Netherlands reduces VAT bank guarantees for importers

Wed 15th Jan 2014

The Netherlands has changed the methodology for the calculation of Dutch import VAT deferment bank guarantees, including setting maximum and minimum amounts.

Dutch Article 23 VAT Deferment License

Importers into the EU via the Netherlands may avoid the payment of Dutch import VAT at 21% through a highly attractive VAT deferment scheme. Known as an Article 23 License, it requires a special registration with the Dutch VAT office, plus the appointment of a special VAT Fiscal Representative.  This is typically a tax lawyer or accountant ordinarily registered in the Netherlands.

Once registered, the importer should never have to actually make a cash payment of the import VAT.  They simply make a record in their books, and report this in their Dutch VAT returns.  Sales of goods to the rest of Europe will be VAT exempt as intra-community supplies, and sales to local Dutch VAT entities are nil VAT too under the VAT reverse charge rules.

Dutch VAT Bank Guarantee Requirements Eased

To take advantage of the scheme, and to protect the Dutch authorities from lost import VAT, the importer must provide the Dutch authorities with a bank guarantee.  Historically this was calculated as 5% of the annual turnover of the importations, although the Dutch tax authorities could use their judgement if they felt the risks were higher.  These could easily push the guarantees into the millions of Euro’s.

Following last year’s change in the Belgian import VAT deferment scheme, the Dutch authorities have now reduced the amount required.  There is now two maximum guarantee levels: firstly for non-consumer goods of €100,000; and secondly for consumer goods of €500,000.  They have also set a minimum guarantee level of €5,000.  Companies with existing guarantees should be able to apply for a reduction in their bank guarantees to the tax office.

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