Logistics service providers have a competitive advantage with LFR
To import goods without paying VAT can also be done by non-Dutch entrepreneurs. With Limited Fiscal Representation almost all logistic concepts through the Netherlands are possible. The Netherlands is a distribution country and has as such a solid competitive advantage over other EU-countries. In the Netherlands foreign entrepreneurs do not have to pay VAT at the import. This makes many costly customs-warehouses redundant. FreightZone has  customers that make use of this advantage. They have a liquidity advantage since they do not have to pay VAT. When cleared, the goods are free goods without any customs interference and you can apply the LFR to almost any logistic concept. Limited Fiscal Representation has nearly unlimited possibilities.
Advantages
The Netherlands takes care of the logistics of many non-European goods. Take for example Chinese goods that have to be distributed in the EU. Containers with goods are stripped in the Netherlands and divided among different European destinations. The trader or owner of the goods is often not established in the Netherlands. Clearing the goods with Limited Fiscal Representation (LFR) presents for the non-Dutch client the following advantages:

No import VAT is due.

• When cleared the goods are free goods and no longer require customs interference.
• The goods can be delivered all over Europe; they can even be exported again to countries outside the EU.
• The owner of the goods needs not to be established in the Netherlands or to be registered here.
• No (bank) guarantees need to be issued.
• There are no set-up and close-down costs.
• Goods can (unlimitedly) be kept in stock.
In three short cases the possibilities can be described the best.
Case 1: Liquidity advantage

A German commercial firm imports thousands of containers from the Far East for various purchasers in Germany, other EU-member states and Switzerland. The transports first took place through Hamburg where ‘Einfuhrumsatzsteuer’ (import VAT) needed to be paid. Only after one to two months the Incountry Revenue would return this VAT. By letting pass these transports through Rotterdam and clear the goods in the Netherlands with LFR, a liquidity advantage of a few million Euros was created. For a commercial firm this is very relevant. The European VAT legislation on fiscal representation could be met by making some adaptations to the invoicing and administration.
Case 2: Do not register

For example a Dutch company buys goods on consignment in the China. It wants these goods only to be invoiced at the time they are entered in the production process. Thus the goods remain the property of the Chinese company while being in the Netherlands. It is made possible by clearing the goods with LFR. Then the Chinese company does not need to register for VAT in the Netherlands. It only took a simple agreement between the Chinese exporter, and the Dutch importer and FreightZone liason office, to settle the case in the administrative and fiscal field.
Case 3: Value Added Logistics

A Dutch company is specialised in Value Added Logistics and receives the order from a German company to pack screws from China out of bulk packaging into smaller packages. The screws are finally sold all over Europe in building supplies stores. FreightZone proposed the German client to clear the screws with Limited Fiscal Representation. On the basis of the goods and transport administration of the Dutch service provider the goods flow could be documented towards the final purchasers. The German client did not need to register for VAT in the Netherlands. Without bank guarantees or other obligations the screws could be distributed from the Netherlands without any problem.
Experience

Fiscal Representation was introduced in the Netherlands in 1992. In the course of the years more applications have been offered. Important is that the administrative and logistic processes are correctly documented to comply with the VAT-rules. FreightZone associates have years of experience. With simple techniques all requirements can be met.

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