VAT on import
The following video shows you how VAT on import works in the member states of the EU:
The reverse charge mechanism discussed in the film is available for companies in the Netherlands Germany, for example, does not have this system.
In the Netherlands, importers holding a “permit to apply the transfer rule” can simply report their monthly VAT via a declaration of the total import VAT that is due. On the same form, they can deduct the same amount again. These permits are granted ‘on demand’.
Only a few countries besides the Netherlands have such a transfer rule. This gives the Netherlands a competitive advantage over other European countries.
To be able to make use of the transfer rule, a VAT-number of the importing company is required. The customs brokers must state that VAT-number on the import declaration. This makes it easy for tax authorities to verify the import transactions.
The extremely efficient system works very well. The advantages are:
* The actual monetary transactions are limited.
* The import declaration carries considerably less risk.
* There is no longer a VAT-liability.
Customs brokers can now focus on correctly defining the customs value, goods code, and origin preference.