For years, the Netherlands, Belgium and some other countries apply a reverse charge mechanism for import VAT.
The frequent importers need to obtain a license based on which they do no longer have to pay import VAT at the border, but the import VAT is shifted to the VAT return. As most of the importers also have a right to reclaim VAT, the import VAT can be deducted in the same VAT return resulting in a zero payment. More countries have started thinking about introducing this import reverse charge mechanism as it makes their country more attractive for importers.
We already informed you that France will introduce a similar arrangement as from next year. Recently the Polish Government also accepted the draft for a new Act on simplifications for businesses. Based on this draft taxpayers having an AEO certificate will be entitled to apply the import reverse charge.
The simplification should also be applicable where the AEO certificate holder acts as the indirect representative for customs purposes. A clear benefit for businesses with an AEO status!
According to the draft the new law should be effected as of 1st January 2015.
Author: Daniëlle van der Meulen – Idema, Sr. VAT Specialist