NETHERLANDS: ARTICLE 23 VAT DEFERMENT LICENSE
Foreign companies importing goods into the Netherlands have the opportunity to pay no VAT to the Dutch Customs. This special scheme is possible only for importers holding an “article 23 permit”.
The authorization enables to avoid paying VAT at the moment when the goods imported are cleared for customs by a freight forwarder or a customs broker. The import VAT amount will be reverse-charged on a subsequent tax return, resulting in a nil payment of the tax.
Conditions underlying the authorization
Non Dutch Importers (both EU and non EU companies) are not entitled to apply directly for an “Article 23 permit”. They need to appoint a tax representative who will file this application on their behalf.
Even if the import VAT is not paid upon importation, the amount of tax should be reported on the VAT return of the foreign importer. It implies that the latter is registered for Dutch VAT and file tax statements on a monthly or quarterly basis.
Finally, in order to avoid abuses or tax dodging, importers wishing to take advantage of “Article 23 License” should set up a bank guarantee in favor of the Dutch Tax Office.
For a long time, the amount of the bank guarantee was a percentage of the annual turnover of the imports. This amount could easily reach millions of euros.
However, a recent VAT Decree dated on December 15th 2013 has significantly reduced the amount of the current bank guarantee to a maximum of €100,000 (for non-consumer goods) and €500,000 for consumer goods. The minimum amount of guarantee for the both cases is €5,000.
When all the legal conditions are met, an “Article 23 permit” is granted to the overseas importer for an open-ended period. A withdrawal of the authorization is nevertheless possible in case the beneficiary does not comply with the underlying tax rules.