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When goods are imported into the European Union, there is generally an immediate requirement for local VAT (and duty) to be paid on the goods by the business acting as the importer. For the importer, this usually requires VAT registration in the country of import.

Increasingly, there are facilities to simplify this process, such as in Denmark (see below). Inter-Distrans can organise the paperwork and applications for such schemes, and ensure any cash flow burden is kept to a minimum.

VAT AND DUTY ON IMPORTS

When a company imports goods into any EU country, VAT & DUTY becomes due. Either payable immediately at the port or airport, or when the goods are released from a bonded warehouse. To record and report this process, most EU countries will expect the importer of record to a VAT register in the relevant state. This can be done as a non-resident trader, and there is generally no requirement to form a local company.

Import VAT is then recorded as a recoverable deduction on the next VAT return filing of the importer. If the goods are sold in the country of import, it would apply local VAT on the sale, subject to local rules. Importation VAT can then be offset against the sales VAT. Alternatively, the importer may seek to sell these imports across Europe from its base, which requires VAT compliance in the target territories.

Non-EU importers registering for VAT have to appoint a local fiscal representative in most European countries. The fiscal representative is responsible for all of the importer's VAT compliance, including the filing of returns.

VAT DEFERMENT

A number of countries offer special importer schemes to allow for the postponement of this import VAT. Often, this means having a one month delay on the payment by opening a special account with the local tax authorities, e.g. in the UK and Italy. This special account will often require a bank guarantee.

DANISH IMPORTING VAT

One of the most convenient importer regimes can be found in Denmark. The import VAT is declared in the VAT return, but does not have to be paid, thus providing significant cash flow benefits. To take advantage of this facility, companies without a permanent establishment in Denmark must appoint a local fiscal representative. There are two types of representation:

1. Limited General representation through a customs broker. This model can bring clients' goods into the country for immediate despatch to other countries or customers. This option does not require the importer to VAT register in Denmark and the goods will be customs cleared against the final receiver of the goods.

2. General Fiscal Representation. This alternative provides the facility to hold goods in Denmark prior to re-sale. It requires the VAT importer to VAT register in Denmark for a special licence.

Typically, the Danish tax authorities will require a bank guarantee for the above.

HOW INTER-DISTRANS CAN HELP

With our VAT fiscal and agency representation network in Europe, Inter-Distrans regularly assists importers meet their VAT compliance requirements. This includes services to both EU and non-EU importers, covering: fiscal representation; VAT registrations & returns; Import licence applications; Intrastat and EC Sales filings; and Import VAT credit and recovery claims.

To learn more about how Inter-Distrans assist importers please contact our specialist, which can provide initial guidance for the whole of Europe:

Kind regards

TEAM Inter-Distrans

E-mail     info@Inter-Distrans.dk
Telefon   7430 2360