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VAT & logistics import gateways into the EU

  • Feb 17, 2015 | Richard Asquith

VAT & logistics import gateways into the EU

Recent attention on goods importing, as has been seen in Belgium, will be of interest to those non-EU companies looking to forge channels into the EU. Belgium VAT's special ET 14000 scheme, where import VAT can be deferred onto VAT return filings, rather than by cash payment, no longer require companies to provide a pre-financing guarantee. The economic importance of trade through the Belgian ports such as Antwerp, Bruges-Zeebrugge and Ghent, for example, has been considered vital. Neighbouring Rotterdam is supported already by the Dutch Article 23 facility coupled with the fiscal representative-with-limited-licence scheme allowing non-residents to avoid both VAT registration and import VAT payment.

Clearly, import VAT burdens and logistics costs are strategically relevant to the marketers of non-EU businesses. These expenses, where goods are being shipped DDP (delivered duty paid) can make or break a deal, potentially critical to continued roll-out across Europe.

The facilities available in Belgium and the Netherlands are not fully replicated elsewhere but there are other EU jurisdictions where it is possible to arrange importation with VAT liabilities deferred on to the VAT return, provided certain arrangements are made; Czech Republic, Denmark and Spain are examples.

Onward supply relief and VAT

Another mechanism is onward supply relief, whereby if non-EU goods are imported into one EU state and then trans-shipped immediately to another, then no cash import VAT is payable anywhere, provided it is all B2B. Instead, the liabilities are accounted for on the VAT filings. Businesses supplying non-EU goods to Italy for example may decide to import shipped containers into France in say, Marseille, before bridging to Milan by road freight. In so doing, they avoid the VAT burdens but logistics costs will be higher. Care has always to be taken, as some states do not permit this type of relief unless guarantees are provided.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.