How Deferred VAT on Imports Works: Benefits, Conditions, and Strategic Financial Management

• Deferred VAT on imports helps improve financial liquidity for businesses.
• Payment of VAT can be postponed until the tax return is filed.
• This mechanism avoids immediate taxation at the border, allowing for investment and growth.
• For imports from non-EU countries, VAT is declared in the tax return.
• For EU imports, the reverse charge mechanism is used.
• Deferred VAT applies only to VAT, not customs duties.
• Benefits include improved cash flow, better financial management, and increased competitiveness.
• Conditions include being an active VAT payer and submitting customs declarations.
• Incoterms affect who is responsible for transport, insurance, and customs costs.
• Deferred VAT allows for tax payment postponement, optimizing cash flow and reducing administrative costs.

Source: eurofiscalis.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---