GERMANY CLEARS THE WAY FOR IMPORT VAT REFORM
The Conference of Finance Ministers in Germany has spoken out in favour of introducing a settlement model for import VAT, clearing the way for a reform the German economy has demanded for many years. Until now, companies have had to pay import VAT to customs upon import, even though they could subsequently claim it back as input tax. This has tied up liquidity and made the processing of imports more costly. In many other EU member states, import VAT has long been chargeable directly, without this upfront cash burden.
With the introduction of the settlement model, companies would no longer have to pre-finance import VAT. This would remove a significant competitive disadvantage for Germany as a logistics location and create incentives to handle more imports via German seaports and airports. For freight forwarders, it would also eliminate the risk of having to bear import VAT they had already paid on behalf of an importer that subsequently becomes insolvent.
The settlement model is to be introduced on 1 January 2030. The federal and state governments must now swiftly put in place the necessary legal and technical conditions to implement the reform. The decision marks an important success for CLECAT member DSLV and the broader coalition of logistics and business associations that has campaigned for years to modernise the procedure.