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Fiscal Representation - Positive impact due to VAT deferral

Positive impact on your cash flow due to VAT deferral

Non-resident companies who made taxable supply in certain countries often require a fiscal representation. In some countries like The Netherlands you can opt for a fiscal representation.

In some EU countries there are 2 kinds of fiscal representation:

  • Limited fiscal representation
  • General fiscal representation

Ad 1 Limited fiscal representation

A non-resident company can appoint a limited fiscal representative who will take care of all VAT obligations and formalities related to the importation and the transportation of the goods into the European Union. The VAT sub number of the limited fiscal representation will be used for the VAT deferment. In this situation the non-resident company does not have to register for VAT in the local (European Union) country. Multiple foreign companies can be managed under the limited fiscal representative number.

Ad 2 General fiscal representative

If the non-resident company buys goods from one or more suppliers from other European Union member states or if the non-resident company deals with long-distance sales to parties in the European Union, a general fiscal representative needs to be appointed by the non-resident company. The non-resident company needs to register for VAT in the European Union in order to use the general fiscal representation.

The benefits to opt for a fiscal representation are:

  • Delayed VAT payments: positive impact on your cash flow due to VAT deferral
  • Easier trading in the European Union: no need to have a fixed establishment or a company in Europe as the VAT number of the fiscal representation can be used
  • No complex administration obligations: the fiscal representative will take over the VAT compliance responsibility, i.e. file the VAT returns and EU sales listings and submit the intrastate declarations.

Contact us now for more information