Update rules for Dutch VAT fiscal representation
The Minister of Finance has issued a new decree regarding the rules for fiscal representatives in the Netherlands which replaces the old decree dated in 1995. This article describes the most important update in relation to the required bank guarantee/bank deposit.
A general fiscal representative for VAT purposes takes care of VAT compliance on behalf of a VAT taxable person who is not established in the Netherlands. In some situations a fiscal representative is mandatory. E.g. for VAT taxable persons who perform distance sales in the Netherlands and are established outside the EU (1) or when a foreign based VAT taxable person wants to apply for an article 23 license for import in order to get a cash flow advantage.
When a VAT taxable persons appoints a general fiscal representative in the Netherlands, a bank guarantee/bank deposit has to be set at/paid to the Dutch tax authorities. Based on the new decree the amount is now determined by taking 5% of the VAT due in a quarter, or when this is higher, by taking 5% of the monthly VAT due when zero rates and exemptions were not applied. Furthermore the minimum amount is € 5,000 and the maximum amount is set to € 500,000 (€ 100,000 for non-consumer goods). Please note that a tax inspector can deviate, these rules are not absolute. A bank guarantee/bank deposit already set/paid can be adapted according to the new rules upon request.
The guaranteed amount is important for the liability of the fiscal representative as the liability is limited to this amount. The new decree clarifies that this liability limit is applicable for each year. This means that when a VAT assessment is imposed for two different calendar years, the general fiscal representative is liable for twice the amount of the bank guarantee/bank deposit.
Pincvision acts as a general fiscal representative in the Netherlands for various clients. Please contact us if you require a fiscal representative or want to receive more information.
(1) Only for non/EU Countries with which no legal instrument exists as intended in Article 204, paragraph 1, second subparagraph of the VAT Directive.