Postponed import VAT Accounting (PVA) improves Importer Cash Flow

Traditionally, importers pay Value Added Tax (VAT) at customs, then reclaim it on their next VAT return, leading to a temporary cash flow deficit. To alleviate this, many countries have implemented Postponed VAT Accounting (PVA).

How PVA Works?

PVA allows VAT-registered businesses to bypass upfront import VAT payments. Instead, they declare the import VAT on their regular VAT return. It’s a reverse charge mechanism, which helps to eliminate the cash flow burden associated with immediate VAT payments at customs.

Countries offering PVA

Several European countries and the UK offer PVA regimes, significantly benefiting importers:

• United Kingdom: Following Brexit, the UK offers optional PVA, enabling businesses to declare and reclaim import VAT on the same return, particularly beneficial for imports from the EU.
• France PVA (Autoliquidation de la TVA à l’import) for all importers since January 1, 2022. Businesses must have a French VAT number and report import VAT on their VAT return.
• Belgium utilizes the “ET 14000 license” for postponed accounting, making it a popular hub for European shipping imports. Businesses must apply for a license to use this system.
• The Netherlands uses the “Article 23 license,” allowing import VAT to be accounted for in the periodic VAT return, making it a favored import gateway into the EU.
• Germany: Unlike the other countries mentioned, Germany generally requires upfront import VAT payments at customs. However, some simplified procedures may be available through fiscal representation or bonded warehouses.

PVA significantly improves cash flow for importers by eliminating the need for immediate VAT payments at customs, streamlining the import process.

You will find below a table for all EU Postponed VAT Accounting

Eurotax can help you with your VAT refund in all EU member states, do not hesitate to contact us or to visit our page here.