Dutch companies that import goods to the EU should consider the advantages of the article 23 license, to avoid any VAT duties on imports (in short, a VAT deferment facility).
When importing goods to the Netherlands, a company must typically file an import declaration at the Dutch customs. Based on the value of the goods, the VAT must be paid immediately. Custom duties might also apply.
The VAT that is paid on imports can be declared at the very next VAT return and can be charged back. This means that companies need to pay the VAT in advance, which will affect their liquidity.
To improve their liquidity and avoid paying any VAT on imports, Dutch companies can apply for the so-called Article 23 License. This means that no VAT is due at customs in The Netherlands, instead, the VAT is declared in the next VAT return.
Foreign entrepreneurs cannot apply for an article 23 license themselves. They will need to engage with a tax representative. Bolder Launch can help you and your business to acquire this license in the Netherlands.
The Main Advantage
The main advantage of this Article 23 license is the freedom it provides. This license is, however, not easy to obtain without actual activities/clients in The Netherlands. With an Article 23 license, the import VAT is accounted for in the VAT return. This means that the amount of VAT due (once the goods are sold) and the amount of VAT that can be deducted (example: paid on import) are settled at the same moment.
Tax representative
As we have mentioned above, non-resident companies cannot apply for the license themselves. Therefore, they need the help of a tax representative. This tax representative must fulfill the following requirements:
- The tax representative must be established in the Netherlands;
- The tax representative must provide financial security for VAT;
When a foreign entrepreneur has appointed a tax representative, the entrepreneur usually is not obliged to register themselves, with the Dutch Tax Authorities as a taxpayer for VAT, when no other business is conducted in the Netherlands.
These tax representatives can take care of the following:
- Completing and filing the VAT return;
- Completing and filing the intra-community transaction declaration;
- Applying the reverse charge mechanism on import.
Bolder Launch can help you acquire this Article 23 license. We can also help you with your other tax-related issues and questions, please do not hesitate to contact us for more information.
