There are various customs procedures that make it easier for companies to import and export to and from other countries. Customs procedure 42 is currently the most popular customs procedure.<\/p>\n\n\n\n
General principles of customs procedure 42<\/strong><\/h2>\n\n\n\nWhat is customs procedure 42?<\/strong><\/h3>\n\n\n\nUnlike traditional customs procedures, where customs duties and VAT have to be settled when goods reach European Union territory, the customs procedure known as \u201cprocedure 42\u201d allows the company concerned to benefit from an import VAT exemption if certain conditions are observed.<\/p>\n\n\n\n
However, as with other customs systems, goods imports made under procedure 42 are subject to customs clearance procedures. <\/p>\n\n\n\n
Procedure 42 is mainly adopted when an economic operator wishes to import goods from a third country<\/strong> into a European Union member state, using a first European Union member state as a point of entry on European territory. <\/p>\n\n\n\nIt is intended to facilitate customs formalities relating to import operations of VAT-liable parties by allowing them to benefit from a VAT exemption. This exemption applies both at the time of import and upon delivery within the Community. This helps the operator avoid significant cash outflows.<\/p>\n\n\n\n
So, procedure 42 offers the following considerable benefits:<\/p>\n\n\n\n
\n- Import formalities are simplified and costs reduced;<\/li>\n\n\n\n
- No cash outflow upon import of goods on European territory;<\/li>\n\n\n\n
- This procedure represents an alternative to France\u2019s Nouveau Syst\u00e8me de Transit Informatis\u00e9 (New Computerised Transit System \u2013 NSTI). In fact, no transit declaration needs to be made to the relevant administrations.<\/li>\n<\/ul>\n\n\n\n
While this particular procedure confers an undeniable competitive advantage, the benefits it offers are subject to compliance with several conditions of application.<\/p>\n\n\n\n![\"\"](\"https:\/\/www.asd-int.com\/wp-content\/uploads\/2021\/12\/principes-generaux-du-regime-douanier-42-1024x683.jpg\")
General principles of customs procedure 42<\/strong><\/figcaption><\/figure>\n\n\n\nConditions of application of procedure 42<\/strong><\/h3>\n\n\n\nIn order to take advantage of customs procedure 42<\/a>, importers must comply with the following conditions or will not be able to apply preferential origin to their imports:<\/p>\n\n\n\n\n- The country of entry must be a European Union member state;<\/li>\n\n\n\n
- The country of final destination for the goods must be one of the 27 member states of the European Union;<\/li>\n\n\n\n
- The goods must not undergo any interim storage in the member state of entry on European territory or be made available for consumption in this same member state. The customs processes imposed by this procedure envisage that delivery will be made in a different member state to the one where the goods entered the European Union;<\/li>\n\n\n\n
- The goods destined for simultaneous intracommunity delivery must, without exception, be the same as the goods imported with a VAT exemption;<\/li>\n\n\n\n
- Some payment must be made for delivery;<\/li>\n\n\n\n
- The seller must be a taxpayer and act as such; <\/li>\n\n\n\n
- Intracommunity delivery must take place immediately after import<\/strong>. In principle, the only delays allowed are those associated with the trans-shipment of goods;<\/li>\n\n\n\n
- The acquirer of the goods must be identified to the VAT authority. It must provide its identity number to the sender based in a different member state to the import member state.<\/li>\n<\/ul>\n\n\n\n
In addition, in order to benefit from procedure 42, the importer must provide the following information:<\/p>\n\n\n\n
\n- The importer must have a VAT registration number in the country where the goods will undergo customs clearance;<\/li>\n\n\n\n
- A transport document as evidence of intracommunity movements. This must also be enclosed with the D\u00e9claration d\u2019\u00e9changes de biens (Declaration of Exchanges of Goods \u2013 DEB).<\/li>\n<\/ul>\n\n\n\n
Failure to comply with these aspects will expose the importer to possible sanctions. Indeed, if customs obligations are not met, the importer will be subject to a tax adjustment or fines.<\/p>\n\n\n\n
Example of customs procedure 42<\/strong><\/h3>\n\n\n\nThe full advantages of customs procedure 42 become apparent in the case of successive sales operations.<\/strong> If we take, for example, a supplier based in India selling to a company based in France, which then sells the goods on to a client based in Belgium.<\/p>\n\n\n\nSo, the goods start out from India, are imported to France, and are then immediately delivered to Belgium. The French company can use the Indian invoice for customs clearance purposes, then deliver to the Belgian client, who will have no involvement in the import operation.<\/p>\n\n\n\n
This way, thanks to the procedure 42 arrangement, nobody pays VAT.<\/p>\n\n\n\n
