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 and limited fiscal representation. Below we take a closer look at limited fiscal representation (LFR).

Limited Fiscal Representation (LFR)

We offer LFR for the import of goods and the subsequent delivery. This subsequent delivery must go to another member state with 0% VAT as an intra-community delivery. For example, if a German importer imports goods via Hamburg, he must pay German import VAT, which he can only reclaim later through the German VAT return. If the same goods enter the EU via Rotterdam, the German importer does not have to pay import VAT, but the VAT is reverse charged to the Dutch VAT return. Subsequently, the goods can be forwarded to Germany with 0% VAT as an intra-community delivery.

LFR is only possible for B2B transactions and not for B2C transactions.

Distribution Country

The system of limited fiscal representation is very flexible. Distributors and logistics companies can fully benefit from this. Many foreign companies that transport goods via the Netherlands use LFR due to the liquidity advantage and logistical flexibility. Because the Netherlands is a real distribution country, the technique of declaring with LFR is also widely applied.

We have been offering LFR for years and are true specialists in this field. If interested, you can always contact us, and we will look at the possibilities together.