Direct offsetting of import VAT against input tax from 1 October 2003

The VAT Act allows VAT-registered businesses the option, from 1 October 2003, to choose between paying the import VAT to the customs authority with subsequent claiming as input tax in the VAT advance return, or by direct cash settlement with the tax office in the VAT advance return.

Prerequisites for cash-free direct settlement

1. The EU debt must go to Article 201 of the Customs Code may have arisen. This corresponds to the normal case. However, if it is, for example, a subsequent correction, an unlawful removal, or withdrawal from customs supervision, then the prerequisites are not met.
   
2. The EU debtor must be a trader within the meaning of Section 2 of the German Value Added Tax Act (UStG). This does not apply to the freight forwarder, as the latter acts solely as an agent and not on their own account. This remains the case even if the freight forwarder is the person liable under customs law. The freight forwarder may nevertheless make use of this provision: with the consent of the relevant trader, the freight forwarder may declare directly at the border, when making the customs declaration, that the trader wishes to make use of the direct settlement option. In the revised Single Administrative Document, the freight forwarder must enter the reference ‘EV’ in field 44 and, in field 8, the trader’s VAT number.
3. Application by the EU import duty debtor
   Direct settlement with the tax office must be requested in the import declaration. In practice, this can lead to problems because it must first be checked whether the import VAT debtor and the person entitled to dispose of the VAT are one and the same, which is not always clarified with sufficient certainty for the freight forwarder.

Practical Implementation / New UVA Forms from October 2003

:: Since the due date for VAT on imports to the tax office is the 15th of the second month following the arising of the VAT debt, the deductible input tax can be directly offset against the import VAT in the corresponding VAT return. This eliminates the financing disadvantage resulting from the previous method of paying import VAT to the customs authorities and then claiming the input tax back from the tax office.

:: What's new?

From October 2003 there will be two new VAT forms: VAT Return Advance 30 and U 31 Annex to the VAT advance return
The direct billing on import VAT U30 is designed as follows:

• The EUSt debtor receives a monthly statement from the customs office, from which the EUSt amounts can be seen. This amount is listed under the code „EU“ to the tax office account automatically (without any action on the part of the taxpayer) charged.
• Under the new reference number 083 are in the UVA (U 30) jeans EUSt-Enter amounts that can be deducted at the time of invoicing. This allows EU VAT to be reclaimed as input tax.
• However, if the ‘normal’ input tax credit is not sufficient to cover the EUSt, the EUSt due must be paid separately under the relevant code (e.g. EU 10/2003):

The till system handles Tax office account (Booking notification) the booking of the Value Added Tax Met €17,000.00, the customs duty is via the ID card in KZ 083 namely compensated, but reduces the VAT amount. In these cases, a Analyse resulting from the UVA Payment load required. If the reverse charge for import VAT is used, the payment liability shown in the VAT return is generally not identical to the resulting payment to the tax office, as is evident from the example above. Whether this form of accounting technique achieves the desired administrative simplification for the treasury and the taxpayer remains to be seen.

• The import VAT paid to the customs office is still to be entered in KZ 061 as input tax.
• The KZ 005, into which uncontrolled foreign sales were previously to be entered, will be abolished from 10/2003.
• The new form U
  levies or for rebooking, offsetting, or repayment.

Image: © dusk - Fotolia