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EU VAT is a border-adjusted consumption tax, applied equally to domestic and imported goods, ensuring neutrality and avoiding trade distortions, unlike tariffs, which target foreign products.
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Critics often misinterpret EU VAT as a trade barrier, but it is recoverable for importers, meaning it does not create a net cost or unfair advantage in global trade.
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Import VAT deferment schemes in many EU states allow businesses to postpone VAT payments until filing returns, improving cash flow, reducing upfront costs, and supporting cross-border trade operations.
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Specific programs, such as the Netherlands’ Article 23 license, enable reverse charge accounting for import VAT, streamlining compliance, enhancing liquidity, and benefiting both domestic and foreign businesses trading within the EU.
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