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Published:November 4, 2022

The VAT Deferment Scheme: Explaining Article 23

In the world of VAT, when something seems too good to be true, it usually is. Is this the case with the import VAT scheme in The Netherlands? The Netherlands is allowing traders to import goods from outside the European Union (EU) immediately and only pay import VAT at a later stage during their standard VAT return. Is there a catch? Let’s find out.

The VAT Deferment Scheme: Explaining Article 23

Everyone loves a good deal. Is this the case with the “no VAT” policy in the Netherlands? Both foreign and local companies importing goods into the Netherlands can now conveniently pay “no VAT” to the Netherlands Customs Department. But before you collect your get-out-of-VAT-free card, it needs some clarifying. This VAT deferment scheme permits importers to avoid immediate payment of VAT (VAT deferral), but there’s one condition - an Article 23 licence. Here’s what businesses need to know.

What is an Article 23 licence? 

An Article 23 licence or permit issued by the Dutch tax authorities allows importers to defer instant payment of import VAT at the border. Instead, the VAT payment moves to when you file your VAT return. To obtain an Article 23 licence, businesses must meet specific legal requirements and a deposit may be required.

The proof is in the permit: obtaining an Article 23 licence

If you’re a domestic business, you can obtain an Article 23 licence if:

  • You have a fixed establishment in the Netherlands
  • You import goods from non-EU countries regularly
  • Your records are updated to display how much VAT you pay on import 

If you are a foreign business that often deals with importing and exporting in the Netherlands, you cannot apply for an Article 23 licence yourself. You must:

A fiscal representative is responsible for the following (where applicable):

  • Completing and filing your VAT return within the stipulated time frame
  • Completing the intra-community transaction declaration
  • Ensuring the reverse charge mechanism is applied

The benefits of an Article 23 licence

If you are part of a global supply chain, importing goods is necessary to keep the production cycle moving. Here’s how Article 23 ensures that there aren’t any unexpected bumps in the road. 

It increases your cash flow

In normal circumstances, businesses pay for import VAT immediately. Generally, this is not a small expense. In addition, this expense is often only recovered at a later stage - when businesses submit their VAT return. However, obtaining an Article 23 licence ensuress better cash flow by delaying the payment of import VAT until submission of the VAT return.  

It’s time-efficient and convenient

By obtaining the licence, there is no delay in business transactions, and your goods are immediately available in the Netherlands, streamlining the import process. 

Article 23’s most frequently asked questions 

Article 23 can leave many businesses with more questions than answers. So here’s a quick Q&A to ensure you aren’t left with doubts. 

  • Does my Article 23 licence have an expiration date?

If all the necessary legal requirements are met, then an Article 23 licence will be granted with an open-ended date. However, businesses must keep in mind that authorisation can still be withdrawn if businesses fail to meet the underlying tax rules. 

  • Can I appoint an independent company (a customs broker) to act as my fiscal representative?

Foreign businesses can choose whether they would like to appoint their third-party logistics company or an independent VAT company as their fiscal representative. However, businesses cannot obtain a licence without one. 

By choosing an independent broker like VAT IT, businesses benefit from an industry-specific approach and a team of experts to guide them through the process.

  • Will the VAT deferment scheme be feasible for my specific business? 

Businesses can choose whether or not they would like to implement the VAT deferment scheme depending on the nature of the imported goods or the onward supply chain after import.  These factors may influence if an Article 23 licence is feasible for your business. 

Take the advantage to grow your business

Make sure your business utilises the opportunity to improve cash flow. 

Get direct and accurate information from our fiscal representation professionals to ensure you get the most out of your import into The Netherlands. 



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