VAT deferral in the Netherlands: How Article 23 works for importers

Why VAT deferral matters for importers

For businesses importing goods into the Netherlands from non-EU countries, VAT (Value Added Tax) is an unavoidable cost. Normally, import VAT must be paid immediately upon goods entering the country, creating a financial burden. However, Article 23 of the Dutch VAT Act allows businesses to defer this payment, offering significant cash flow advantages.

By using Article 23, importers do not need to pay VAT upfront at customs. Instead, the VAT amount is reported and settled through the company’s regular VAT return, eliminating the need for large immediate payments. This is especially beneficial for businesses that frequently import high-value goods or operate on tight cash flow margins.

How does VAT deferral work under Article 23?

Without Article 23:

• Businesses must pay import VAT immediately when goods enter the Netherlands.
• The VAT amount is reimbursed later, but this creates a cash flow gap.
• Administrative work is more complex, requiring upfront calculations and payments.

With Article 23:

• Import VAT is not paid upfront at customs.
• Instead, it is declared in the VAT return (Box 4a) and settled in the same cycle.
• If the business is VAT-registered and eligible for input VAT deduction, the payable amount is effectively zero.

For businesses that regularly import goods, Article 23 is a powerful financial tool, ensuring that large sums are not tied up in VAT payments.

Who benefits most from Article 23?

1. Companies with high import volumes

Businesses that import frequently or deal with high-value goods can benefit significantly. Without VAT deferral, cash flow constraints can arise due to large upfront tax payments.

2. Businesses eligible for VAT deductions

If a company is VAT-registered and entitled to deduct input VAT, Article 23 simplifies the reclaim process, ensuring that VAT does not need to be pre-financed.

3. Importers using the Netherlands as a distribution hub

Since the Netherlands is a key logistics hub in Europe, many companies import goods through Dutch ports and re-export them across the EU. Article 23 ensures that importers don’t face VAT costs at the border, making the Netherlands an attractive entry point for international trade.

Key considerations before applying for Article 23

1. Eligibility Requirements

• Businesses must be VAT-registered in the Netherlands.
• If a company is not established in the Netherlands, it must appoint a fiscal representative.
• The business must have a good tax compliance record (no outstanding VAT debts or compliance issues).

2. Administrative Responsibilities

• The company must correctly report import VAT in the VAT return (Box 4a).
• Errors or non-compliance with VAT reporting could result in fines or revocation of Article 23 benefits.

3. Working with a Fiscal Representative

Non-Dutch companies that want to benefit from VAT deferral must engage a fiscal representative based in the Netherlands. This representative handles VAT registration, compliance, and reporting obligations.

Common challenges importers face with VAT payments

1. Cash Flow Pressure

For importers that do not use Article 23, paying VAT upfront ties up capital that could otherwise be used for operational growth.

2. Administrative Complexity

For businesses dealing with large import volumes, manual VAT processing can be a burden. Using VAT deferral helps streamline accounting and reporting.

3. Compliance Risks

Incorrect VAT reporting can lead to fines. Businesses must ensure accurate declarations, particularly when working with international suppliers.

How to get started with Article 23

For businesses looking to leverage VAT deferral, the first step is ensuring eligibility and gathering the necessary documentation. If you’re new to VAT regulations in the Netherlands, working with a tax consultant or fiscal representative can help you navigate the application process smoothly.

For a detailed, step-by-step guide on how to apply for an Article 23 license, check out our practical guide to applying for Article 23, which includes eligibility requirements, required documents, and expert tips to ensure a successful application.

Conclusion

Article 23 provides a valuable advantage for importers by eliminating upfront VAT payments and streamlining financial management. Whether you're a Dutch-based business or an international company importing through the Netherlands, VAT deferral can help optimize cash flow and reduce administrative burdens. However, businesses must ensure they meet the eligibility criteria, comply with VAT reporting obligations, and—if necessary—work with a fiscal representative to maximize the benefits of this provision.

By leveraging Article 23 effectively, businesses can reduce financial strain, improve operational efficiency, and strengthen their competitive position in international trade.

Not sure if VAT deferral is right for your business? Our guide on What is Article 23 and how does it simplify import VAT? explains the fundamentals of how this license works.

If you're ready to take advantage of VAT deferral, follow our Step-by-step guide to applying for an Article 23 license for a smooth process.