Importation: what does it mean ?
Your company based in the U.S.A. or in China imports goods in Belgium where they are temporarily stored (importation of goods in Belgium). The goods are sold to various EU companies located all around Europe afterwards.
Your company, acting as the importer of the goods, should normally be VAT registered in the country where the custom clearance is done (i.e. where goods are put into free circulation) and pay local import VAT immediately (cash payment: VAT on importation is paid to Customs Authorities at the border where the goods enter the European Union).
Member States determine the conditions under which the imported goods should be introduced into their territory. They determine the administrative process of importation. Member States may allow a system in which import VAT is paid and recovered simultaneously in a periodic VAT return. Doing so the cash flow inconvenience of import VAT is neutralized. The return will include both the VAT due and the deductible VAT (postponed accounting via VAT return). A deferred payment of import may also be authorized [deferred payment] whereby the cash flow inconvenience can be mitigated.
Managing the cash flow of the company is a key issue. Despite of the principle of VAT neutrality, cash-flow inconvenience derived from the VAT system is a major concern and is perceived as having a significant financial impact. However, several Member States offer procedures whereby said cash flow inconvenience can be mitigated or avoided.
Companies importing goods from a Third Country (i.e. non EU places) into EU must pay attention to the following issues:
- Check whether or not import can be VAT exempt (bonded warehouse, VAT warehouse, tax warehouse, importation of goods followed by a subsequent intra-EU supply etc.);
- If no VAT exemption is applicable, proceed with the local VAT registration
- Check whether VAT on importation need to be paid immediately or if Member state provides for special measures allowing deferred payment of import VAT