Trading activities like import and export into Europe require a VAT registration and various reports. VAT is a type of tax that is applied in the European Union.
According to the European Union regulations, companies must have some type of establishment within the European Union to avoid customs.
Fiscal representation is a service in which a company represents the business they want to import their products in EU. With this representation, CAPLINQ helps your brand to establish itself in the EU in an easier and a competitive way. Also, we take care of every VAT return and clear the returns by submitting the Intrastat European Sales statements.
There are two types of Fiscal Representation: General and Limited.
Dig-in to know the differences between CAPLINQ’s Limited and General Fiscal Representation service.
The Limited representation allows your goods to move freely within EU, while General Fiscal Representation takes account of all your VAT duties.
- LFR is used when goods come into one EU state and have been sold to a company in another EU member state. And, GFR is used whenever you buy goods from another EU member state.
- In LFR, your goods get freely imported into the European Union. The LFR representative is limited to act on behalf of the foreign company for the import without paying the import VAT.
While in GFR — the representative has to take over the Vat duties. There is a long-term agreement between the foreign supplier and the representative. A VAT number is requested for the supplier, and then all the transactions go through this license.
- General Fiscal Representation is for a logistics contract, and Limited Fiscal Representation is best for activities like air and sea freight.
- With the Limited service, we can only act as a fiscal agent, but with the General one, a representative takes away all your duties.
- If your business requires an LFR service, you need to have Dutch representative along with a Dutch VAT number.
But if you take a GFR, the supplier does not need to know Dutch VAT rules as the General Representative already knows the rules. The supplier only needs to know how to apply import deferment system to deliver interest benefits and cash flow.
To learn more regarding which fiscal representation will suit your business, visit www.caplinq.com. You can also contact us if you have questions regarding the CAPLINQ’s order fulfillment services.