VAT Reverse Charge (BTW Verlegging)

The VAT Reverse Charge settings manage FR7 eligibility verification for import declarations. Borderbolt verifies customer eligibility with Dutch Customs and automatically applies or removes FR7 on declarations.

What is VAT Reverse Charge?

VAT reverse charge (Dutch: BTW Verlegging, also known as FR7) is a mechanism where the liability to pay import VAT shifts to the importer under Article 23 of the Dutch VAT Act. Instead of paying VAT at the border, the importer reports and deducts VAT through their periodic VAT return.

Key Concepts:

• FR7: Dutch customs code for VAT Liable Party (Belastingplichtige)
• Article 23 Permit: Required authorization to use VAT reverse charge
• Eligibility: Customer must have a valid VAT number linked to their EORI and hold an Article 23 permit

Benefits:

• Improves cash flow (no upfront VAT payment at import)
• Reduces administrative burden
• VAT is settled through the periodic VAT return

FR7 Eligibility Verification

How Verification Works

Borderbolt verifies FR7 eligibility by querying Dutch Customs directly. The verification checks two things:

1. Is the customer’s VAT number linked to their EORI? — Confirms the VAT registration is valid and associated with the correct entity
2. Does the customer hold an Article 23 permit? — Confirms the customer is authorized to use VAT reverse charge

Verification Results:

• Eligible: VAT number is linked to EORI and Article 23 permit is granted
• Not Eligible: Either VAT number is not linked or Article 23 permit is not granted
• Pending: Verification has been sent and is awaiting a response from customs
• Unchecked: No verification has been performed yet
• Expired: Previous verification has expired and needs rechecking

Automatic Application

When a customer is verified as eligible, Borderbolt automatically:

• Sets the VAT Liable Party (FR7) on import declarations for that customer
• Fills in the customer’s VAT number on the declaration
• Marks the declaration as having VAT reverse charge applied

When a customer is verified as not eligible, Borderbolt automatically:

• Removes FR7 from any pending import declarations for that customer
• Clears the VAT Liable Party fields

Recheck Interval

Customer eligibility is periodically rechecked to ensure ongoing compliance. Configure how often rechecks occur:

Why Recheck?:

• Article 23 permits can be revoked
• VAT registrations may change
• Ensures ongoing compliance with customs regulations

Verification in the Submit Modal

When submitting an import declaration to customs, the submit modal displays a VAT Reverse Charge (FR7) section. This gives you a clear overview before submission.

Information Displayed

The modal shows the following details:

Live Checking

You can trigger a fresh eligibility check directly from the submit modal:

1. Click the Check now button next to the status badge
2. The status changes to Pending with a spinner
3. The system queries Dutch Customs for the latest eligibility
4. Results are automatically pulled in — no need to refresh or reopen the modal
5. Once the result arrives, all fields update automatically (eligible badge, status, Article 23, warnings)

Mismatch Warnings

The submit modal automatically detects and displays warnings when there are inconsistencies:

• Eligible but FR7 not on declaration: The customer is verified as eligible, but the VAT Liable Party (FR7) is not set on the declaration header. This may indicate FR7 was manually removed or not yet applied.

• Not eligible but FR7 on declaration: The customer is not eligible for VAT reverse charge, but FR7 is set on the declaration. This could lead to incorrect customs communication.

• VAT number mismatch: The VAT number on the declaration does not match the VAT number on the customer card. This could happen if the customer’s VAT number was recently updated.

Confirmation Requirement

Before submitting, you must check the confirmation checkbox:

• If FR7 is applied: “I hereby confirm that VAT Reverse Charge has been correctly applied”
• If FR7 is not applied: “I hereby confirm that VAT Reverse Charge should not be applied”

The submit button is disabled until this confirmation is checked.

Customer Setup

For FR7 verification to work, the customer must have:

1. EORI number — Set in the customer master data
2. VAT number — Set in the customer master data (format: NL123456789B01)

Both fields are required to perform a verification check. Without them, the system cannot query Dutch Customs.

Checking a Customer

You can verify a customer’s FR7 eligibility from:

• Customer card: Click Check now in the VAT Reverse Charge section
• Submit modal: Click Check now next to the status badge when submitting a declaration

Audit Trail

All FR7 verification events are logged for compliance:

Logged Events:

• Verification query sent to customs
• Verification response received (eligible/not eligible)
• FR7 automatically applied to a declaration
• FR7 automatically removed from a declaration
• User triggered a manual check
• User confirmed FR7 status at submission

Logged Information:

• Customer EORI and VAT number
• Timestamp
• Eligibility result and Article 23 status
• Declaration ID (when applicable)
• User who triggered the action

You can view the check history from the customer card’s VAT Reverse Charge section.

Configuration

Updating Settings

1. Navigate to Settings → VAT Reverse Charge
2. Select the recheck interval from the dropdown
3. Changes save automatically

Permissions

To edit VAT reverse charge settings, users must have the Settings permission. This is typically assigned to:

• Admin role
• Manager role

Troubleshooting

Verification Shows “Unchecked”

Problem: Customer has EORI and VAT number but verification status is “Unchecked”.

Solutions:

• Click Check now on the customer card or in the submit modal to trigger a verification
• Ensure the customer has a linked declarant that is properly configured
• Verify that the declarant settings are complete

Verification Stays “Pending”

Problem: Verification was triggered but result never arrives.

Solutions:

• Customs responses can take several minutes — wait and check again
• Verify customs connectivity in Settings → System
• The check may be retried by clicking Check now again after a reasonable waiting period

FR7 Not Applied When Expected

Problem: Customer is eligible but FR7 is not on the declaration.

Solutions:

• Check that verification status is “Verified” (not “Pending” or “Unchecked”)
• Trigger a new check from the submit modal
• If a check was recently completed, the declaration may need to be in New/Draft/Verified status for auto-application
• Verify the customer’s VAT number is correctly entered on the customer card

Mismatch Warning in Submit Modal

Problem: Warning shows VAT number mismatch between customer card and declaration.

Solutions:

• If the customer’s VAT number was recently updated, trigger a new check to sync the declaration
• Review both VAT numbers and confirm which is correct
• The declaration’s VAT number is automatically updated when a new verification result arrives

No Declarant Found

Problem: Check fails with “No declarant found for this customer”.

Solutions:

• Ensure the customer has a linked declarant in the customer settings
• If no specific declarant is linked, at least one declarant must be configured as default
• The declarant must be fully configured for customs communication

Related Configuration

• Customers - Manage customer EORI and VAT numbers
• Company Settings - Set your company details