What is Fiscal Representation in the Netherlands?

What is Fiscal Representation in the Netherlands?

Fiscal representation in the Netherlands is a service that allows non-EU companies to comply with Dutch VAT obligations when trading in or through the Netherlands. A fiscal representative acts as the local VAT agent for the non-EU company, handling VAT registration, reporting, and payments. This is especially useful for companies importing goods into the Netherlands or conducting business in the EU via the Netherlands.

Types of Fiscal Representation

1. General Fiscal Representation:

   • For businesses importing goods into the Netherlands for onward sale within or outside the EU.

   • Allows the use of the Article 23 VAT deferment license, which defers the payment of import VAT to the VAT return rather than paying it upfront at customs.

   
   

2. Limited Fiscal Representation:

   • For businesses that do not own goods but act as intermediaries or facilitate supply chains (e.g., freight forwarders).

   • Limited to specific transactions such as the temporary storage or transit of goods.

Responsibilities of a Fiscal Representative

The fiscal representative takes on the following duties on behalf of the non-EU company:

1. VAT Registration:

   • Registers the non-EU company for VAT in the Netherlands.

   
   

2. VAT Compliance:

   • Prepares and files VAT returns and Intrastat declarations.

   
   

3. Handling Import VAT:

   • Uses the Article 23 license to defer VAT on imports, simplifying cash flow management.

   
   

4. Communication with Tax Authorities:

   • Acts as the point of contact with the Dutch Belastingdienst.

   
   

5. Record-Keeping:

   • Maintains accurate records of all VAT-related transactions as required by Dutch law.

Benefits of Fiscal Representation

1. Simplified VAT Compliance:

   • Non-EU businesses can trade in the Netherlands without needing a physical presence or local expertise.

   
   

2. Import VAT Deferral:

   • The Article 23 license allows businesses to avoid paying import VAT upfront, improving cash flow.

   
   

3. Access to the EU Market:

   • The Netherlands is a strategic hub for EU trade. Fiscal representation facilitates seamless transactions across EU borders.

   
   

4. Regulatory Support:

   • Fiscal representatives ensure compliance with Dutch and EU VAT rules, reducing the risk of errors or penalties.

Costs and Application Process

1. Costs:

   • Fees for fiscal representation vary by provider and can include:

     • Annual or monthly service fees.

     • Fees for VAT filings and declarations.

     • Costs associated with applying for the Article 23 license.

   • Additional charges may apply for handling specific transactions or audits.

   
   

2. Application Process:

   • Choose a Fiscal Representative:

     • Select a licensed representative experienced in Dutch VAT regulations.

   • Submit Documentation:

     • Provide necessary business details, including trade licenses, transaction details, and VAT-related information.

   • Sign an Agreement:

     • Define the scope of representation and responsibilities between the business and the fiscal representative.

   • Obtain an Article 23 License (if applicable):

     • The fiscal representative typically handles the application process for this license.

Who Needs a Fiscal Representative?

• Non-EU companies importing goods into the Netherlands for sale or distribution.

• Businesses using the Netherlands as a logistics hub for EU trade.

• Non-EU companies with no physical presence in the Netherlands but involved in taxable transactions.

By engaging a fiscal representative, non-EU companies can efficiently manage VAT obligations in the Netherlands while leveraging its strategic position as a gateway to the European market.