Due-date or offsetting model?

An analysis of the (legal) situation of import VAT levying procedures – an event with an interim report.
1 September 2021

In spring 2021, the German Maritime Centre commissioned a study to provide expert analysis of the introduction of the due-date model for the levying of import VAT, which has been in force since December 2020. Under the due-date model, import VAT no longer has to be paid directly to customs authorities upon delivery of the goods but can be paid by the company on the 26th day of the following month.

The study is intended to provide a sound basis for evaluating the due-date model in 2023 by observing the development of the market. The aim is to examine the extent to which procedures for importers and public authorities can be simplified, thus increasing the attractiveness of Germany as a maritime location. The first interim results, which also determine and document the development of the market shares of relevant European locations compared to German locations, were presented today at a specialist event.

To begin with, Prof. Dr. Klaus Harald Holocher (Jade University of Applied Sciences/Department of Maritime and Logistics Studies) explained how the development of logistics chains and the choice of location depend on import VAT regulations. Prof. Dr. Jan Ninnemann (Hanseatic Transport Consultancy) and Dr. Nathalie Harksen (AWB Law) then presented the results of the European comparison so far, the findings from the surveys and the statistical analysis. The study entails a comparison between the tax models in force in Germany and those in European states with relevant seaports (Belgium, France, Greece, Italy, the Netherlands, Poland and Slovenia). Harksen explained that the procedures in Europe were not uniform. In most EU states, an offsetting model linked to the filing of interim VAT returns is in operation, albeit in different forms. “The same law applies throughout the EU; only Germany levies import VAT via a due-date model”, Claus Brandt, managing director of the German Maritime Centre, noted with surprise.

The results of the quantitative analysis and the expert survey show that, based on the figures available for the past few months, neither a positive nor negative effect of the changeover to a new levying system can be discerned, Ninnemann explained. The results of the industry interviews conducted were nevertheless varied and complex. There was near consensus that the discrepancy in competencies for import VAT (federal government) and VAT (federal states) due to Germany’s federal system was seen as a major obstacle to a further development of the changeover.

Following on from the interim results, Willem van der Schalk (a. hartrodt Deutschland GmbH & Co KG) explained that, from the freight forwarder’s point of view, a changeover to the offsetting model was favoured; the due-date model could only be a step towards this model. In the concluding panel discussion, business representatives spoke with representatives from public administration – Iris Kretschmer (Senator for Science and Ports of the Free Hanseatic City of Bremen), Martin von Ivernois (Ministry for Economy and Innovation of the Free and Hanseatic City of Hamburg) and Henning Raddatz (Hamburg Chamber of Commerce) – about the challenges for public administrations and whether the offsetting procedure is also needed in Germany.

Panel members from public administration explained that the due-date model was already a step forward. Revenue and customs authorities are strongly committed to the topic, they said, while also noting the administrative effort and necessary legislative changes connected to the switchover to a new model. They hope that the study will provide strong arguments in favour of the offsetting model, which will highlight the advantages for the federal states. Dr. Hans Fabian Kruse (Nordhandel – Vereinigung Norddeutscher Handelsverbände e.V.) agreed with van der Schalk that businesses want and need the offsetting model – on this point, all the industry associations are in agreement. Henning Raddatz also spoke in favour of introducing the model in order to keep up with the competition; this applies especially to small and medium-sized enterprises.

“I am curious to see how the changeover to the due-date model will affect us over a longer time period and what the surveys on this will look like in six months’ time”, said Katja Leuteritz, ports and infrastructure officer at the German Maritime Centre.

The study is scheduled to be completed and published in summer 2022.

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