WHY INVEST IN HOLLAND? Customs
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WHY INVEST IN HOLLAND? Customs
WHY INVEST IN HOLLAND? Customs Introduction Netherlands Foreign Investment Agency (NFIA) The NFIA (Netherlands Foreign Investment Agency) is an operational unit of the ministry of Economic Affairs. The NFIA helps and advises foreign companies on the establishment, rolling out and/or expansion of their international activities in the Netherlands. The NFIA was established 35 years ago, and has since then supported more than 3,300 companies from nearly 60 countries in the establishment or expansion of their international activities in the Netherlands. Besides its headquarters in The Hague, the NFIA has its own offices in the United Kingdom, Turkey, North America, Asia, the Middle East and Brazil. Additionally, the NFIA works together with Dutch embassies, consulates-general, and other organizations representing the Dutch government abroad, as well as with a broad network of domestic partners. Please be sure to stay in touch with your NFIA representative in order to keep up to date with any changes in the information which may occur over time and to visit your regional NFIA website for the latest news on business and investment opportunities in the Netherlands (all NFIA website addresses can be found on www.nfia.nl). The inform ation containe d in the se fact she e ts has be e n com pile d with gre at care by the Ne the rlands Fore ign Inve stm e nt Age ncy and is accurate to the be st of its knowle dge at the tim e of com pilation. Howe ve r, this docum e nt is provide d for inform ational purpose s only and no rights can be de rive d from it. Com pile d on 10 April 20 14. WHY INVEST IN HOLLAND? Table of contents Customs Introduction Advantages Dutch Customs 1 3 Customs Introduction Customs as a business issue in the Netherlands is governed by European Union-level (EU) legislation, which means that all customs formalities and procedures are generally the same in all EU Member States. There are variations, however, in a number of practical areas that have been left to the discretion of each Member State. As a result, the approach of national Customs authorities can be different in the various Member States. The Dutch Customs authorities are known for their long term experience with international trade and distribution and their practical and pro-active approach when it concerns the international trade and distribution of product via The Netherlands. The main focus of EU customs law is on (1) the import, movement and manufacture of goods into or within the EU that are not of EU origin, or subject to special customs provisions; (2) on goods for which import formalities have not been fulfilled and (3) on special control and enforcement tasks and responsibilities that are attributed to the Customs authorities in an increasing amount of special legislation in the field of for example the protection of the environment and Intellectual Property rights and the fight against terrorism. In addition, and for the same reasons, goods that leave the Union's territory also require customs monitoring. The various occasions where Dutch Customs involvement is called for will be described. In general, though, dealing with the Customs Authorities is required for the: 1. 2. 3. 4. Import of goods into the free circulation of the EU (direct import); Entrance of goods into the EU territory under a suspension regime; Transport of goods under customs bond (transit); and Export of goods outside of EU territory. In addition, the Customs Authorities play an increasingly important role in the protection of products against counterfeit and piracy, the protection of the environment, enforcement of health legislation and are actively involved in the (international) fight on terrorism and the enforcement of international sanctions imposed by for example the United Nations. Over the last years the Customs authorities have obtained more and more special tasks, capabilities and enforcement tools in this respect. For any transaction drawing the attention of Customs, the goods should, in theory, be physically presented to the Authorities, and a declaration should be submitted. This declaration can be conveyed by means of a prescribed document (Single Administrative Document, or SAD) or electronically. As part of the EU Customs strategy to come to a paperless customs environment, companies are encouraged to update and improve their electronic systems and to file the declarations electronically. In many cases it is already obliged to file customs declarations electronically. For those companies unable to carry out the import formalities themselves (e.g., if there is no presence in the EU), a third party such as a logistics-service provider can be appointed to act on their behalf. In the Netherlands, the logistic gateway to Europe, many specialized companies are providing services in this respect. The declaration must, at a minimum, state who the owner of the goods is (or the person with a similar right), their identification, destination, origin, and whatever other information that will enable the Customs Authorities to determine the amount of duties due (if any). Although there is a long list of information and documentation that should be submitted to the Customs Authorities in order to apply one of the customs regimes, it is in some cases possible to submit information/documentation at a later stage. Upon import, customs duties, import VAT, excise duties, anti-dumping duties and/or agricultural levies may become due. Once all import formalities have been fulfilled, the goods are considered to be in "free circulation", meaning that the goods can in principle be moved throughout the EU without any additional customs interference. It is noted however that certain goods may remain subject to customs formalities due to the special nature or special destination of the goods in question (e.g arms related materials). Upon arrival of products at the EU border, alternative scenarios are also possible. Other than direct importation of the goods into the EU, it is also possible to apply a suspension regime, for example to manufacture or store goods in the EU. During the period of suspension, the Customs Authorities will maintain a certain level of control, either physically, administratively, or a combination of the two. The suspension regime can be ended by placing the goods under another suspension regime, importing the goods, or (re-)exporting them. For goods that are placed under a suspension regime, the levy of customs duties, import VAT, excise duties, anti-dumping duties and/or agricultural levies (all if applicable) will be suspended and can in some cases even be