France has announced that from January 2026 it will withdraw Regime 42 for goods moved via “one-off fiscal representation”. This is not an immediately recognisable customs procedure to many, but the change to Regime 42 will significantly impact how many firms exporting to the EU handle VAT payments – especially those that deliver DDP (Delivered Duty Paid).
What is Regime 42?
Regime 42, or ‘customs procedure code 42.00’, to give it its official name, covers onward supply relief for VAT, which enables the deferment of VAT payment on goods being imported into one member state of the EU which are destined for a consignee in another member state.
In other words, goods from a third country, like the UK, can enter the EU through a member state, like France, without VAT being collected at the border, provided they are destined for onward sale to another EU member state within 30 days.
Why Regime 42?
Many customs intermediaries and freight forwarders hailed Regime 42 as the ‘solution to Brexit’, especially for businesses exporting their goods via France under Delivered Duty Paid (DDP) Incoterms.
The DDP Incoterm places maximum responsibility on the seller. This can make the seller’s products more appealing to overseas buyers, but it makes the exporter responsible for paying import customs duties and VAT.
However, combined with Regime 42, the VAT responsibility is deferred to the customer in the country of destination, and treated as an intra-community supply. This means that the importer should account for it as an acquisition tax on their VAT return.
Why Stop Regime 42?
The European Court of Auditors published the results of an investigation into VAT fraud on imported goods, finding that flaws in simplified import customs procedures, like Regime 42, were largely responsible.
It found “gaps and inconsistencies in the EU regulatory framework” around VAT collection, noting “serious weaknesses” in how member states ensure the correct amount of VAT is collected.
These weaknesses were exploited to the cost of €89bn in lost EU tax revenue in 2022, with the European Court of Auditors naming lost VAT on imports as “one of the main types of cross-border VAT fraud affecting the fiscal policies and public finances of the EU” in its assessment.
In order to prevent both large and small-scale abuses of the regime, the European Court of Auditors recommended that the European Commission propose changes to the regulatory framework to ensure a more “consistent application… across member states”.
Closing the VAT ‘loophole’
France has taken up this recommendation and is changing its law to tighten the restriction on use of Regime 42.
From January 2026, “one-off fiscal representation (représentation fiscale ponctuelle)” for non-EU imports will no longer be permitted meaning that customs representatives will no longer be able to use their own VAT number to act as a one-off fiscal representative for imports under Regime 42 on behalf of companies not established in the EU.
Traders will need to register for their own French VAT and file their own VAT returns to continue to benefit from Regime 42 or consider delivering under DAP Incoterms instead.
Implications for exporters
For non-EU firms looking to bring goods to the EU via France using DDP, the conditions for doing so will now be more demanding.
While Regime 42 is still available for imports into France that are then moved to another member state, non-EU businesses can no longer bypass French VAT registration via one‐off representation.
Non-EU importers must take on VAT and fiscal obligations directly or via a qualified representative.
This means either registering for VAT in France or using an EU importer of record – there are an increasing number of companies offering this service.
DDP and accountability
The removal of Regime 42 should be taken as an opportunity to review the advisability of DDP which carries a significant compliance risk for the exporter because you can’t control whether the customer self-accounts for VAT in the destination country.
So if the customer fails to pay, you or your fiscal representative may be liable for VAT penalties.
The authorities may hold the declarant or representative liable for suspended VAT in the event that the customer’s VAT number is invalid or expired, if they fail to account for the acquisition or incorrect details are entered on the customs declaration. This is despite Regime 42 hinging on the assumption that the customer will properly declare the VAT in their country.