Article 23 of the Dutch Value Added Tax (VAT) system is a special VAT arrangement that allows businesses to import goods into the Netherlands without having to pay VAT at the border. Instead, the VAT is paid at a later time, when the goods are sold to customers.
This arrangement is particularly useful for businesses that import goods from non-EU countries on a regular basis. Under the normal VAT system, businesses would need to pay VAT at the border, which can create cash flow problems. However, with Article 23, businesses can defer the payment of VAT until the goods are sold, which can help to ease cash flow issues.
In order to use Article 23, businesses must be registered for VAT in the Netherlands and meet certain criteria. For example, they must have a good compliance history with Dutch tax authorities and provide a bank guarantee. They must also be able to demonstrate that they are actively engaged in buying and selling goods.
Once a business is approved for Article 23, they can import goods into the Netherlands without paying VAT at the border. Instead, they will need to account for the VAT on their VAT return, and pay the VAT due to the Dutch tax authorities at a later time.
It’s important to note that there are specific rules and regulations governing the use of Article 23, and businesses must ensure that they comply with all requirements. Failure to comply can result in penalties and fines from the Dutch tax authorities.
If you are a business that regularly imports goods into the Netherlands and are interested in using Article 23, it’s a good idea to consult with a VAT consultant. A professional VAT consultant can provide expert guidance and support to ensure that your business is fully compliant with all regulations and can take advantage of the benefits of Article 23.