At 12pm CET on 31 December, the UK has left the EU Customs Union and Single Market. The trade between the EU and the Great Britain (GB) (the UK excluding the Northern Ireland (NI)) is accompanied with customs’ borders, formalities and paperwork including entry and exit declarations after 2020. The trade deal between the EU and UK (FTA) provides for zero tariffs and zero quotas on all goods provided the rules of origin (RoO) are met.
This means that goods moved from the Great Britain to EU need to be imported into the EU Customs Union / released in the EU. France, Belgium and the Netherlands will be the best ports to enter the EU after crossing the Channel. The seaports of Belgium are so close to the Netherlands that a crossing via Belgium to the Netherlands could also be an excellent option. Majority of the EU countries are within 1 day's reach from the Netherlands.
Import VAT will be due, even if customs duties are not payable.
In most of EU countries acting as an Importer of Record means that you will have to register for VAT, charge VAT on sales and submit VAT returns.
You do not need to register for VAT at all if you appoint a Limited Fiscal Representative (LFR).
+ Minimum compliance.
+ No VAT on import.
+ LFR takes care of everything for you.
- Because a LFR has unlimited liability, they are difficult to find.
- Due to unlimited liability the LFR may ask a high bank guarantee / bond and fees.
You register for VAT as a non-resident business without using a fiscal representative.
+ You have everything under your own control.
+ You can file VAT returns yourself or you can appoint an agent to do this for you.
+ No bank guarantees or bond.
- You have to pay VAT upfront on imports and can deduct import VAT on your regular return.
- In the case you do everything yourself, risk of penalties if you make mistakes in your VAT reporting.
You register for VAT by using a general fiscal representative (GFR).
+ 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 files VAT returns on your behalf.
- GFR will ask (limited) bank guarantee/bond.
- A fee is payable to GFR.
VAT treatment of your sales of imported goods
- To a Dutch customer: VAT is subject to the reverse charge in the Netherlands.
- To another business with a delivery to another EU country: Intra-EU Supply subject to 0% VAT.
- Your VAT position in case of appointing a fiscal representative: as a rule is nil
- Your VAT position without appointing a fiscal representative: as a rule, you are in a VAT refund position because VAT should be paid upfront on imports when the goods are released.
Grant Thornton’s international indirect tax team and digital advisory team can assist you in your VAT / customs matters, compliance and update of your systems and processes. Please contact us if you would like to discuss.