monique Ramondt-Sanders – VP of Human Resource Outsourcing.
