Customs representative

What it means

A customs representative handles customs formalities for someone else: a forwarder, a customs agency or an in-house employee with a written authority. What matters is the form of representation, because it decides who owes the customs office.

Under direct representation the agent acts in the name and for the account of the importer, and the importer stays the debtor. Under indirect representation the agent acts in its own name and is liable for the customs debt alongside it. The difference is one clause and the whole duty bill.

A customs representative is not the same as a tax representative or a carrier. It represents the company before customs in customs matters, but it does not file the company’s VAT return or deal with its registration. A foreign importer reselling the goods in Slovakia may need tax representation alongside the customs one.

How it works in practice

Representation is evidenced by a written power of attorney with a defined scope and the EORI number of the represented party. An importer not established in the Union cannot be the declarant for release into free circulation and cannot avoid an indirect representative.

The agent normally works on its own authorisations: the guarantee, deferred payment, the permission for customs transit. It pays the duty and the import VAT for the client and rebills them, which has to be planned into cash flow.

It is worth agreeing with the representative when and in what form it sends the customs decisions. Without them we cannot put the import VAT into the VAT return for the right period, and the company loses the deduction at least for a while, even though the agent has already paid and rebilled the tax.

What to watch out for

Signing a forwarder’s terms without reading the representation clause costs twice. If the customs decision is issued to the agent, the importer has to evidence its import VAT deduction with extra documents, and under indirect representation the agent rebills any additional duty with a mark-up on top.

The representative works with the data the importer provides. An incomplete invoice, a missing proof of origin of the goods or an imprecise description lead to an error in the declaration that falls on the importer, and a forwarder’s general terms usually cap its liability, so compensation from the agent tends to be partial.