When goods are imported into the EU, in principle, import VAT has to be paid by the importer of record to the Customs Office at the border. Provided that the importer of record has a full input VAT deduction right, this import VAT can subsequently be recovered through the periodic VAT return of the importer of record. Hence, although recoverable, the import VAT paid at the border creates a prefinancing issue for the importer of record.
In an attempt to attract business from outside the EU, the Belgian authorities have introduced an import VAT deferral system pursuant to Article 211, second paragraph of the VAT Directive. The system was elaborated in a Circular of 1973 and updated through a Circular of 2008. In essence, importers that wanted to benefit from the deferral advantage had to apply for a special licence (the so-called “ET.14000-licence”) from the VAT Office and had to prepay 1/24th of the estimated annual import VAT in the first year that the licence was applied. Furthermore, by 20 April of each following year, the prepayment had to be recalculated, based on the actual import VAT incurred in the preceding year. The actual import VAT amounts had to be reported through Box 57 of the periodic VAT returns.
In an effort to attract more business to Belgium, the government has decided that, starting on 1 January 2013, the mandatory prepayment in relation to the import VAT deferral licence will be abolished, since this created a potential competitive disadvantage towards other EU member states with an import VAT deferral system without mandatory prepayment. The new system has been elaborated in a recently published Circular of 28 September 2012 (n° ET.112.812). In essence, for applications of a new import VAT deferral licence introduced since 1 October 2012, no prepayment would be required.
For existing licences, the prepayment that was established by 20 April 2012 can be claimed back through Box 62 of the periodic VAT return of January 2013 for importers that file monthly VAT returns and through Box 62 of the periodic VAT return of Q1 2013 for importers that file VAT returns on a quarterly basis. As such, the prepayment will thus be offset over time against VAT amounts due by the VAT taxpayer after the introduction of the claim, unless an actual VAT refund request is made through the relevant Box in the VAT return.
Furthermore, before the deadline for filing this VAT return, the VAT taxpayer also has to send a document (of which a model is attached in the Circular) to the relevant VAT Office to inform the VAT authorities of the fact that the prepayment is claimed back through the VAT return. A copy of this document must equally be filed in the Refund Register of the VAT taxpayer. Finally, please note that the right to claim back the prepayment can also be made in any subsequent periodic VAT return after the VAT return of January 2013/Q1 2013, but must in any event be made before the end of the third year following the year in which the refund became available, i.e., before the end of 2016.