General Fiscal Representation

When foreign entrepreneurs import goods into the EU, they generally have to pay import VAT. This import VAT can later be reclaimed by the foreign entrepreneur through the Dutch VAT return. This poses a significant liquidity disadvantage. Under certain conditions, a foreign entrepreneur does not have to pay import VAT, namely through fiscal representation.

Foreign entrepreneurs can use the Dutch system of fiscal representation, which means they do not have to pay import VAT, but it is reverse charged to the Dutch VAT return. This provides a significant liquidity advantage. Another advantage of importing goods with fiscal representation is that the goods, after the import declaration, are free and can be transported without customs supervision. The adage ‘Logistics leads Customs’ is fully applicable here.

The Netherlands has two forms of fiscal representation, namely general fiscal representation (GFR) and limited fiscal representation. Below we take a closer look at general fiscal representation.

General Fiscal Representation

With General Fiscal Representation the foreign entrepreneur does not need to pay import VAT, but the VAT is reverse charged to the Dutch VAT return. With GFR the foreign entrepreneur will needs an own VAT number. A general fiscal representative is responsible for all transactions carried out by the foreign entrepreneur and must apply for a specific permit at the tax authorities. GFR is often applied in cases where limited fiscal representation is not legally possible. Besides the advantage of not paying VAT at import, the foreign entrepreneur is allowed to have other physical flow of goods (both B2B and B2C). This includes buying goods within the Netherlands or from other EU countries.  Additionally, Dutch VAT can be reclaimed via the foreign entrepreneur’s own VAT return. In using GFR a foreign entrepreneur can operate almost completely like a company established in the Netherlands.

Customized service

General fiscal representation offers many possibilities to optimize the logistics and the administrative process. GFR requires a lot of customization, because of the wide range of possibilities.

We have been offering GFR for many years and are true specialists in this field. If interested, you can always contact us, and we will look at the best possible fiscal solution for your company.