Access to the European market via fiscal representation in the Netherlands
With the Rotterdam harbor the Netherlands possesses the biggest harbor in Europe. With its strategic position the Netherlands functions as a central hub for the EU business of many multinational organizations.
Together with its favorable tax regime and cooperative tax authorities, the Netherlands is often considered as one of the most popular countries within the EU to start EU business for non EU residents.
ESJ offers foreign clients the possibility to get fiscal representation within the Netherlands. With its fiscal representation services ESJ can assist foreign clients with an optimal and efficient import of goods within the EU.
What is fiscal representation?
As foreign entrepreneur you can appoint a tax representative to handle your business with the Tax and Customs Administration. Although a foreign company can also choose for a direct registration (without fiscal representation) with the Dutch tax authorities, certain beneficial tax regimes can be applied in the Netherlands if a fiscal representative is appointed.
One of the major advantages of fiscal representation relates to timing of the import VAT due. Normally an importer of non EU goods should pay local VAT to the customs authorities at the moment of import within the EU. Although the import VAT can be recovered when the goods are used for VAT taxed purposes, the importer should pay the import VAT due in first instance and can only recover the VAT at a later stage. With a so called import deferment license, the import VAT due can however be deferred. Depending on the import volumes this can result in a major cash flow advantage. An import VAT deferment license is only available for foreign entrepreneurs who appointed a fiscal representative.
Furthermore, with a fiscal representative certain local supplies of goods (upon custom clearance of the goods) can be performed against a VAT rate of 0% (i.e. supplies within a VAT warehouse). This regime is typically favorable when goods (e.g. commodities) are traded frequently in a short time period in high volumes.
The advantages of VAT Business
- Avoid cash flow disadvantage on your VAT payment
- No unexpected costs
- Specialist advise
- Easier administration and compiance
- Gateway through Europe
The role of the fiscal representative
The following activities are performed by the fiscal representative on behalf of the foreign entrepreneur. Please note that (part of) these services can also be performed if your company opts for a direct registration.
- VAT registration with the Dutch tax authorities (including application for any additional VAT regimes, such as the import VAT deferment license);
- Preparation of periodic VAT returns and EU Sales Listings;
- Preparation of periodic Intrastat returns;
- Maintenance of records;
- Ongoing advisory services on business structure, reorganizations, supply chain etcetera.
As a fiscal representative is liable for any unpaid VAT, the Dutch tax authorities require a bank guarantee of the fiscal representative. VAT business therefore will ask clients to provide a (contra) guarantee. Obviously VAT business is happy to assist you with the negotiations related to the terms of the guarantee and arranging the guarantee with a bank.
If you are interested in taking your business to Europe, our advisers are happy to assist you in making the correct decisions. We can imagine that you first of all want to consider all pros and cons of doing business within the EU. With our experience and international network we can assist you with amongst others the following queries:
- Which country is most suitable for establishing my EU business?
- What are the relevant tax regimes in each EU country?
- How can I optimize my EU business from a tax perspective (e.g. CIT/VAT)?
- What implications does the import of goods within the EU have?
- Is it feasible/beneficial to use fiscal representation within the EU?
- How should I organize my administration?
- Which supply chain is most suitable from a VAT/customs perspective?
- Can I recover (foreign) input VAT?
VAT Business is an initiative of ESJ Financial Engineering, an independent medium-sized consultancy firm that operates in the Netherlands as well as having an international presence. We are an active player in providing tax, audit, consultancy and financial services.
VAT Business comprises a team of tax consultants specialised in VAT issues for Dutch and foreign businesses. Each day you will be faced with a range of VAT issues when running your business. They will often relate to international transactions and services. Yet even in a national context you and your business will need to deal with various VAT-related aspects. The specialists at VAT Business will provide an appropriate answer to all your VAT questions.
For further questions you are welcome to contact us.
The ESJ firm is member of the Allinial Global association.This global organisation of independent accountancy and business advisory firms is a network of firms that care about your business and work in partnership with you to achieve your goals.