Knowledge base

Regime 42, EU import clearance with deferred VAT

What regime 42 is, when it is used and the benefit it brings for import combined with an intra-EU supply.

Regime 42 is an EU import clearance with deferred VAT, goods enter free circulation in one EU country while VAT is settled in the destination country. It is used when import is combined with an intra-EU supply to another member state.

Benefit: no import VAT paid in the clearance country improves cash flow, the buyer settles VAT in the destination country.

It requires meeting formal conditions (e.g. the parties VAT numbers). See customs advisory and customs clearance.

Sources

Related service: Customs

Frequently asked questions

Who settles the VAT in a regime 42 clearance?

The VAT is settled by the buyer in the destination country of the goods, as part of the intra-EU supply settlement. No import VAT is paid in the country of clearance, which improves cash flow for the importer. Duty, where due, is paid normally at clearance. That is the main benefit of regime 42.

What conditions must be met to use regime 42?

The import must be combined with an intra-EU supply of the goods to another member state, and the parties must meet formal conditions, including valid VAT numbers. You also have to show the goods actually left the country of clearance. On errors the authorities can demand VAT in the import country, so the paperwork is kept carefully.

Does regime 42 work when the goods stay in the country of clearance?

No. The condition is an onward intra-EU supply to another member state, where the buyer settles the VAT. If the goods stay in the country of clearance, standard import clearance applies with VAT payable there. The procedure is chosen before the declaration, so the destination of the delivery has to be known upfront.

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