VAT is an important consideration for companies from within and outside of the EU. After all, when goods are imported into the Netherlands or another EU member state, customs duties must often be paid and (import) VAT must always be paid (in the Netherlands: 6% or 21%, depending on the goods concerned). The VAT can (usually) be reclaimed from the Dutch Tax Authorities, but customs duties cannot.
If the goods are resold after import, the procedure for foreign companies to reclaim VAT is in most cases as follows:
- The foreign company must register for VAT and have a Dutch VAT number in order to declare the sales for VAT.
- When the company has registered for VAT, it will receive a VAT return form each quarter, on which – among other things – the VAT paid on import can be reclaimed.
- The completed VAT return is immediately checked by the Dutch Tax Authorities. If it is approved, the Dutch Tax Authorities makes a decision on the basis of which the paid amount will be refunded to the foreign company within about four weeks. The total length of time between the import VAT being paid and being refunded is usually 3 to 6 months.
A foreign company does not have to go through this procedure for import VAT if it has appointed a fiscal representative. In this case, the VAT to be paid on import is offset in the VAT returns that are completed by the fiscal representative. An important advantage of this method is that the VAT on the imported goods does not have to be paid in advance, and the company does not have to finance the VAT (at 6% or 21%). An equally important advantage is that the fiscal representative can quickly and efficiently obtain a Dutch Tax Authorities ruling on any questions relating to the VAT. If mistakes are made concerning the VAT, they can usually be corrected by the fiscal representative without fines being imposed.