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Limited Fiscal Representation

Limited fiscal representation allows goods to be imported into the EU without paying import VAT. This offers a significant liquidity advantage.

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 The video on this page shows how it works (you can continue reading here).

Please watch these videos, as they will give you an overview of the fiscal aspects involved:


The EU VAT system causes a considerable liquidity disadvantage to businesses. This is especially the case when importing goods into the EU. Importing goods by using limited fiscal representation (LFR) prevents this disadvantage.

LFR can be used when goods are imported into one EU member state having been sold to a company in another EU member state. For example, a US company sells goods to a German company and ships them to the harbor in Rotterdam, the Netherlands. Or the US company sells goods to a French company and ships them to the Belgian port of Antwerp.

The goods can be cleared by customs at the EU’s external border. All import duties and other import obligations are fulfilled when the import declaration is made. By using LFR, the import VAT does not have to be paid on the import declaration. Instead, the customs broker, acting as limited fiscal representative, takes over the VAT obligations for the shipment. After the import formalities have been completed, the goods are in free European circulation and can be transported to their destination.

The customs broker transfers the VAT from its VAT account to the VAT account of the buyer in Germany/France. To do so, the broker follows the procedure of an intra-community transaction (ICT) (please watch this video to learn about ICT). An ICT consists of an intra-community delivery and an intra-community acquisition. The broker lists and declares an intra-community delivery at its tax office, using the VAT number of the German/French buyer. The broker will also report the transaction in its monthly statistics declaration. The buyer in Germany/France reports an intra-community acquisition to its tax authorities. If the reports match, the intra-community transaction has been done correctly.

In this way, the importer in Germany or France can import the goods without paying import VAT. If it had imported the goods through a German or French harbor, it would have had to pay the import VAT, which would have been refunded at least one month later.

The ports of Rotterdam and Antwerp are logical places through which to bring goods into the European Union. The possibility of using LFR adds to their competitiveness in comparison to German or French ports.

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