Fiscal Representation & Import VAT deferment
It is required to have a Fiscal Representation when you want to make use of the import VAT deferment in the Netherlands. With this deferment, you can avoid high import VAT financing costs. Mediatrix can be this Fiscal Representor for you.
VAT returns may take weeks or even months
When importing goods from outside the European Union into a European country, import VAT has to be paid literally at the border. Although the importing party can get this paid VAT reimbursed by the tax authorities of the EU country it concerns, this may take weeks or even months.
Let’s say a party imports goods worth € 5 million into the Netherlands and the applicable VAT rate is 21%. This means that there is an immediate cash outflow of € 1,050,000. The Dutch tax authorities reimburse the VAT three months later. At an interest rate of 5%, this results in more than € 13,000 additional financing costs for this particular batch of goods.
Article 23 license
The Netherlands has implemented a unique regulation that enables
businesses to avoid import VAT when importing goods into the EU. This
applies if the Netherlands is the end destination of the goods but also if
they are further distributed within Europe. To make use of this regulation,
the importing party has to appoint a so-called fiscal representative in the
Netherlands and apply for an ‘article 23’ license.