avoided at all. In addition, transport under customs bond, or Transit for short, is a regime allowing goods to be transported to their final destination without the obligation of paying customs duties, import VAT etc. Transit can be used for shipments entering the EU in one Member State but are destined for a customer in another Member State or for shipments to customers that are established outside the EU. For example customers in Russia or Switzerland. Custo m s Intro ductio n page 1 o f 4 The New Computerized Transit System (NCTS) is a European wide system, based upon electronic declaration and processing, that replaced the former, paper based Common Transit system providing better management and control of Community and Common Transit. When free goods leave the EU territory, this is referred to as exportation. When exporting products, specific formalities also need to be complied with. Although the term "export" implies a permanent situation, temporary exports are also possible. This is the case when, for example, further processing is needed and will be performed outside the EU, after which the goods may be re-imported with partial or total customs-duty relief. Custo m s Intro ductio n page 2 o f 4 Advantages Dutch Customs Goods that are brought into the European Union (EU) are, from the time of their entry, subject to Customs supervision. As a result, the company responsible for the goods' presence in the EU is obliged to meet the requirements laid down in the EU customs legislation. These requirements concern, amongst others, the import, storage, transport and export of products. Apart from EU-wide mandated customs procedures, the individual Member States have some leeway in implementing them. The Dutch Customs authorities are known for their practical and pro-active approach towards facilitating international trade and optimizing customs procedures. This fact underlies the Netherlands' preferred status as a country in which to base importing activity. Below, the advantageous aspects of working with Dutch Customs, as attested to by many foreign companies that have chosen the Netherlands, are listed. Cargo handling The Dutch Customs Authorities have a great deal of experience with logistical processes - not surprising in view of the port of Rotterdam's position as the largest in the EU, where huge quantities of cargo arrive daily that need to be handled one way or another. Equally important as a cornerstone of the country's trading and logistical prominence is Amsterdam's Schiphol Airport, a main EU gateway - connected as it is to one of the most extensive road systems in Europe. VAT deferment upon importation: no actual payment of VAT Upon the importation of goods into the Netherlands, customs duties and 21% import VAT are officially due. Unlike most other EU Member States, though, the Dutch have set up a deferment system for VAT under which import VAT is declared on the periodic return but deducted on the same form. As a result, no VAT is actually paid. In principle, solely Dutch entrepreneurs or foreign entrepreneurs with a permanent establishment in the country for VAT purposes qualify for this benefit. However, foreign entrepreneurs not meeting the "permanent establishment" requirement can still benefit from the VAT deferment system if they appoint a fiscal representative for VAT purposes. Beneficial regimes Companies have experiences to have a better chance to obtain Customs licenses for beneficial regimes in The Netherlands than in other EU Member States.. The EU Customs Code prescribes the level of control to be maintained under such regimes (i.e., administrative, physical, or a combination). The Dutch Customs Authorities negotiate the level and manner of their control with the company in question; this often leads to a situation where Customs exerts mainly administrative controls, with a minimum of physical checks. As a result, logistical processes are streamlined in the absence of constant Customs interference. Flexibility The Dutch customs authorities are highly flexible in the interpretation and implementation of customs provisions. Their approach can be described as practical rather than formal, the great advantage of which is obvious to firms seeking to import products into Europe. Dutch Customs is for example often willing to discuss factual situations in English and accept English documentation for their reviews. Proactive attitude of customs authorities The Customs Authorities are willing to discuss "live cases" at a preliminary stage with enterprises that intend to import into the Netherlands ("open communication lines"). Such early communication allows companies to present/explain their specific situations and ascertain whether this scenario is acceptable to Dutch customs up front, as opposed to being hit with costly assessments at a later stage. Preliminary discussions can be arranged with Customs specialists in for example the fields of Customs Valuation and Customs Tariff Classification. Ruling policy; establishing the lowest amount of customs duties due In contrast to other EU Member States, it is relatively easy for entrepreneurs to obtain specific rulings from the Dutch Customs Authorities on, among other issues, customs valuation. An example of a customsvaluation ruling is the "first-sale-for-export scenario." This scheme lets companies use an earlier (lower) transaction value in a chain of transactions for customs-valuation purposes, in effect significantly reducing the customs-duty burden. Advantage s D utch Custo m s page 3 o f 4 Experienced and specialized Customs and Tax officers The Dutch Customs and Tax Authorities have created dedicated teams of specialists. These dedicated teams all work from a centralized place. Specific client coordinators are assigned to individual companies to ensure efficient and adequate communication and interaction between the Authorities and the businesses concerned. In addition, specialist teams are formed on the different subjects of the Customs and Tax legislation (e.g. a national Customs Valuation Team, A Binding Tariff Information Team, a specialist VAT team for foreign companies). In many cases, the officers of the Dutch Customs and Tax authorities are also willing to discuss and communicate with foreign companies in the English language, thus allowing for faster communication. Advantage s D utch Custo m s page 4 o f 4 NFIA worldwide NFIA Europe The Hague | London NFIA North America Washington DC | New York | Boston | Chicago | Atlanta | San Francisco NFIA Japan Tokyo | Osaka NFIA China Shanghai | Beijing | Guangzhou NFIA T aiwan NFIA Korea NFIA India New Delhi | Mumbai NFIA Singapore NFIA Malaysia NFIA Middle East & T urkey Dubai | Tel Aviv | Istanbul NFIA Brazil