Having said this, although customs procedure 42 may be relevant in a given case, it can still prove fairly complicated to implement and comply with the various customs and tax rules. Particularly because states need to cooperate in respect of taxes and customs in order to facilitate checks associated with procedure 42.<\/p>\n\n\n\n
Why use a limited tax agent?<\/strong><\/h2>\n\n\n\n![\"\"](\"https:\/\/www.asd-int.com\/wp-content\/uploads\/2021\/12\/faire-appel-a-un-mandataire-fiscal-ponctuel-1024x683.jpg\")
Using a limited tax agent<\/figcaption><\/figure>\n\n\n\nAs already outlined, companies domiciled in the European Union making imports from a third country, via customs procedure 42, need to be registered for VAT in the country where the goods will undergo customs clearance.<\/p>\n\n\n\n
However, these may be exempted from VAT registration if a limited tax agent is nominated.<\/p>\n\n\n\n
On nominating a limited tax agent, the importer will register the customs operations subject to procedure 42 as well as any intracommunity deliveries under its tax agent\u2019s VAT number<\/strong>. So, these operations will be reported on the latter\u2019s VAT declaration and DEB.<\/p>\n\n\n\nFind out more about our service: limited tax agent in France \u2013 customs procedure 42<\/a><\/p>\n\n\n\nPlease note: if the importing company meets one of the conditions below, it will not be possible to nominate a limited tax agent. <\/p>\n\n\n\n
Unlike traditional customs procedures, where customs duties and VAT have to be settled when goods reach European Union territory, the customs procedure known as \u201cprocedure 42\u201d allows the company concerned to benefit from an import VAT exemption if certain conditions are observed.<\/p>\n\n\n\n
However, as with other customs systems, goods imports made under procedure 42 are subject to customs clearance procedures. <\/p>\n\n\n\n
Procedure 42 is mainly adopted when an economic operator wishes to import goods from a third country<\/strong> into a European Union member state, using a first European Union member state as a point of entry on European territory. <\/p>\n\n\n\n It is intended to facilitate customs formalities relating to import operations of VAT-liable parties by allowing them to benefit from a VAT exemption. This exemption applies both at the time of import and upon delivery within the Community. This helps the operator avoid significant cash outflows.<\/p>\n\n\n\n So, procedure 42 offers the following considerable benefits:<\/p>\n\n\n\n While this particular procedure confers an undeniable competitive advantage, the benefits it offers are subject to compliance with several conditions of application.<\/p>\n\n\n\n In order to take advantage of customs procedure 42<\/a>, importers must comply with the following conditions or will not be able to apply preferential origin to their imports:<\/p>\n\n\n\n In addition, in order to benefit from procedure 42, the importer must provide the following information:<\/p>\n\n\n\n Failure to comply with these aspects will expose the importer to possible sanctions. Indeed, if customs obligations are not met, the importer will be subject to a tax adjustment or fines.<\/p>\n\n\n\n The full advantages of customs procedure 42 become apparent in the case of successive sales operations.<\/strong> If we take, for example, a supplier based in India selling to a company based in France, which then sells the goods on to a client based in Belgium.<\/p>\n\n\n\n So, the goods start out from India, are imported to France, and are then immediately delivered to Belgium. The French company can use the Indian invoice for customs clearance purposes, then deliver to the Belgian client, who will have no involvement in the import operation.<\/p>\n\n\n\n This way, thanks to the procedure 42 arrangement, nobody pays VAT.<\/p>\n\n\n\n Having said this, although customs procedure 42 may be relevant in a given case, it can still prove fairly complicated to implement and comply with the various customs and tax rules. Particularly because states need to cooperate in respect of taxes and customs in order to facilitate checks associated with procedure 42.<\/p>\n\n\n\n As already outlined, companies domiciled in the European Union making imports from a third country, via customs procedure 42, need to be registered for VAT in the country where the goods will undergo customs clearance.<\/p>\n\n\n\n However, these may be exempted from VAT registration if a limited tax agent is nominated.<\/p>\n\n\n\n On nominating a limited tax agent, the importer will register the customs operations subject to procedure 42 as well as any intracommunity deliveries under its tax agent\u2019s VAT number<\/strong>. So, these operations will be reported on the latter\u2019s VAT declaration and DEB.<\/p>\n\n\n\n Find out more about our service: limited tax agent in France \u2013 customs procedure 42<\/a><\/p>\n\n\n\n Please note: if the importing company meets one of the conditions below, it will not be possible to nominate a limited tax agent. <\/p>\n\n\n\n\n
Conditions of application of procedure 42<\/strong><\/h3>\n\n\n\n
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Example of customs procedure 42<\/strong><\/h3>\n\n\n\n
Why use a limited tax agent?<\/strong><\/h2>\n\n\n\n