Do you import goods from countries outside of the EU?
For years, the European Union (EU), China and the United States have been the three largest players in the field of international trade. Within the EU, the Netherlands is particularly suitable as a country for importing and distributing goods. This is in part due to the excellent geographical position and the access to prominent logistical facilities for importing goods. For example, the Netherlands has the ports of Rotterdam and Amsterdam as well as Schiphol airport. All kinds of facilities are offered in the area of customs and VAT. What are the key points of attention when goods enter the EU?
If you trade internationally, you need to be aware of the terms under which you do so. In the context of international trade, parties often agree to specific contractual terms and obligations by means of the ‘Incoterms’. Incoterms were developed by the International Chamber of Commerce and regulate and divide the tasks, costs and risks between buyer and seller, for example which party is responsible for the customs clearance of the goods in a certain country. This is important, as the clearance may lead to additional obligations for this party, in the areas of both customs and VAT.
Incoterms also play an important role in the upcoming Brexit. Have you made arrangements with your suppliers and customers with regard to future supply conditions?
Import duties and customs
Furthermore, taxes, such as import and excise duties, are relevant. Import duties are often perceived as a necessary evil, but with proper planning, a lot of costs can be cut at customs. If you don't comply with the complex customs formalities, this often leads to delays in your trade flows and to high costs.
We can help you to apply the customs procedures and treatments correctly, to simplify formal procedures and to obtain logistical advantages with the Customs Office. We can also advise you about the possible consequences of new customs legislation for your international trade.
VAT on the import of goods
Import VAT is also due upon importing goods. Entrepreneurs who frequently import goods to the Netherlands may utilize an import VAT deferment license to avoid a cashflow disadvantage. This facility, sometimes referred to as an Article 23 license, can be requested from the Dutch tax authorities. This license allows you to postpone the payment of import VAT. You report the import VAT as payable VAT in your VAT return and (if you meet the applicable requirements) you also report it as reclaimable VAT. On balance no VAT needs to be pre-financed.
We would be happy to assist you in requesting this license. If you are not resident in the Netherlands, you will need a VAT representative in addition to the license. This is another area in which we are pleased to assist your company.
Baker Tilly VAT Compliance (Netherlands) B.V. (a subsidiary of Baker Tilly) can act as your general VAT representative. As your VAT representative, we can amongst others assist your business in complying with VAT reporting obligations, and communicating with the tax authorities, as well as requesting an Article 23 license.