Article 23
Also known as: art. 23, import VAT deferment
Article 23 is the Dutch authorisation under which you defer import VAT to the periodic VAT return. You do not first pay that VAT to Customs. The authorisation comes from the Tax and Customs Administration, not from Customs.
How does the deferment of import VAT under article 23 work?
Without the authorisation, import VAT is charged by Customs at the moment of the declaration. You pay it, or your forwarder advances it, and you reclaim it later through the VAT return. Between paying and reclaiming, working capital is tied up, often weeks, on a monthly return rather months. With an article 23 authorisation, from the Turnover Tax Act 1968, that in-between step disappears. Customs does not put the import VAT up for collection. You take the amount up in your periodic VAT return, as VAT due and, if you have a right of deduction, as input tax. With a full right of deduction the effect on VAT to be remitted is nil. What you gain is cash, not a lower rate. The charging of import duty does not change. Article 23 touches only the VAT. Duty, excise and anti-dumping stay with Customs, and anyone who has those advanced by their forwarder keeps that advance flow, also with article 23.
Who can apply for an article 23 authorisation?
The authorisation is intended for traders who are VAT-liable in the Netherlands and import regularly. You apply to the Tax and Customs Administration (Belastingdienst), not to Customs. A trader established in the Netherlands applies for themselves. A trader not established in the Netherlands does it through a fiscal representative, usually combined with limited fiscal representation. The Belastingdienst looks at the VAT administration, at the compliance history and at whether the import flow justifies the deferment. An incidental consignment is not an argument. A continuous import is. After grant the authorisation gets a number that has to come back on the import declaration. Without that number in the right field Customs continues to collect the VAT. The authorisation hangs on the business and on the VAT number. After a merger, a new legal form or a move of the fiscal unity you have to realign it. Carrying on under an old number is a classic reason that a consignment suddenly does get VAT at import, while the previous hundred did not.
What do you put on the import declaration if you have article 23?
In DMS you indicate that the VAT is deferred, with the article 23 authorisation number. Customs then still calculates the VAT, so that the amount remains visible on the declaration, but does not put it up for collection. The duties are collected, or put on the periodic settlement, depending on your payment deferment. The number has to match the declarant or, in fiscal representation, the representative who holds the authorisation. A number of the client on a declaration that you file in indirect representation does not close. DMS refuses the combination, or the VAT still falls into collection. That is a master-data error, not a rate error. Check the combination of EORI, form of representation and authorisation number when the client is set up, not only at the first refusal. On a daily flow the first refusal is immediately a row of files that have paid VAT you did not want to advance.
How does the deferment come back on the periodic VAT return?
The amount that Customs has calculated but not collected, you take up in the VAT return for the period in which the import took place. In the box for import VAT on the due side, and, with a right of deduction, on the input-tax side. The two sides have to match. An import you forget to take up is VAT due that is too low. An import you take up without the input tax is an over-remittance. The source is the import declaration, with the MRN and the VAT amount that sits on it. Anyone who pulls the VAT return from the supplier's accounts misses the consignments that were imported through a forwarder and not yet invoiced, or counts them twice when the forwarder's invoice arrives later. Pull the box from the customs files of that period, not from the payables. At a control the Belastingdienst lays the box next to the data from Customs. That is a mechanical test. A difference of one consignment or a period next to it comes up there. Keep per MRN which VAT amount was declared in which period.
What is the difference from fiscal representation?
Article 23 is the deferment. Fiscal representation is the construct through which a trader not established in the Netherlands meets their VAT obligations here. They are often used together, but they are two decisions. A Dutch shipper with their own establishment needs article 23 and no fiscal representative. A Chinese webshop that imports in the Netherlands needs both. The limited fiscal representative applies for the article 23 authorisation in the name of the foreign trader, or holds it in their own capacity, depending on the setup. They are liable for the VAT that runs through that construct. That is why representatives screen their clients and ask for security before they put the authorisation to work. Anyone who mixes the two on the declaration puts the representative's authorisation number on a file of a client who themselves hold article 23, or the other way round. Customs then collects the VAT, or refuses the declaration. The master data per client must hold the form of representation and the authorisation number as one set.
What goes wrong if the authorisation does not match the declaration?
The most common failure is a valid authorisation that is not on the file. The declaration is accepted, the VAT is collected, the forwarder advances it, and someone notices at the end of the month when the advance is unexplainably high. Reclaiming from Customs is possible, but it is work, and the working capital is already gone. The reverse also happens: an authorisation that has been withdrawn or hung on an old entity, while the master data still carries it. Then the declarant thinks the VAT has been deferred, while it has been collected, or the declaration is refused. Both cases are preventable with a check of the number at setup and at a periodic recheck, not only on the first consignment. Article 23 saves no tax. It saves liquidity. That effect grows with the import value. On a few consignments a year it is administration. On a continuous flow it is money that would otherwise sit for months, and then one forgotten number on the declaration is immediately visible in the cash.