Regime 42 UK – Zero VAT Import Procedure Explained

What is Procedure 42 (Regime 42)?

Procedure 42 — known in customs circles as Regime 42 or Customs Procedure Code 42 (CPC 42) — is a special EU customs procedure that allows goods to be exempted from import VAT when entering the EU from a third country.

The mechanism is straightforward in principle: if goods imported into one EU member state are immediately intended for an intra-Community supply (ICS — Intra-Community Supply of Goods) to another EU member state, import VAT in the country of entry is 0%. VAT is only accounted for in the destination country, as an intra-Community acquisition of goods.

Why is this attractive? Because under traditional import procedures, a company must pay import VAT upfront (e.g., 21% in the Netherlands or 19% in Germany) and then wait weeks or months for a refund. Procedure 42 eliminates this problem — VAT is never paid in the country of import, and in the destination country it is accounted for as a VAT-neutral transaction in the VAT return.

Procedure 42 is particularly attractive for Polish companies importing goods from the United Kingdom, as it avoids locking up large sums of VAT at the customs clearance stage.

How Regime 42 works — step by step

To understand Procedure 42, consider a specific scenario. A Polish company wants to import electronics worth €100,000 from a UK supplier. The goods enter the EU through the port of Rotterdam (the Netherlands).

Traditional import (without Procedure 42)

1. Goods arrive in Rotterdam
2. Customs clearance in NL — company pays duty + Dutch VAT 21% = €21,000
3. Goods travel to Poland
4. Company waits for VAT refund from Dutch tax authorities — 3–6 months
5. In the meantime €21,000 is tied up

Import with Procedure 42

1. Goods arrive in Rotterdam
2. Customs clearance in NL with code CPC 42 — company pays duty only, VAT = 0%
3. Goods immediately travel to Poland as an intra-Community supply
4. In Poland the company reports an intra-Community acquisition in the VAT return — input VAT = output VAT (VAT-neutral transaction)
5. Zero capital tied up

Regime 42 after Brexit — the UK → NL → PL scheme

Before Brexit (until 31 December 2020) the United Kingdom was part of the European Union, so UK–Poland trade was intra-Community and required no customs clearance or Procedure 42. Importing from the UK to Poland was as straightforward as buying from Germany.

From 1 January 2021 the United Kingdom is a third country. Every import from the UK to the EU requires customs clearance, duty payment, and — under standard rules — import VAT. This is where Procedure 42 becomes highly valuable.

How the post-Brexit scheme works

Because the UK is not in the EU, Procedure 42 cannot be applied directly at the UK–Poland border. In practice, UK goods enter the EU through Benelux or German ports:

1. UK → Rotterdam (NL) — goods leave the UK and arrive at the port of Rotterdam (alternatively: Antwerp in Belgium or Hamburg in Germany)
2. Customs clearance in NL with CPC 42 — import declaration with procedure code 42. Duty is paid, but VAT = 0%
3. ICS: NL → PL — goods transported to Poland. The NL importer issues an ICS invoice (0% VAT) to the Polish company
4. Intra-Community acquisition in Poland — the Polish company reports the intra-Community acquisition in the VAT-7/JPK return. Input VAT = output VAT

It is worth noting that the same scheme applies to imports from any third country — not just the UK. Companies importing from China, the USA, or Turkey also use Procedure 42 through Benelux ports.

Who can use Procedure 42?

Procedure 42 is not available to everyone. Several conditions must be met:

Formal requirements

• EU VAT registration in the country of import — the company must hold a VAT number in the country where it carries out the import (e.g., a Dutch VAT number if importing via Rotterdam). Alternatively, a fiscal representative can be used.
• EU VAT registration in the destination country — the receiving company must be registered as an EU VAT taxpayer in Poland (or another destination country).
• Active EU VAT numbers — both VAT numbers must be active and visible in the VIES (VAT Information Exchange System). The customs authority verifies this at clearance.
• Goods intended for intra-Community supply — the goods must genuinely be intended for onward intra-Community supply. Procedure 42 cannot be used if the goods are to remain in the country of import.

