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How does Fiscal Representation work?
The regulation in the European Union (EU) states that you will have to pay value-added tax (VAT) on imports from outside the EU. In the Netherlands, this means you would have to pay 21% or 9% VAT (depending on the type of goods) on the value of the imports. You could reclaim this VAT, however, this process will take a few months and requires VAT registration in the Netherlands.
Fortunately, in the Netherlands, we have the possibility to use VAT deferment with the article 23 license. The article 23 license allows us to transfer the VAT payment from the moment of import to the moment of VAT declaration to the Dutch tax authorities. In practice, this means we won’t have to pay the import VAT, since we’re allowed to deduct it in our VAT return at the same time.
This benefit is not only granted to Dutch companies. Companies established outside the Netherlands can also qualify for Dutch VAT deferment if they take on a Dutch company as their fiscal representative. Neele-Vat can act as a fiscal representative for your company and make sure you can take advantage of the article 23 license as well. Furthermore, Neele-Vat will take care of your VAT declarations and communications with the Dutch tax authorities.
Example with article 23 VAT:
Your goods are customs cleared on the 8th of July with a value of €10 000,00. The VAT declaration needs to be done by us on the 12th of October. With the VAT declaration, we can pay and reclaim this VAT at the same time, which results in a net VAT payment of €0,00 for the import of goods.
Example without article 23 VAT:
Your goods are customs cleared on the 8th of July with a value of €10 000,00 and you will have to pay €2 100,00 directly at the moment of import. In order to reclaim this amount, you would have to register for a VAT number. The quarterly VAT declaration needs to be done on the 12th of October. With this declaration, you can reclaim the VAT and it will take approximately 6 weeks. So, it would be around the end of November before you’ve received the money back. This means you won’t have access to your money for 5 months.
The use of article 23 can give you a great cash flow advantage and the opportunity to deliver quickly
Two types of Fiscal Representation
Two types of fiscal representation exist, limited fiscal representation (LFR) and general fiscal representation (GFR).
With LFR you can use Neele-Vat’s Dutch VAT number and article 23 license. We will submit a monthly VAT declaration in our name in which we include your shipments as well as those of our other LFR clients. LFR is limited in terms of possible transactions, to import shipments, and the first subsequent delivery. It is not possible to buy goods in the EU, use a bonded warehouse for your goods, sell goods B2C or with EXW or FCA incoterms when using LFR by Neele-Vat. Moreover, the transport of your goods after customs clearance to their final destination needs to be arranged by Neele-Vat itself.
With GFR we will arrange an individual Dutch VAT number and article 23 license for your company. We will periodically submit an individual VAT declaration in your company’s name. This will give you more insight into the submitted data. The set-up process will take approximately 6 to 8 weeks, however, GFR offers more possible transactions and in the meanwhile import shipments can be done with LFR. With GFR it is possible to buy goods in the EU, use a bonded warehouse for your goods, sell goods B2C and with EXW or FCA incoterms (although those incoterms are not recommended by us due to the higher risks). Also, you could use other service providers to customs clear and/or transport for you when using GFR by Neele-Vat.
If your company is established outside the EU and you’re not interested in importing goods from outside the EU into the Netherlands, but you are interested in buying goods within the EU and subsequently delivering them either in the EU or outside the EU, this can also be arranged at Neele-Vat. We can organize the set-up of your Dutch VAT number and take care of your VAT declarations, without requesting an article 23 license.
Please contact us to find out for which type of fiscal representation your company will qualify at Neele-Vat. We can provide you with our standardized Q&A list to easily get an answer to this question.
EORI number set-up
For the import of goods into the EU an EORI number is needed. An EORI number is a unique identification number assigned by the EU customs authorities. An EORI number is mandatory for all companies and every import and export. This number is used for customs declarations of all goods entering or exiting the EU.
When you need a Dutch EORI number we can assist you to request the number at the Customs administration of the Netherlands.
Get direct information from our customs and fiscal representation experts. Reach out to us at firstname.lastname@example.org or fill out the form on the right.
Do you have a question or comment for Neele-Vat Logistics, please leave your remarks on the form below. We will contact you if necessary.
Quote request Fiscal
We have two options regarding fiscal representation: General Fiscal Representation (GFR) and Limited Fiscal Representation ( LFR).
Selling your goods
There is a perfect solution for selling your goods to any European customer. Due to fiscal representation you can sell the goods without charging VAT.
There are some requirements while using fiscal representation. See this link for information about incoterms, sales invoices and transfer of goods.
Shipments done as a sample shipment, a give-away shipment or goods delivered for free for a Sales representative can be shipped without paying Dutch VAT for a maximum.
Delivery to Amazon, Groupon or other companies and warehouses with no transfer of ownership on the moment of the transfer of the goods are no problem fur us at all.
For the Tax Law this transaction is called a “distance sale”. When a company imports goods and customs clears them in the Netherlands and sells these goods to a private person.