Your Border Payment Does Not Settle the Import VAT Question

Article 23 helps cash flow, but contracts, customs records and taxable use still decide the deduction.

The VAT return is nearly ready when one import entry catches the founder’s attention. The goods arrived, the freight forwarder handled customs, and import VAT appears in the administration. The amount looks recoverable. It may already have entered the cash forecast.

Payment at the border is not the decisive fact. The company name in the customs process does not settle the issue either. The real question is whether the goods were intended for this business and used for its own taxable transactions.

That distinction matters when the importer, owner, processor, warehouse operator and seller are different companies. A straightforward purchase and resale may produce a clear answer. A shipment handled for a foreign parent, customer or supplier requires a closer look.

The deduction follows the business role

Article 15 of the Dutch VAT Act links import VAT deduction to goods intended for the entrepreneur and used for taxable transactions. The same discipline applies across VAT. Expenditure connected with taxable turnover may support deduction, while expenditure attributable to exempt turnover does not.

A 2025 judgment from the Court of Appeal in ’s-Hertogenbosch applied that statutory test. In ECLI:NL:GHSHE:2025:3535, the taxpayer had not established taxable economic activities supporting the claimed deduction. The case is specific, but its business lesson is broad. A VAT entry needs an identifiable activity behind it.

Ownership is often a strong indicator. An owner buying stock for resale has an understandable commercial position. It is not an absolute rule. Dutch policy provides conditional routes for certain active-processing and consignment arrangements involving a foreign principal. Those routes depend on agreements and records, including visibility of the VAT amount in the Dutch party’s administration.

The practical question is precise: what taxable sale or service by this company explains why these imported goods belong in its VAT deduction? If the answer requires a long reconstruction after the return is prepared, the weakness is already visible.

Article 23 changes cash timing, not entitlement

For a small importer, Article 23 can make a significant difference to liquidity. Without the permit, the company generally pays import VAT through the customs declaration. It may later deduct the amount through the VAT return where the deduction conditions are met.

With Article 23, the company reports import VAT in its VAT return instead of paying it at customs. Where deduction is available, it can also deduct the amount in that return. The immediate border cash outflow can therefore disappear.

That benefit is easy to misunderstand. Article 23 changes the reporting and payment route. It does not turn another party’s goods or taxable activity into the importer’s own. Nor does it correct a mismatch between the contract, customs entry, stock records and sales administration.

The permit carries administrative conditions as well. Official guidance requires, among other things, regular imports from outside the EU and a separate administration showing the import VAT due. Businesses using the Dutch small-business scheme cannot choose this permit.

I read Article 23 as a liquidity tool that demands better discipline, not less. When border payment disappears, the return can make the import look almost frictionless. The commercial facts remain just as important. An unsupported deduction can hide inside a neat accounting entry.

One shipment, several different roles

Return to the founder reviewing that VAT amount. Suppose the Dutch company receives components owned by a foreign customer, repacks them and sends them onward. Its name appears in the import process, but it earns only a handling fee. That is a different position from buying the components, carrying the stock risk and selling the finished goods.

A valid policy route may exist for a qualifying processor or consignee. Ordinary handling, warehousing or repacking should not automatically be treated as such an arrangement. The agreement between the parties and the administration must support the specific route being used.

Representation creates another common source of confusion. A customs representative handles customs formalities. A fiscal representative performs a VAT reporting role under a separate framework. A limited fiscal representative can act for a foreign client in qualifying imports and subsequent supplies, provided written authorisation and the required administration are in place.

The titles may sound similar, but they answer different questions. Who filed the customs declaration? Who reports the VAT? Who owns or uses the goods? Who makes the later taxable supply? These roles can sit with different parties. The deduction follows the commercial and taxable position supported by the records.

The ledger should tell one commercial story

A useful import review joins records that businesses often keep apart. The purchase or processing agreement should connect with the customs evidence, transport documents, stock movement, supplier invoice, onward sale or service, and VAT return.

The Supreme Court addressed the timing of the deduction right in 2021. The right arises when the import VAT becomes due, while the company may exercise it only once it holds the required customs document. That document is part of the evidence supporting the return.

For month-end purposes, I would compare a small sample of recent non-EU imports. Who owned the goods? Who carried the inventory risk? Which company made the taxable sale or supplied the processing service? Which mandate did the freight forwarder hold? Where was the import VAT reported?

This is not a demand for an elaborate tax structure. It is a demand for consistency. Procurement may hold the contract, logistics may speak with the customs broker, and finance may submit the return. Someone still needs to see the whole transaction.

The founder reviewing the VAT return should not have to guess whether the import VAT can be deducted. The answer should already be visible in the company’s commercial role and records. When those agree, Article 23 can protect cash flow effectively. When they do not, a border payment remains a payment, not a deduction.

The data, sourcing, and analysis behind this article were conducted by Linda Pavan Geraedts. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Linda Pavan Geraedts before publication.

References

• Mag elke ondernemer invoer-btw in aftrek brengen? - Taxence
• Gerechtshof 's-Hertogenbosch, Rechtspraak - Core Dutch entitlement to deduct import VAT
• Belastingdienst - General deduction conditions and proof burden
• Belastingdienst - Article 23 permit and the cash-flow effect of deferred import VAT
• Overheid.nl Wettenbank - Active processing and consignment as specific policy approvals
• Hoge Raad, Rechtspraak - Customs documents as a condition for the deduction file
• Belastingdienst - Fiscal representation for foreign importers
• Belastingdienst - Imports by businesses trading outside the EU