When you import goods from outside the EU, you incur import costs such as customs duties and VAT. Normally, a business can reclaim the paid VAT later through the VAT return. However, this means that the import VAT must be paid upfront, which negatively affects the liquidity position.To prevent this, Dutch legislation offers a solution: the Article 23 permit. With this permit, you do not have to pay import VAT upfront; instead, it is deferred to the regular VAT return. This allows you, as a business owner, to maintain more financial flexibility.
Suppose you import laptops from China worth €50,000. Without an Article 23 permit, you must immediately pay 21%VAT (€10,500) and any applicable customs duties (e.g., 5% = €2,500) to Customs. While you can reclaim the VAT later through your VAT return, the amount remains tied up until then.
With an Article 23 permit, you do not have to pay the VAT upfront. Instead, you report it in your regular VAT return, eliminating the need to pre-finance large sums. This prevents unnecessary financial strain and gives you more room to invest in your business.
Important Considerations
- No Annual VAT Return: Businesses with anArticle 23 permit cannot file an annual VAT return.
- Small Business Scheme (KOR): Entrepreneurs using the KOR scheme cannot apply for an Article 23 permit.
- Import Duties: Certain products always require import duties, even with an Article 23 permit. Check this in advance to avoid unexpected costs.
Foreign entrepreneurs can also apply for an Article 23 permit. However, a fiscal representative is required. DKB-Finance can assist with this process and ensure your application is submitted correctly.
If you want to apply for anArticle 23 permit, you will need the following information:
- VAT identification number
- Turnover tax number
- Businessname under which you import goods
- Type of goods you import
- Value and origin of the goods
- Frequency of your import activities
- Order confirmations, purchase invoices, and/or import documents as proof of regular imports
Would you like to benefit from the advantages of an Article 23 permit? DKB-Finance is happy to assist you with the application process. Contact one of our specialists and discover how we can support your business in international trade.
Get in touch for a free consultation!
