Simplified procedure for import VAT in Germany

The Council Directive of the Finance Ministry has unanimously agreed that the VAT calculation process must be made simpler and less bureaucratic. The simplification should lessen the burden on importers and make it more attractive to set up logistics locations in Germany. Currently, the import VAT calculation process means high administrative costs for companies.

Currently, administrative costs are too high for importers

Up until now, the import VAT has been levied by the customs office; however, reimbursements are arranged by the Länder. Having two locations responsible for the taxing procedure means that the entire import VAT must be paid up front. Deductions can then be reimbursed after a tedious process conducted by the Länder. Having to pay the entire VAT up front means high financing expenses and need for more liquidity for importers. This leads to expenses resulting from temporary financing, securities, etc., which would not be necessary with a more efficient taxing procedure.

Other EU countries are setting a good example

In response to an initiative presented by the federal states Hamburg, Bremen, Lower Saxony and Schleswig-Holstein, the Council Directive of the Finance Ministry has unanimously agreed to slim down the import VAT levying process and make it less bureaucratic. There is to be a model which will calculate only the actual VAT. Similar models have already been successfully introduced in several EU countries.

Increase of logistics locations in Germany

Most importantly, simplifying the process of levying import VAT is expected to lead to more logistics locations in Germany – especially in harbors and airports. More attractive conditions will hopefully curtail the outsourcing of work to other countries. Importers should experience a noticeable decrease in expenses, due to the cut in administrative and financing costs. It is neither yet certain exactly when these changes will be implemented nor exactly how they will look.
Porath Customs Agents will be watching how this initiative develops and will keep you informed and up to date. Our experts are here to consult you, should you have any questions concerning customs and import VAT.