How does Fiscal Representation work?

The regulation in the European Union states that at the time of an import declaration the import duties and VAT (21%) over the value of the goods on the customs declaration has to be paid. You can reclaim the VAT, but this requires registration in the Netherlands and the reclaim will only be paid after a few months.

In the Netherlands, there is a possibility to use a license called article 23. In this way, you transfer the VAT payment to the moment of the VAT declaration. This means that the import VAT doesn’t have to be paid at the moment of the import declaration but at the moment that Redwood Fulfilment will fill out the VAT declaration. You can also deduct it at the same time so the amount will be €0,00.

This is typically only granted for an established company in the country of import but the Dutch Tax Authorities have decided to issue a license for Dutch companies called “fiscal representative”.

VAT Deferment

With this license Redwood Fulfilment is able to act as a fiscal representative for other non-established companies, this means they can also defer the import duties for your company until the VAT declaration. We can represent your company and, as long as we have a signed agreement, you will have the same rights as Redwood Fulfilment on the moment of import.

Two options

We have two options regarding fiscal representation:

General Fiscal Representation (GFR) and Limited Fiscal Representation (LFR). In case you want to sell B2B as well as B2C General Fiscal Representation is your solution.

GFR means your company will be registered at the Dutch Tax Authorities and you will have your own Dutch VAT number. Redwood Fulfilment will be your representative in The Netherlands and will custom clear goods under your own Dutch VAT number with article 23 (this means no payment of VAT on the moment of import) and will make sure that all fiscal and legal requirements are met.