The human interface in logistics

Setting up European Logistics and fiscal representation

Table of contents

•  Setting up your European logistics •  Import duties •  VAT •  Fiscal representation •  10 step approach

Setting up European Logistics

•  Congratulations! –  Choosing The Netherlands grants you with the maximum

flexibility in European gateway locations

•  Milestones to the fist actual movements of freight into Europe

•  Do it right from scratch!

Import duties

Import duties are well known globally to any company importing or exporting goods to and from foreign countries and different continents. Within the EU the import duties payable on your goods are the same in any EU-country. It is a percentage raised over the declared value or CIF amount (cost, insurance and freight…)

Import duties 2

In some cases the import duties are influenced both upward and downwards by bilateral agreements between the EU and non EU foreign governments. In these cases, mostly special documents need to accompany the shipments or shipment documents. Examples are:

–  Certificates of origin –  Import license when quota are set –  Anti dumping surcharges

Based on goods descriptions and harmonized codes provided by you, we will be able to determine the amount of duties payable on your products. In some cases we will require the Dutch customs authorities to officialize our interpretations for your own security and liability.

Bonded storage

Midl holds a so called license-E customs entrepot (bonded storage). This type of license grants us with the maximum achievable flexibility. Customs randomly audits Midl to verify that the right amount of non customs cleared goods, are physically at the right location in our warehouse

Do you need bonded storage?

Bonded storage is however only required in case the amount of duties payable is high enough to justify the extra handling (customs clearance) charges. Your cash flow and/or interest advantages should live up to the above.

–  Consider the value of your goods –  Consider the turnover rate of stock annualy –  Consider the revenue targets outside the EU (Middle

East, Africa and former Eastern European Countries

VAT, Value Added Tax

Value Added Tax (VAT) is payable over the CIF declared value plus import duties. The VAT percentage differs amongst EU countries. In The Netherlands the VAT is 19%. A fairly large percentage which could backfire enormously when not dealt with properly… All VAT registered companies in the EU are considered not to be private citizens, but established, registered companies. As long as these companies trade amongst each other, no VAT needs to be (physically) paid by these companies.

VAT deferment

The VAT payable at entrance in the EU is deferred to a so called VAT registration number, held by the importer of record (or foreign entrepreneur with his own Dutch VAT number > Fiscal Representation) Whenever you sell goods to a VAT registered company anywhere in the EU, the VAT on that particular sale is deferred to the VAT registration number of the consignee on the sales invoice.

Fiscal representation

In case your company does not have a legal entity in The Netherlands, and you are not intending to issue one, you would need fiscal representation by a third party… Limited fiscal representation Your goods will be cleared on a general VAT registration number of the 3rd party you work with. Since more importers work with the same number, the administration might become vague… In any case, this 3rd party will have to request for a (foreign) bank guarantee of yourselves. Since they will be liable for non paid VAT or wrongly registered VAT declaration. In most cases the liability will be weaved towards yourselves, leaving you with unlimited risks…

General fiscal representation

In this case your company has its own VAT registration number, issued by the Dutch tax authorities. Your risk will be limited to the bank guarantee which the Dutch authorities require from you. Your/or fiscal partner will perform the VAT administration on your behalf Since the fiscal representation is handled by a seperate accountancy firm, you have maximum flexibility of changing your 3rd party logistics provider without having legal and tax consequences

Bank guarantee

Based on your expectations of your sales within the EU , Dutch tax authorities will require a bank guarantee of your company, which should be issued with a Dutch bank. In most cases the large Dutch bankers will have a foreign representation or their own setup in your country which eases issuing the guarantee since you can arrange this locally.

Intrastat and CBS listings

In case your intra-European sales exceed approximately € 400.000,- the Dutch authorities will require you to list an administration of numbers, values and volumes of your goods which have moved within the European Union, including returns and so on. This will have to be done on a monthly basis. The earlier mentioned fiscal representant will file this administration on your behalf as well.

Midl’s approach

Most global accountancy firms will be able to offer you the fiscal representation services. Midl has a relationship with a fiscal partner (established accountancy firm) who will act as a fiscal representative on behalf of Midl’s customer.

The process (flow)

YOU Midl’s fiscal partner / representant VATKO

Four step approach to launch…

Collection of details and forms from your company Undersigning and return of the VAT Registration forms of our fiscal partner Applying for a VAT number with Dutch customs (performed by our partner) Bank Guarantee

Info and documents to be supplied by you •  A copy of Certificate of Incorporation •  A copy of the Identity card / passport of the managing director/

CEO •  A statement from the USA tax authorities: Tax status of their

business (USA: submit an IRS form 8802 and receive an IRS 6166 statement)

•  Estimated total value of goods your are planning to export to EU for 2012. The amount of the Bank Guarantee is depending on this.  Usually the tax authorities calculate the amount of the guarantee as follows:  Imported value per year x19% / 12 x  factor 3 to 5. 

•  As soon as the Dutch fiscal authorities receive the bank guarantee the procedure for appointing a tax representative will be started. Not all international banks are accepted by the Dutch tax authorities. Customers’ bank might need to issue a contra guarantee with an established Dutch bank. Midl and her fiscal partner can assist herein.

•  Midl and her fiscal partner will apply for a VAT-identification number on behalf of the customer, a license to act as tax representative and an article 23 code number, as soon as the bank guarantee is taken care of and the original documents, mentioned above are received from the customer.

Information to be supplied by us

•  Midl and her fiscal partner will provide a tax representation agreement concerning the services to be provided to customer.

•  Midl will provide a physical distribution agreement* •  A power of attorney •  A letter of revocation and withdrawal •  A filled in VAT Registration Status Enquiry Form

Midl and her fiscal partner need to receive signed and authenticated originals of the above mentioned documents as well as the agreements.

* Only in case you decide to appoint Midl as your 3PL

Contact details

Midl Integrated Logistics BV Marc Poelenjee m.poelenjee@midl.nl Werner Derksen w.derksen@midl.nl Bijsterhuizen 11-54 6546 AS  Nijmegen

The Netherlands Phone : +31 (0)24 750 3210

Fax : +31 (0)24 750 3219

Vatko BV Marja van Hoek info@vatko.nl Verlengde Velmolen 2b 5406 NT Uden

PoBox 419, 5400 AK  UDEN The Netherlands Phone : +31 (0)413 245 452

Fax :  +31 (0)413 24 7551