Who uses it in practice?

• Polish trading companies importing goods from the UK, China, or the USA — with VAT registration in NL/BE or via a fiscal representative
• Freight forwarders and logistics companies handling UK–EU–PL supply chains
• Distributors with a central warehouse in Poland ordering from third-country suppliers
• Corporate groups with subsidiaries in several EU countries — natural cashflow optimisation

Financial benefits — calculation example

Let us see how much can be saved through Procedure 42 with a concrete example. Assume a UK import of €100,000, clearance in the Netherlands, destination country Poland. *Example calculation — indicative figures.*

Scenario A: Standard import (without Procedure 42)

Problem: for 3–6 months you have €21,840 locked up. For regular monthly imports this means a permanent lock-up of over €100,000 working capital.

Scenario B: Import with Procedure 42

Required documents

Correct application of Procedure 42 requires assembling precise documentation. The absence of any document can result in refusal of the 0% VAT rate and imposition of full import VAT.

Documents for customs clearance (CPC 42)

1. Customs declaration with CPC 42 code — import declaration in the import system of the country of entry (e.g., AGS in the Netherlands) with procedure code 4200.
2. EU VAT number of the importer in the entry country — Dutch, Belgian, or German VAT number.
3. EU VAT number of the recipient in the destination country — Polish EU VAT number (format: PL + 10 digits). Must be active in VIES.
4. Commercial invoice — from the UK supplier, with full details of both parties, goods description, value, and delivery terms (Incoterms).
5. Transport document — CMR (road), B/L (sea), or AWB (air), confirming the route UK → NL → PL.
6. Packing list — detailed goods list with weights and dimensions.

Post-clearance documents (proof of intra-Community supply)

1. ICS invoice — issued by the NL-registered entity to the Polish recipient, at 0% VAT with both parties' EU VAT numbers.
2. CMR with delivery confirmation — CMR document signed by the recipient in Poland, confirming physical delivery.
3. Proof of payment — bank transfer confirmation for the goods.
4. EU VAT summary information (EC Sales List) — declaration filed in the country of entry (e.g., Dutch "Opgaaf ICP") reporting the ICS to the Polish buyer.

Risks and what to watch out for

Procedure 42 is a fully legal and widely used tax optimisation mechanism. However, due to its potential for misuse, it is one of the most scrutinised areas by European tax administrations.

Main risks

• No proof of intra-EU transport — if you cannot prove that goods actually left the country of import and reached Poland, the Dutch (or Belgian) tax authority will charge full VAT + interest + penalty. Retain CMR documents, tracking records, and delivery confirmations.
• Inactive EU VAT number — if at the time of clearance your VAT number (importer's or recipient's) is not active in VIES, the customs authority will refuse to apply Procedure 42. Check VAT number status regularly in the VIES system.
• VAT carousel fraud — Procedure 42 has historically been exploited in carousel fraud. Tax authorities pay it particular attention. Honest companies have nothing to fear, but documentation must be impeccable.
• Transport delays — goods should be transported to the destination country "promptly". Prolonged storage in an NL warehouse before dispatch to Poland may raise questions with the tax authority.
• Missing EC Sales List submission — failure to submit or late submission of the EU VAT summary declaration (reporting the intra-Community supply) may result in loss of the 0% rate.

Penalties for incorrect application

If tax authorities challenge the right to use Procedure 42, the consequences can be severe:

• Import VAT assessed — the full amount that should have been paid (e.g., 21% in NL)
• Interest — calculated from the date of import
• Administrative penalties — depending on the country, can reach 100% of unpaid VAT
• Loss of right to Procedure 42 — in extreme cases the company may lose the ability to use this procedure in future

Procedure 42 vs Postponed VAT Accounting (PVA)

Companies often confuse Procedure 42 with Postponed VAT Accounting (PVA). These are two distinct mechanisms:

PVA is a UK mechanism — it applies to imports into the UK. Procedure 42 is an EU mechanism — it applies to imports into the EU. Both serve a similar purpose (avoiding VAT lock-up) but operate in different jurisdictions.

