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.
Importing goods from outside the EU through one of the sea or airports of The Netherlands 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.
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 is usually not included in the price of your product. 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 cashflow. Not to mention the fact that you are also exposed to an exchange risk as the payment and re-claim of VAT is made in EUR which you may have to buy and sell with your local currency (USD for example).
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 a so called “Article 23 permit”. This 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.
If you want to know more about the services we are able to offer with regard to VAT registration, VAT submission and the use of a Tax representative then please contact Monique Ramondt-Sanders - VP of Human Resource Outsourcing. More information on our services can be found on our website.
EuroDev, established in 1996 with offices in The Netherlands and France, has a single, defined purpose to help mid-sized North American companies expand their business in Europe. We have created a proven, successful business development model and since our founding, have partnered with over 300 companies to help them define and meet their European business goals. Services provided include Sales Outsourcing, HR Outsourcing and Digital Marketing.