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Article 23: Reverse charge mechanism on import

VAT is levied within the EU and is designed by the VAT Directive. This means whenever goods are imported from non-EU countries, in addition to customs duties, VAT is also due. The VAT due on import and any customs duties must be paid to the Customs authorities when you submit the import declaration for the goods to be imported. The VAT paid on import can be claimed back at a later date as input VAT  (if you are entitled to deduct VAT) on the regular VAT return.

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What is an Article 23 permit?

With an article 23 permit, it’s possible to apply reverse charge for the VAT due on import to the VAT return. If you are entitled to deduct VAT, this VAT can immediately be deducted as input tax on the same return (reverse charge). This results in a better liquidity position for companies. For entrepreneurs who regularly import goods from non-EU countries, this is especially interesting. An Article 23 permit must be requested in writing.

Conditions of an Article 23 permit

A number of conditions must be met in order to apply for an Article 23 permit:

  • You live or are established in the Netherlands as an entrepreneur.
  • You regularly import goods from non-EU countries.
  • You keep a separate administration that easily shows how much VAT you have to pay on import.

A foreign entrepreneur cannot apply for an Article 23 permit himself. He or she can however appoint a fiscal representative to apply for the permit.

Processing in the VAT return

If an entrepreneur is in possession of an issued Article 23 permit, the VAT due on import can be declared in the regular VAT declaration under section 4a (purchases from countries outside the EU) and the VAT can be reported in section 5b (input tax). VAT due, as stated in section 4a, will be deducted in the same VAT return in section 5b.

This ensures that VAT no longer has to be paid in advance, which can only be reclaimed as input tax deduction at a later date via the regular VAT return. This way, companies can reserve liquidities by shifting the VAT payable on import to the VAT return.

Do you have any questions about the Article 23 permit, or would you like to apply for one? Please contact the VAT specialists at Crowe Peak. We are happy to assist you.

Crowe Peak
Olympisch Stadion 24-28 1076 DE Amsterdam, The Netherlands
+3188 2055 000 contact@crowe-peak.nl