Fiscal Representation

Limited Fiscal Representation

Limited Fiscal Representation (LFR) can only be applied at the import of goods in the EU. In Anywerpen for example goods from the USA enter the EU that are destined for a German importer. The German importer wants the goods to be cleared in Antwerpen. But the German importer does not have a Belgian VAT-number. Because he does not have it, he cannot transfer the VAT to his own bookkeeping according to art. 23 of the Turnover Tax Law.

For a common import the Belgian VAT would be due, which the entrepreneur could later ask back by means of a complicated procedure. To make this simpler the customs agent, who declares the goods for importation, can act as Limited Fiscal Representative for the VAT.

VAT obligations

When using Limited Fiscal Representation, At an import declaration, all import duties and such are due. The VAT obligations however are taken over by the declarant. The customs agent thus becomes responsible and liable for the VAT at import. After the declaration the goods are free. They can now be transported to Germany without customs interference. This makes the logistic process flexible. The customs agent must now deliver the goods in conformity with the VAT-regulation to the German importer. It means that he must meet all obligations that are connected to an Intra-Community Delivery from Belgium  to Germany.


First of all the customs agent must have an authorisation to be able to act as LFR. Usually the German importer provides this authorisation. But it also happens that the seller from the USA gives the authorisation. Then the customs agent must check the VAT-number of the person who bought the goods. The Limited Fiscal Representative must then include the VAT-delivery in the quarterly listing. He must also each month report all necessary data to the statistical authorities. The Limited Fiscal Representative thus acts as if he himself is selling the goods to Germany. To be able to do this the customs agent must have a permit. Moreover, he must give a security. For the tax offices want to be sure that they can collect any due tax from the Limited Fiscal Representative. The liability of the Limited Fiscal Representative limits itself to the VAT on the import transactions. But he is unlimitedly liable. So he also has to pay if an additional VAT tax exceeds the given security.

Acquisition confirmation

The Limited Fiscal Representative wants of course to be in command of his liability. If he can prove that the goods have left the Netherlands, the treasury cannot make him liable. He must therefore meet all the above-mentioned obligations. The delivery to another member state can for example be proved by means of a waybill that was signed at the receipt, such as a CMR. We always send the receiver of the goods an email containing a ‘Acquisition confirmation‘. In this Acquisition confirmation are enumerated the import declarations that are made for the importer in that quarter. By confirming the email (‘signing and returning the Acquisition confirmation’) the receiver confirms having received the goods and that he will include these in his VAT-bookkeeping. For the importer such an Acquisition confirmation is an extra check to see if all consignments are correctly included in the VAT-administration.

ABC transactions

Most business transactions are AB transactions at which seller A sells something to buyer B. But there are also many ABC transactions, at which seller A (from the USA) sells something to B (in Germany) while the goods are delivered to C (in France). This kind of ABC transactions is also possible with Limited Fiscal Representation. Then there are however additional obligations to be met by B and C as well as the Limited Fiscal Representative. But the most important logistic advantage with this kind of transactions is, that after the import declaration, the goods are free and can be transported at random without customs supervision. The adage ‘Logistics leads Customs‘ is then very appropriate.

Delivery in the EU/ Export / Storage

It is also possible that after the importation of the goods in Antwerpen ultimately delivery in Belgium takes place, therefore, to a Belgian entrepreneur. This is possible by applying Belgian VAT Law. But goods can also be exported to countries outside the European Union. The Limited Fiscal Representative must then prove the export by means of an export declaration. The system is ever so flexible that also storage and distribution of goods from Belgium to all possible destinations can take place.

Distribution country

The system of Limited Fiscal Representation is therefore very flexible. Distributors and logistics companies can benefit a lot from it. As Belgium is a Distribution country, the technique of declaring with Limited Fiscal Representation is generally applied. We are a real specialist in this field. But we always stipulate that a good cooperation is required with both the transporter and the importer (and if need be the exporter). Each and everyone have their administrative obligations to meet.

Competitive advantage

In the Belgium the possibility of Limited Fiscal Representation is very flexible which gives Belgium a competitive advantage. If goods for a German importer are directly imported in Germany via Hamburg, the importer must pay import VAT. If he has the same goods cleared via Antwerpen, he does not have to pay import VAT. This gives that importer a large liquidity advantage. Precisely for this liquidity advantage and also for the logistic flexibility, many non-EU companies use our Limited Fiscal Representation.