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As a company planning to import goods into the Netherlands, understanding the nuances of VAT and import duties is essential. One such nuance is the art. 23 license, a unique permit that allows businesses to streamline their VAT payments on imports. House of Companies in the Netherlands e will walk you through the process of obtaining an art. 23 license in the Netherlands, and how to apply for a VAT number in the Netherlands.

What is an art. 23 license?

The art. 23 license is a unique permit issued by the Dutch tax authorities, allowing businesses to reverse-charge VAT on imports. This means that instead of paying the VAT upfront at the customs border, businesses can defer the VAT payment to their periodic VAT return. This can significantly improve cash flow and operational efficiency for businesses regularly importing goods into the Netherlands.

Who can apply for an art. 23 license?

Both domestic and foreign businesses can apply for an art. 23 license. However, foreign businesses need to engage a fiscal representative to apply on their behalf.

Domestic Businesses

Domestic businesses with regular imports from non-EU countries can apply directly for the art. 23 license. The business must have a fixed establishment in the Netherlands.

Foreign Businesses

Foreign businesses, both from EU and non-EU countries, cannot apply directly for the art. 23 license. Instead, they must engage a fiscal representative, who will handle the VAT return and ensure the correct application of the reverse-charge mechanism.

Why Apply for an art. 23 License?

There are several advantages of applying for an art. 23 license:

Improved Cash Flow

By deferring the VAT payment, businesses can avoid significant upfront costs at the point of import. This can greatly improve cash flow, especially for businesses with high volumes of imports.

Streamlined Operations

The art. 23 license also streamlines the import process, as there is no need to wait for the VAT payment at the border. This can save time and make the overall operation more efficient.

Simplified VAT Reporting

With an art. 23 license, the VAT on imports is reported and reclaimed in one single procedure, simplifying the VAT reporting process.

How to Apply for an art. 23 License?

Applying for an art. 23 license involves a few steps:

Engage a Fiscal Representative (For Foreign Businesses)

If you are a foreign business, you must first engage a fiscal representative. The representative will be responsible for applying for the art. 23 license on your behalf and handling your VAT returns.

Apply through the Dutch Tax Authorities

Whether you are a domestic business or a foreign business using a fiscal representative, the application for the art. 23 license must be submitted to the Dutch tax authorities. The application must include:

• Information about your business, including your business name, address, and VAT number
• Your reasons for applying for the art. 23 license
• Proof that you regularly import goods from non-EU countries

Wait for Approval

After submitting your application, you must wait for approval from the Dutch tax authorities. This can take several weeks. Once approved, you will receive your art. 23 license.

What are the Responsibilities of a Fiscal Representative?

A fiscal representative is responsible for handling your VAT returns and ensuring the correct application of the reverse-charge mechanism. This includes:

• Filing periodic VAT returns on your behalf
• Declaring the VAT on imports in the VAT return
• Deducting the VAT as input tax in the same VAT return

The fiscal representative acts as your representative in all dealings with the Dutch tax authorities. They must be knowledgeable about Dutch VAT law and be able to navigate the Dutch tax system on your behalf.

How to Apply for a VAT Number in the Netherlands?

In addition to applying for an art. 23 license, you may also need to apply for a VAT number in the Netherlands. This can be done through the Dutch Chamber of Commerce (Kamer van Koophandel), which provides a self-governance portal for businesses. The process involves:

• Registering your business with the Dutch Chamber of Commerce
• Providing information about your business, such as your business name, address, and legal form
• Paying a one-time registration fee

Once you have registered your business, you will receive a unique VAT number. This number must be used in all your dealings with the Dutch tax authorities, including your VAT returns.

Getting Help with Your art. 23 License and VAT Registration

Applying for an art. 23 license and a VAT number in the Netherlands can be a complex process, especially for foreign businesses unfamiliar with Dutch VAT law. Fortunately, there are services available to help you navigate this process.

The Dutch House of Companies offers a self-governance portal that allows you to register as an art. 23 importer in the Netherlands, without setting up a local entity, at a fixed yearly fee. This can significantly simplify the process and make it easier for you to start importing goods into the Netherlands.

Conclusion

Whether you’re a domestic or foreign business, understanding the nuances of VAT and import duties in the Netherlands is crucial for operating efficiently and legally. The art. 23 license is a valuable tool that can improve cash flow, streamline operations, and simplify VAT reporting. With the help of a fiscal representative and services like the Dutch House of Companies, obtaining an art. 23 license and a VAT number in the Netherlands can be a straightforward process.