In Germany and the other EU member states, value added tax (VAT) is levied on the import of goods from third countries. According to the provisions of European VAT law, the respective member states determine how traders pay VAT on the import of economic goods (import VAT).
Import VAT is a consumption tax and an import duty in the sense of customs law; thus, the regulations for customs duties apply correspondingly (§ 21 Value Added Tax Act). In principle, a customs liability on imported goods arises when goods subject to import duty are released for free circulation. The customs liability is incurred at the time the relevant customs declaration is accepted. In Germany, the assessment and collection of import VAT is undertaken by the (Federal) Customs Administration, while the offsetting of import VAT as input tax is carried out by the tax authorities in the German states.
Until 30 November 2020, the import VAT had to be paid to the customs administration by the 16th of the following month when using the deferred payment method also applied to customs duties. On 1 December 2020, the procedure for collecting import VAT was changed. Since then, the due-date model has applied. For goods from a third country, import VAT no longer has to be paid directly to customs upon delivery of the goods (when using a deferral account). The due date has been extended to the 26th day of the second month following import.
The study presented today shows that, in the opinion of market players, the import VAT collection procedures applied by Germany limit its competitiveness as a port and logistics location compared to many other European countries. It ties up liquidity and thus increases costs for importers.
The European VAT system directive allows EU member states to not require the import VAT to be paid at the time of import. In such a case, the import VAT is not paid when the goods enter the European Union’s economic space but as part of the VAT declaration. This offsetting method preserves the liquidity of the taxpaying entities.
Traders would not have to pay the VAT to the customs administration but would offset it as part of their regular advance VAT declaration. The so-called offsetting model made possible by the EU directive is already used today by the majority of EU member states. This gives them a competitive advantage over Germany as a logistics location.
The authors of the study make the following recommendations for action, among others:
• Make use of the EU framework and push ahead with the introduction of a collection procedure based on offsetting in advance VAT declarations.
• Draw on the experience of neighbouring European countries (the procedures used in France, Belgium and the Netherlands provide a possible example).
• Develop and implement a German model of direct offsetting of import VAT.
• Actively support the changeover process and provide guidance via communication and education strategies
• In the transition phase: Simplify the conditions for and access to the due-date model; lower the hurdles for deferral accounts and make them available to everyone; actively promote the use of deferral accounts.
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Claus Brandt (managing director of the German Maritime Centre) said: “The study, prepared for the German Maritime Centre, has shown that importing economic goods to Germany imposes a higher liquidity burden on companies than importing to other countries in an EU comparison.” This is a competitive disadvantage for Germany as a business location.
Runa Jörgens (head of issues and projects, shipping officer of the German Maritime Centre) said : “The study shows very well that the German due-date model is almost unique in Europe. In order to reduce bureaucracy and to support Germany as a business location (keyword: competitive disadvantage), the recommendations of the study should be taken into account and the so-called offsetting model should be introduced promptly.”
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German Maritime Centre
Dr. Regine Klose-Wolf
Head of communication
Hermann-Blohm-Str. 3
20457 Hamburg
+49 40 9999 698 -51
+49 1590 189 1929
Klose-Wolf(at)dmz-maritim.de