Fiscal representation Netherlands compulsory


Fiscal representation Netherlands compulsory


Netherlands has the best climate for companies looking to expand in the EU and having fiscal representation in Netherlands could be a great business move.


Let us start with the different kinds of fiscal representatives that there are. There are two kinds of fiscal representatives in Netherlands. The first kind of representative has a general license and the second kind has a limited license. The first kind of representative with a general license can act for the nonresident company wrt goods and services for which VAT becomes due in Netherlands, acquisitions of goods within the community and in case of import of goods and the second kind of representative who has a limited license can act for the nonresident company only in the case of import of goods and their subsequent supply.


Fiscal representation in Netherland can get you the benefits arising out of the flexible laws of Netherlands and the benefits of the proactive attitude of the tax authorities in Netherlands. You could find a fiscal representative who has experience of international trade and such a company or person will not be hard to find because the Port of Rotterdam is the largest in EU and it sees an incoming of huge quantities of cargo on a daily basis.


Appointment of a fiscal representative is also important because you cannot get an Article 23 permit without a representative. Let’s look at what article 23 permit is. Importers who are importing goods into Netherlands can avoid paying VAT to the Dutch customs only when they have article 23 permit. In a subsequent tax return, the import VAT amount will be reverse charged. Reverse charge shifts the liability from the seller to the buyer when the buyer is an entrepreneur in Netherlands or when the buyer has a permanent establishment there or when the buyer is a legal entity in Netherlands. Reverse charge applies to both goods and services.


One case in which fiscal representation is a necessity and is mandatory is when the company applying for Article 23 license is a foreign company which is neither established in Netherlands nor has a permanent establishment in Netherlands. What is pertinent to note is that companies that can act as fiscal representatives have to be established in the Netherlands.


Now let us look at the other case in which a fiscal representative is a mandatory requirement. It is when the goods are being sold in a bonded warehouse. Let us look at what a bonded warehouse is. It is also called a customs warehouse and is any secured place which the custom authorities supervise. This custom supervised warehouse is used to store imports before they are re-exported or while imports are waiting for release before their value is determined and taxes levied on them are calculated and paid


The need for a fiscal representative cannot be emphasized enough and especially in Netherlands.


I would like to conclude by saying that it’s all well and good that you have expansion plans but it is important to remember and plan for taxes, tariffs and custom rates otherwise you might have to put your expansion plans on hold.