When you import a horse from a third country into your own (or another EU-Member State) with the intention to keep it for an indefinite period of time or to sell it to a third party, your horse is considered as a permanent import. Usually these are the horses that one buys, inherits or acquires from someone abroad.
But permanent imports can also apply to the horses who are returning to Europe or UK (after being exported previously) and the horses belonging to the owners who are relocating.
When importing a horse from a third country, whether you are a EU-citizen or a company based in the EU, the customs authorities (through EHS acting as a customs agent) will impose taxes. These taxes depend on several factors and the origin of the horse(s). Horses coming from non-EU countries (third countries) qualify for different tax settlement rules than the horses originating from EU-countries.
IMPORT FROM ANOTHER EU MEMBER STATE
When buying a horse in another EU-Member State, one has to pay VAT (Value Added Tax). Example: a horse dealer based in Belgium buys a horse from a seller based in France.
- IMPORT FROM ANOTHER EU MEMBER STATE AS A PRIVATE PERSON If you are a private person buying the horse, you will have to pay the amount of VAT due directly to the seller. It should also be mentioned on the commercial invoice. The seller will have to make sure he/she transfers this VAT amount to the local authority. If the seller is also a private person, there is no VAT due at all.
- IMPORT FROM ANOTHER EU MEMBER STATE AS A COMPANY When acting as a company (e.g. professional horse dealer) holding a registered VAT number in the country of the company's residence, one can 'reverse charge' the VAT amount. This means you do not have to pay VAT to the seller of the horse, but you settle this directly with your own national tax authority. Depending the country you live in, local authorities have their own VAT return shemes which are applicable to you and usually you get an immediate refund of the VAT due.
For the two above-mentionned situations, one does not need an assistance of the customs agent since there are no special customs formalities to be completed. However, make sure you are in possession of the original sale invoice, the pasport of the horse and a TRACES (or Intra-EC) health certificate for the journey across the borders. You can either arrange the road transport on your own (car & trailer, van or truck) or you can use a professional equine transport company who have daily or weekly shipments planned. EHS can organize this for you.
When transporting or purchasing horses within the EU borders no import duties nor any other taxes or duties are applied (except the VAT, as explained above).
There is however one exemption for horses that are in the EU on temporary basis and who have not been imported permanently yet (see below).
IMPORT FROM A NON EU-MEMBER STATE (third country)
When importing horses from a non-EU Member State, one will have to rely on an official customs agent to complete all required declarations at the first EU Border Point (i.e. "EU point of entry"). The customs declarations are made based on the commercial invoice.
Depending on the EU Border Point, the breed and gender of your horse, the VAT and Import Duties will have to be paid on the spot prior to your horse entering the EU. Alternatively, the horse can obtain the customs status 'in transit' until arrived to his country of destination where he will complete the import customs procedure. All this might sound quite complex, but rest assured - these formalities are being smoothly completed by your specialized (customs) agent.
You might have understood by now that usually there are two kind of taxes due when entering the EU: VAT and import duties. Let's have a closer look at these.
Whether you act as a private person (individual) or as a business company (holding a valid VAT registration number) both taxes are due. Registered companies can claim the VAT back through their local tax authority, which is not possible for private persons. The percentage of VAT might differ between various EU Member States, although the rate of 21% is applied in most countries. This percentage is calculated not only on the net value of the horse(s), but also on the customs- and shipping charges as well as on the import duties! Make sure you bear this in mind when planning your budget.
Import duties are always due and can never be reclaimed, no matter if you are an individual person or a company. The normal import rate applicable in all EU-countries is 11,5% and is calculated not only on the net invoice value of your horse but also on the customs and shipping costs and other costs related to the import of your horse.
Settlement of both taxes (VAT and import duties) will be arranged through your customs agent - he/she will provide you with a detailed invoice and pay these taxes to the local authority. EHS is a qualified and registrated customs agent who can arrange all this on your behalf. In some cases (depending on the country/place of entry) EHS might be using a subcontractor.
We hope this clarifies things a bit. However... there are still some 'special circumstances' that might apply.
- IMPORT OF BREEDING STOCK: let's suppose you want to import a mare or a stallion from a third country with the purpose of using him/her for breeding. If that horse can be registerered in a Studbook approved by the EU, it is possible to apply a 0% import tax rate under the condition that you keep the horse in your own posession (for breeding) at least during the first year after the importation. Depending on the country you live in, one either gets immediate exemption or you will have pay the normal import duty amount and will have to claim this back at a later stage. Remember this is not applicable to geldings.
- IMPORT VIA FISCAL REPRESENTATION - For businesses only: if your horse arrives at a EU border point in another EU Member State (other then the one your company is registered in) usually the, so called, 'fiscal representation' system is applied. This means that your company designates another company as its fiscal representative (based in the country where your horse first arrives into EU). Your fiscal representative will arrange all formalities with the local customs authority, including settlement of the VAT and import duties. The main advantage is that your company does not have to pre-finance the taxes since your fiscal representative already settled those... and claimed them back at the same time! Even though there is a small extra charge for this service, this takes away the burden of the (often very high) tax amount having to be paid prior to the arrival of your horse.
Important: one can only benefit from this regime when holding a valid VAT-registration number (it is not applicable to private persons).
Example: your Belgian registrated and based company buys a horse in Canada. Your agent arranges the full door-to-door transport, including customs clearance in Amsterdam, the airport through which your horse entered into the EU. The fiscal representation will be applied in Amsterdam on arrival of your horse. Few hours later your horse arrives at his new stable. Your (customs) agent will provide you with a bill for all shipping charges and import duties, however you will not be charged for the VAT on importations. Technically (and for your administration) you are only buying the horse through an intra community acquisition since your fiscal representative has already completed all import formalities, including settlement of the VAT.
- AND WHAT IF I RELOCATE? There is another special regime for people who relocate from a non-EU country into an EU-Member State. This is applicable only in case of an official relocation with change of residency involved (it doesn't apply for example to your daughter returning home after finishing her studies overseas). The relocation will have to be documented with a number of official documents, such as the certificates from a district/local authority or public notary, full inventory, special forms etc. So what is your benefit? In this case you can have full tax exemption (both VAT and import duties) - no matter the gender or breed of your horse. Again, this is an administrative buren that EHS will be happy to assist you with.