Can Easy Clearance help?

Yes. As a customs broker specialising in UK–EU trade, we handle imports through European ports (Rotterdam, Antwerp, Hamburg) using Procedure 42.

Our service covers:

• Advisory — we will assess whether Procedure 42 is advantageous in your situation and calculate your savings
• Customs clearance with CPC 42 — we lodge the import declaration at the port of entry with the correct procedure code
• Fiscal representative in NL/BE — we arrange a tax representative if you do not have VAT registration in the country of entry
• Complete documentation — we ensure all documents (CMR, ICS invoices, EC Sales Lists) are correct
• Audit support — if questions arise from the Dutch or Belgian tax authority, we help prepare responses and documentation

Procedure 42 is a natural extension of our import clearance service. If you regularly import goods from the UK to Poland, this procedure can deliver significant financial benefits.

Frequently Asked Questions (FAQ)

What exactly is Procedure 42 (Regime 42)?

Procedure 42 is an EU customs procedure that allows goods to be imported from a third country (e.g., the UK) with import VAT exemption, provided the goods are immediately transported to another EU member state via an intra-Community supply. VAT is accounted for in the destination country as an intra-Community acquisition.

Does Procedure 42 work for UK imports after Brexit?

Yes, but indirectly. The UK is now a third country, so UK goods can be imported into the EU (e.g., via Rotterdam) using Procedure 42, and then transported to Poland. Scheme: UK → NL (CPC 42, VAT=0%) → PL (intra-Community acquisition).

How much can I save with Procedure 42?

The saving equals the import VAT that would otherwise be locked up. On a €100,000 import via the Netherlands (VAT 21%) you avoid locking up €21,000. For regular imports the benefit can reach hundreds of thousands of euros per year in freed-up cashflow. *Example calculation — indicative figures.*

Do I need Dutch VAT registration?

Yes, to apply Procedure 42 in NL you need a Dutch VAT number. If you do not have one, you can use a fiscal representative — a NL-registered entity acting on your behalf. The customs broker can arrange this.

What documents are required for Procedure 42?

The key documents are: customs declaration with CPC 42 code, commercial invoice, EU VAT numbers of both importer and recipient, transport document (CMR/B/L), ICS invoice at 0% VAT, and EU VAT EC Sales List. The absence of any document risks full VAT being charged.

Is Procedure 42 legal?

Yes, fully. Procedure 42 is an official EU customs law mechanism, regulated by the Union Customs Code (UCC) and VAT Directive 2006/112/EC. It is widely used across Europe. Correct documentation of the transaction is key.

What happens if the goods do not reach the destination country?

If you cannot prove that goods actually left the country of import and reached Poland, the import country's tax authority (e.g., Dutch) will charge full import VAT + interest + penalty. Transport documents (CMR with delivery confirmation) are therefore absolutely critical.

Can Procedure 42 be used for any type of goods?

As a general rule yes — Procedure 42 covers all goods imported into the EU with intra-Community supply intent. However, there are exceptions for excisable goods (alcohol, tobacco, fuels), which are subject to additional rules. In such cases Procedure 63 applies.

What the current official guidance means in practice

For operational work, the current procedural rules, declaration fields, and conditions should be checked directly against the official guidance. For this topic, the core references are the European Commission (Union Customs Code), the Dutch Belastingdienst, and GOV.UK for UK-side clearance.

Official sources

• European Commission: Customs procedures — EC, 2026-04-13
• Belastingdienst: Customs procedure 42 and 63 — NL Tax Authority, 2026-04-13