If you are considering the question of which country is advantageous from a tax point of view to import goods into the European Union, then you need to consider in particular which country a fiscal representative is required and how VAT is charged on imports into the EU. In both aspects, the Czech Republic is an ideal choice.

Fiscal representative – what is it and where is it mandatory

If your company is established in a country outside the European Union and plans to import goods into Europe, it must appoint a so-called fiscal representative in some EU countries, which usually increases the costs of related compliance. This representative then files VAT returns on behalf of the importing company and pays the applicable VAT, resolves tax audits and disputes with the local tax authority, with which it also communicates. In some cases, it is also responsible for the payment of all tax obligations.

Countries that require a tax representative (for non-EU companies) are Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, Estonia, Greece, Hungary, Italy, Poland, Portugal, Romania, Slovenia, Finland, Spain, Malta and Sweden.

On the other hand, countries that do not require a tax representative and can therefore register directly are Germany, Ireland, Luxembourg (however, the authorities may require bank guarantees), Lithuania, the Czech Republic and Slovakia.

Specific conditions are then set by countries such as France and the Netherlands.

General vs. limited tax representative

With general tax representation, the tax representative takes full responsibility for all your VAT obligations, making it a more comprehensive but potentially more expensive solution.

Many tax consultancy firms do not offer this service due to the risks involved. If so, you should expect significantly higher fees for the advisory services provided than for a limited fiscal representative who purely handles tax matters without being liable for any tax debts. From this point of view, it is therefore more advantageous to choose a country where a general fiscal representative is not required.

Import VAT

If goods are imported into an EU country, they are cleared and released for free circulation. Following this, there are two basic models for how import tax is collected:

• It is paid by the importer at the time of customs clearance. A tax return is then filed in which the importer requests a refund of this import VAT. If the legal conditions for a refund are met, the local tax office will refund the import VAT with a certain delay.
• The importer does not pay the tax upon import, but reports the import in his tax return in the so-called reverse-charge regime. This practically means that the importer declares the tax and at the same time applies the so-called right to deduction / refund. In fact, he does not pay the import VAT if he meets the legal conditions for tax refund. This does not put him at any financial disadvantage.

Currently, the second - more advantageous - model is preferred in most EU countries.

However, if we also take into account the obligation of a fiscal representative, which countries are the most suitable for importing into the EU?

The most advantageous EU countries for importing

As mentioned above, the countries that do not require either a fiscal representative or a bank guarantee are Germany, Ireland, Luxembourg (however, the authorities may require a bank guarantee), Lithuania, the Czech Republic and Slovakia.

If we also take into account the advantageous regime for import tax, then the group of these countries narrows down to the Czech Republic and Lithuania.

Since the Czech Republic is located right in the heart of Europe, has extensive storage and logistics parks, friendly prices and transport connections to Germany, Austria and Poland, it is, in our opinion, the best country for importing goods from third countries.

If you are interested in other services in this area - whether directly VAT registration, EORI number or consultation, do not hesitate to contact us.