Why should you trade via the Netherlands?

 If you do not need to release the goods in the Netherlands, you can make use of various customs suspension procedures to optimize your VAT and customs duty position.

Customs duties and VAT are due on import

If you are importing the goods into the EU, then you, as a general rule, need to register for VAT, charge VAT on sales and submit VAT returns. You also need to pay customs duties when the goods are released.

Customs duty is levied across the EU at the place where goods are cleared into ‘free circulation’ in the EU. Once duty (if applicable) and VAT have been paid by the importer, the goods are in free circulation and they can then be released for use in the EU market. Unlike import VAT, once customs duty has been paid it is, as a general rule, not recoverable by the importer.

Therefore we advise you to plan ahead and make decisions after you know what happens with the goods after they enter the EU. For example, if you plan to re-export (part of) the goods, then you have the possibility to place the goods under one of the special customs procedures. Until the goods are not cleared into free circulation, the customs duties are not due. For example, the goods could be placed under the T1 procedure and transported to another EU country or a non-EU country or sold when in temporary storage or a bonded warehouse. In this way, the payment of the customs duties and VAT can be avoided until the goods reach their final destination. 

Possibilities to optimise your VAT

If you only occasionally transport goods via the Netherlands, the Dutch VAT registration could be avoided. For example, the reverse charged VAT is due if your client is a business established in the Netherlands or if your EU client acts as an importer of record.

For supplies of non-released (non-EU) goods that are already on Dutch territory, the Netherlands allows the zero rate to be applied, subject to conditions. It can sometimes be the case that the supply of non-EU goods is accompanied by transport to another EU Member State and thus there is also an intra-Community supply. The Guidelines of the  Dutch Government approve that such supply of non-EU goods does not have to be reported as an intra-Community supply of goods in the VAT return or in the EC Sales List. It means that a Dutch VAT registration can be avoided in this case.

However, if you are regularly importing goods in the Netherlands, then you may consider applying for an Article 23 license which allows you to postpone payment of import VAT to the periodic VAT return, hence no cash flow occurs (referred to as an ‘import VAT deferment’ or ‘the reverse charge VAT on import’).

Import VAT deferral

Depending on the type of goods this import VAT deferment is either obligatory (if certain raw materials are imported) or the importer can make use of a special deferment license (‘an Article 23 license’).

Dutch legal entities and fixed establishments can apply for an Article 23 license to import goods from non-EU countries. With this license, importers avoid payment of VAT at the time of importation. The import VAT is shifted to the VAT return instead.

A taxable person not established in the Netherlands (a ‘non-resident’) will not be able to shift the import VAT to the VAT return unless he appoints a fiscal representative. Please see more details in ‘Take advantage of deferring import VAT in the Netherlands’.

Your options in short:

Option 1

You do not need to register for VAT at all if you appoint a Limited Fiscal Representative (LFR).

• Minimum compliance.
• No VAT on imports.
• LFR takes care of everything for you, but can only act on your behalf for some specific transactions. Because a LFR has unlimited liability, they are difficult to find.

Due to unlimited liability, the LFR may ask for a high bank guarantee/bond and fees.

Option 2

You register for VAT as a non-resident business without using a fiscal representative.

• You have everything under your control.
• You can file VAT returns yourself or you can appoint an agent to do this for you.
• No bank guarantees or bonds.

You have to pay VAT upfront on imports and can deduct import VAT on your regular return. In the case you do everything yourself, the risk of penalties exists if you make mistakes in your VAT reporting.

Option 3

You register for VAT as a non-resident business and appoint a General Fiscal Representative

• You do not pay any VAT on imports and also can make use of (customs) suspension regimes such as bonded warehousing.
• You are assured of expert assistance and a point of contact for the tax authorities.
• GFR can act for all your transactions
• GFR files VAT returns on your behalf.

GFR will ask (limited) bank guarantee/bond.

A fee is payable to the GFR.

Summary of the VAT treatment of B2B sales of imported goods

If you are a non-Dutch business:

• import VAT should be paid upfront on imports when the goods are released unless you appoint a fiscal representative.
• you can defer import VAT to your VAT return (no cash flow) by appointing a fiscal representative.
• If you only sell to Dutch customers or businesses registered for VAT in other EU countries, then:
  • To a Dutch customer: VAT is subject to the reverse charge in the Netherlands.
  • To another business with delivery to another EU country: Intra-EU Supply subject to 0% VAT and VAT registration required
  • The Dutch VAT becomes payable if you sell outside a bonded VAT warehouse in the Netherlands to non-Dutch businesses.  

For more information about VAT, please contact on of our specialists. They are here to help. 

Contact us