What is Article 23?
Article 23 of the Dutch VAT Act allows businesses to defer the payment of import VAT from non-EU countries to their periodic VAT return. Normally, importers must pay VAT immediately when goods enter the EU. With an Article 23 permit, that VAT payment is postponed and reported instead in the VAT return.
For e-commerce businesses that regularly import goods — for example from China — this can be a major advantage. It prevents large pre-financing of VAT and improves cash flow.
Why does Article 23 exist?
The main purpose of this regulation is to support international trade and reduce the financial burden on businesses. Without Article 23, importers must first pay VAT at customs and can only reclaim it later through their VAT return — a process that can take weeks or even months.
By deferring the payment, you both declare and deduct the same VAT amount in your return. The result is a neutral effect: no actual payment, as long as you are entitled to full VAT deduction.
How does Article 23 work in practice?
Once you have an Article 23 permit, you no longer pay VAT at customs. Instead, you report it in your VAT return under section 4a (supplies from outside the EU) and reclaim it simultaneously under section 5b (input VAT).
To qualify for the permit, you must:
Be VAT-registered in the Netherlands
Regularly import goods from non-EU countries
Keep accurate and complete VAT records
Use the goods for taxable business activities
The permit is issued by the Dutch Tax and Customs Administration (Belastingdienst) and is linked to your VAT number. When goods are imported, your freight forwarder or customs broker will apply the correct procedure if they know you hold the permit.
Example: an e-commerce business importing €250,000 from China
Imagine a Dutch online retailer importing €250,000 worth of goods from China. Without an Article 23 permit, customs would charge 21% VAT on import — €52,500 — payable immediately. The company would later reclaim this in its next VAT return.
With the permit, the business doesn’t pre-finance that €52,500. Instead, it declares and deducts the same amount in its return. The result: no VAT payment at import, and €50,000+ of liquidity available for other investments such as inventory, marketing, or staff.
For fast-growing e-commerce companies, this difference can be significant.
Key considerations and risks
Although highly beneficial, the scheme requires strict administrative accuracy. Errors in VAT returns or misuse of the permit can lead to assessments and fines. The regulation only applies to goods used for taxable business purposes — not for private use or exempt activities.
Additionally, the customs declaration must use the correct EORI and VAT numbers. If you store goods abroad (for example in Germany or Poland) or use fulfillment services, the VAT setup can become more complex. Incorrect application may result in double taxation or loss of deduction rights.
Conclusion
The Article 23 permit is a powerful tool for e-commerce companies importing goods into the EU. It simplifies VAT compliance, prevents pre-financing, and improves cash flow — as long as the VAT administration is handled correctly.
When in doubt, it’s wise to consult a VAT specialist familiar with e-commerce and international supply chains to ensure proper application of the scheme.
