Are you licensed to import goods into Greece without paying VAT?

Are you licensed to import goods without paying VAT?

Benefits can lead to more competitive pricing schemes and increase of market share

Picture of Nick Kalofonos

Senior Manager, Tax

KPMG in Greece


Greek VAT legislation provides for a number of ways to import goods in Greece without paying VAT before the customs authorities. One option is to temporarily place goods arriving from non-EU jurisdictions in a free zone (or under other similar regimes), effectively suspending the payment of customs duties and VAT until they are sold locally (if sold abroad, any such payment obligations apply in the respective country of destination). Another option is for Greek businesses to apply for a special VAT exemption certificate, on the basis of which they can customs clear goods imported into Greece by paying only any customs’ duties, as long as they then sell such goods abroad.

In addition to the above, the most favorable alternative allows large foreign businesses (or groups of foreign businesses) importing high volumes into the EU to apply for a license, whereby they can import goods into Greece and customs clear them by paying only the applicable customs duties. Required conditions include that the goods’ value exceeds EUR 250 mil per annum (EUR 100 mil for the first five years) and that at least 90% of such goods are sold abroad.

Although the above conditions seem heavy, they can be more easily met when foreign businesses apply to jointly fall under one license. Besides, although the benefits of the license may appear somewhat similar to those of the special VAT exemption certificate, the license leads to a significant threefold advantage. First, holders incur reduced costs of financing, since they do not pay import VAT when goods enter the EU. Second, permitted domestic sales (i.e. less than 90% of the imported goods’ value) do not include Greek VAT; rather, Greek corporate clients apply the so-called “reverse-charge mechanism”, based on which they do not encounter any cash outflow from a Greek VAT perspective. Third, there is a decreased administrative burden in terms of EU customs formalities, since these are taken care of at one single point of entry into the EU, with goods being subsequently forwarded to EU jurisdictions without passing through customs.

The above benefits can lead to more competitive pricing schemes, with license holders eventually increasing their market share. For this reason, the recent trend is for businesses trading internationally to consider altering their logistics/flows, rendering Greece a hub where non-EU goods are customs cleared without VAT and then forwarded to destinations in or outside of the EU.

At KPMG have extended experience in assisting businesses implement the VAT exemption/ suspension regimes best suiting their particular needs. We can help your business revisit physical flows of goods imported into the EU and assess your eligibility, for example, to obtain the above license. Where eligible, we can further assist to compile the required documentation and submit it to the Greek authorities, ensuring its smooth audit until the license is duly issued.

The question really is… whether you can afford to allow competitors gain a comparative advantage, or whether you want to thrive and become market leaders instead.

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