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10 June 20242 minute read

Dutch Court of Appeal LFR ruling highlights need to verify location and VAT status of their customers

The Amsterdam Court of Appeal recently ruled that the licence for a limited fiscal representation (LFR) and VAT deferment licence in the Netherlands can be revoked if the interested party does not take any measures to mitigate the risk of VAT fraud.

The company (X) acts as LFR and logistics provider in the Netherlands for a number of Chinese companies supplying goods to EU customers. The Chinese companies do not have any establishment in the EU and needed a LFR.

X cleared non-EU goods for free circulation in the Netherlands and deferred the import VAT by making use of the Dutch VAT deferment scheme. Subsequently, X arranged transport of the goods from the Netherlands to customers located in various EU Member States (except for the UK which was still part of the EU at that time).

X reported intra-community supplies in its own name but on behalf of the Chinese companies in its Dutch VAT return and corresponding EC Sales Lists. In order to claim the 0% VAT rate, it used a UK VAT number of the Chinese companies.

After indications of VAT fraud by the Chinese companies, the tax inspector revoked X’s LFR and VAT deferment licence.

The court found that X should have used a VAT ID number which corresponds to the EU country of arrival of the goods or take sufficient precautions that the Chinese companies reported an intra-community acquisition in that country. Failure to comply with these reporting requirements was sufficient for revoking X’s fiscal representative and VAT deferment licences.


Key takeaway

This judgment highlights once again that suppliers should always verify the location and VAT status of their customer. Using a VAT ID number of a customer which does not correspond to the EU Member State of destination of the goods it ships may result in VAT liabilities.



ECLI:NL:GHAMS:2024:420, Gerechtshof Amsterdam, 22/2407 22/2408