What Is an Article 23 VAT Deferment License?

What Is an Article 23 VAT Deferment License?

The Article 23 VAT deferment license is a special authorization in the Netherlands that allows businesses to defer import VAT payments on goods brought into the country. Instead of paying import VAT upfront at customs, businesses can report and settle it in their periodic VAT returns. This deferral significantly improves cash flow for businesses importing goods into the Netherlands.

How It Works

1. Normal VAT Payment Without Article 23:

   • Importers must pay import VAT at the point of entry into the Netherlands, typically calculated as a percentage of the customs value of the goods.

   • They then reclaim this VAT later via their VAT return, creating a cash flow gap.

   
   

2. With Article 23 License:

   • Import VAT is not paid immediately at customs.

   • Instead, the import VAT is reported as both payable and deductible in the importer’s VAT return, effectively canceling out the payment.

Who Can Use the Article 23 License?

1. Eligibility:

   • Businesses registered for VAT in the Netherlands.

   • Non-EU businesses trading in the Netherlands can use the license through a general fiscal representative.

   
   

2. Common Users:

   • Importers bringing goods into the EU via the Netherlands for distribution or sale.

   • Companies using the Netherlands as a logistics hub for onward supply to other EU countries.

Benefits of the Article 23 License

1. Cash Flow Advantages:

   • Avoid upfront payment of potentially large amounts of import VAT.

   
   

2. Simplified Administration:

   • Import VAT is settled in the VAT return, streamlining bookkeeping and compliance.

   
   

3. EU Market Access:

   • Facilitates trade within the EU by allowing businesses to import goods via the Netherlands without immediate VAT burdens.

   
   

4. Attractive Logistics Hub:

   • Makes the Netherlands a preferred entry point for goods entering the EU.

How to Obtain an Article 23 License

1. Direct Application:

   • Businesses registered in the Netherlands can apply directly to the Dutch Tax and Customs Administration (Belastingdienst) with the support of FinTaxNL Solutions.Submit the application along with proof of VAT registration and business activities.

   
   

2. Via Fiscal Representation:

   • Non-EU businesses can obtain access to the Article 23 license through a fiscal representative authorized to apply on their behalf.

Compliance Requirements

1. Accurate Record-Keeping:

   • Maintain detailed records of imported goods and VAT transactions.

   
   

2. Correct VAT Reporting:

   • Ensure that import VAT is accurately reported in periodic VAT returns.

   
   

3. Ongoing VAT Compliance:

   • Regularly file VAT returns and meet all Dutch VAT obligations.

Why Is the Article 23 License Important?

For businesses importing goods into the Netherlands, the Article 23 VAT deferment license is a key financial and logistical tool. It minimizes the upfront financial burden of import VAT, making the Netherlands an attractive gateway for EU trade and improving the cash flow and efficiency of global supply chains.