Do I need to pay VAT upon importation of good?
Your business imports goods from non-EU countries (USA, China, UK, Switzerland, etc.)?
Both customs duties and VAT should normally be paid by your company in the EU country where the goods are customs cleared. It means that your company will prefinance an important of VAT since the VAT must be paid immediately but can only be recovered in the VAT return.
How to avoid the prefinancing of VAT?
EU countries are allowed by VAT directive to provide for techniques or mechanisms to defer the payment of import VAT In that legal context, several Member States have adopted postponed accounting and deferred payment measures for VAT on imports.
- Deferred payment means that the payment of the import VAT to customs is deferred for a nationally determined period. This is covered by Article 211, first paragraph, of the VAT Directive which provides that Member States shall lay down the detailed rules for payment of the import VAT;
- Postponed accounting means that import VAT is accounted for and paid with other VAT obligations in the periodic VAT return. This is covered by Article 211, second paragraph, of the VAT Directive.
The application of these measures means that your business does not have to bear a cash flow inconvenience as a result import VAT or that the inconvenience is mitigated.
How measures have been implemented in EU countries?
All Member States apply either postponed accounting, or deferred payment or both.
| Member States | IMMEDIATE PAYMENTS | POSTPONED ACCOUNTING VIA VAT RETURN | DEFERRED PAYMENT FOR VAT AND CUSTOMS (SIMILAR DELAY) | SPECIFIC DEFERRED PAYMENT FOR VAT PURPOSES ONLY | DEFERED PAYMENT FOR CUSTOMS ONLY |
|---|---|---|---|---|---|
| Austria | X | X | X | ||
| Belgium | X | X | X | X | |
| Bulgaria | X | X | X | ||
| Croatia | X | X | X | ||
| Cyprus | X | X | |||
| Czech Republic | X | X | X | ||
| Denmark | X | X | X | ||
| Estonia | X | X | X | ||
| Finland | X | X | X | ||
| France | X | X | X | X | |
| Germany | X | X | X | ||
| Greece | X | X | |||
| Hungary | X | X | X | ||
| Ireland | X | X | X | ||
| Italy | X | X | X | X | |
| Latvia | X | X | X | ||
| Lithuania | X | X | X | ||
| Luxembourg | X | X | X | ||
| Malta | X | X | |||
| Netherlands | X | X | X | X | |
| Poland | X | X | X | ||
| Portugal | X | X | X | X | |
| Romania | X | X | |||
| Slovakia | X | X | |||
| Slovenia | X | X | X | ||
| Spain | X | X | X | X | |
| Sweden | X | X | X |
To keep in mind
All Member States apply either postponed accounting, or deferred payment or both. Conditions for applying these mechanisms are however determined by each country.
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