Reasons for employing a fiscal representative:
 
1. Speeding up circulation of goods within the EU
Instead of having to undertake several customs clearance procedures in several countries (clearance for transit proce-dures at the customs office of arrival and clearance for free circulation at the customs office of destination) only one cus-toms clearance is necessary, for instance at the customs office in Germany.
 
The alternative, i.e. the placing of goods under community transit procedures at the customs office of arrival, a renewed customs declaration in the country of destination and clearance for free circulation involve higher costs and risks for cus-tomers.
 
2. Simplified procedures for buyers of goods
The buyer of goods receives the goods already customs cleared, has unrestricted use over them and does not have to fill out any customs declarations – contrary to the transfer of goods under transit procedures. He is only liable to declare the usual acquisition VAT (which he is already familiar with from his other activities in EU-countries) directly to his local tax account.
 
3. Liquidity benefits for buyers and vendors
Customs clearance for free circulation by a fiscal representative means that no import turnover tax is due at the arrival of goods in an EU-member state. This exemption from import turnover tax is later adjusted by the imposition of acquisition VAT. The benefit for the buyer and the vendor of goods is that import turnover tax payments do not have to be made immediately, thus there are no payment transactions and control activities necessary. Therefore, buyer and vendor profit from simplified procedures that boost their liquidity.
 
4. Registering in Germany
It is not obligatory to appoint a fiscal representative in Germany. There are, however, only two possibilities. Either, the goods can be moved in an external community transit procedure; alternatively, the buyer or the vendor is Vat registered in Germany. However, by registering in Germany, the buyer or vendor has to fulfill all legal requirements that are applied to the supply of goods within the EU, such as the issue of summary declarations, the annual tax return and the submission of Intrastat Declarations. Obviously, this involves considerable bureaucracy which can be transferred over to a fiscal repre-sentative.
 
5. A simple procedure for buyers and vendors
If buyers and vendors do not want to be VAT-registered in Germany and want to appoint a fiscal representative, the exist-ing requirements to buyers and vendors can be relatively easily met, especially if one compares it to the requirements in other EU-member states. By authorizing a fiscal representative, the vendor has simply to refer to the fiscal representative and his VAT-ID-number as well as to the buyer's VAT-ID-number in his commercial invoice.
 
6. Invoicing for EU-companies free of taxes
The invoicing for fiscal representation to a company registered in an EU-member state can be made free of taxes. This is a considerable advantage in view of the non-deductibility of German VAT.
 
7. Costs
The mandatory payments for customs duties involving fiscal representation are inevitably higher than for normal customs clearance. However, there is no doubt that the advantages for logistics and liquidity and the multiple tasks of a fiscal representative justify this fee.