France is ending a VAT simplification that's been used by international businesses for decades. From 1 January 2026, the simplified "one-off" fiscal representation mechanism under Customs Procedure 42 (Regime 42) will no longer be available to non-EU importers. If you're a UK, US, Asian, or other non-EU business importing through France, this change will directly affect how you operate. This guide explains what's changing and what it means for your business.
Regime 42, officially known as Customs Procedure Code 4200 (CPC 42 00), has been one of France's most important VAT simplification mechanisms for international trade. For decades, this procedure allowed businesses to import goods into France from outside the European Union and immediately dispatch them to another EU member state without paying import VAT at the French border.
Instead of paying VAT upfront in France, the VAT liability transferred to the final destination country where the goods were consumed. This created significant cash flow advantages and made France an attractive entry point into the EU market.
Under the traditional Regime 42 system, a typical transaction would work like this:
A UK-based company sells goods to a customer in Germany. The company imports the goods through a French port, clears customs under Regime 42, and transports the goods directly to Germany. Instead of paying import VAT in France, the VAT obligation is accounted for in Germany through the reverse charge mechanism.
This was made possible through a system called "limited fiscal representation" or "one-off fiscal representation" (représentation fiscale ponctuelle). Non-EU businesses could appoint a fiscal representative in France who would use their own French VAT number for the customs declaration, handling the administrative requirements without the foreign business needing to register for VAT in France.
The French Finance Act 2025 introduces fundamental changes to how non-EU businesses can use Regime 42. The key change is the abolition of the one-off fiscal representation system that made Regime 42 accessible without French VAT registration.
From January 1, 2026, non-EU businesses will no longer be able to use a third party's French VAT number for imports under Regime 42. The one-off fiscal representation arrangement, outlined in Article 289 A III of the French General Tax Code, is being repealed.
This change was originally scheduled for January 1, 2025, but the French tax authorities granted an exceptional extension through a ruling published on May 14, 2025, pushing the implementation date to December 31, 2025. This extension provided businesses with additional time to prepare for the new requirements.
Non-EU Businesses (UK, Norway, Switzerland, United States, Asia, etc.)
These businesses face the most significant impact. To continue importing through France under Regime 42, you must now:
EU-Established Businesses
If your business is established within the EU, the changes to Regime 42 do not directly affect you. The procedure remains available under normal intra-EU VAT rules. However, you may still need French VAT registration if you:
The French government has several objectives behind this reform:
Strengthening VAT Control
The simplified one-off representation system made it difficult for authorities to track and verify VAT compliance, creating opportunities for fraud and underreporting.
Alignment with EU Anti-Fraud Measures
France is aligning its procedures with broader EU efforts to increase transparency and ensure businesses pay VAT where economic value is created.
Administrative Clarity
The new system establishes clearer lines of responsibility and accountability for VAT obligations, making enforcement more straightforward.
The Reality: The customs procedure itself remains in place. What's being abolished is the simplified version that allowed non-EU importers to use it without French VAT registration. EU businesses can continue using Regime 42 under normal intra-EU rules.
The Reality: Only non-EU businesses require fiscal representatives. Additionally, businesses based in countries that have mutual assistance agreements with France for tax recovery may register directly without appointing a fiscal representative. These countries currently include Australia, India, Iceland, Japan, Mexico, New Zealand, Norway, South Korea, and South Africa.
The Reality: France operates an automatic import VAT reverse charge mechanism. When you import goods and hold a French VAT number, the import VAT is declared and simultaneously deducted on the same VAT return. This means there's no cash flow impact—you're not required to pay the VAT upfront and wait for a refund. The VAT is essentially self-liquidating on your return.
Since January 1, 2022, France has operated a mandatory reverse charge system for all imports. This is similar to the UK's Postponed VAT Accounting system and provides significant advantages:
How It Works:
Your French VAT return deadline is extended to the 24th of each month for businesses making imports, giving you time to review the pre-filled customs data and make any necessary corrections.
While Regime 42 refers specifically to customs procedure 4200, it's important to understand both options:
Customs Procedure 4000 (CP 4000)
Release for free circulation with import VAT declaration. Under this procedure, you import goods into France and declare the import VAT, which is then subject to the reverse charge mechanism.
Customs Procedure 4200 (CP 4200 / Regime 42)
Release for free circulation with VAT exemption, subject to an intra-EU supply. This procedure exempts import VAT when goods are immediately dispatched to another EU country, essentially treating the transaction as occurring in the destination country.
Under the new rules, many tax advisors recommend using CP 4000 rather than CP 4200, even though both remain available. The reason is that CP 4200 involves suspended VAT, which is more sensitive from a compliance perspective and receives greater scrutiny from customs and tax authorities.
Online retailers using France as an EU distribution hub will need to reassess their fulfillment strategies. If you store inventory in France for dispatch to customers across the EU, you'll now need French VAT registration regardless of where your business is established.
3PL companies managing warehousing and distribution for non-EU clients must ensure their clients understand the new registration requirements. Many 3PLs previously facilitated Regime 42 arrangements, and these relationships will need restructuring.
Service providers who previously acted as one-off fiscal representatives will need to transition clients either to the new import agent scheme (discussed in our compliance guide) or help them secure their own French VAT registration.
Manufacturers and distributors selling to business customers across the EU may need to reconsider their fulfillment models, especially if they've been using France as a consolidation point before onward distribution.
The elimination of simplified access to Regime 42 may shift trade patterns. The Netherlands and Belgium offer alternative VAT deferment schemes that provide similar cash flow advantages:
The Netherlands: Article 23 Licence
Dutch importers can apply for an Article 23 licence, which allows import VAT to be declared on the VAT return rather than paid at customs. The Netherlands has long been popular for its progressive approach to import VAT deferment.
Belgium: ET 14000 Authorisation
Belgium's ET 14000 scheme enables postponement of import VAT, with the VAT accounted for through regular VAT returns. Belgium has recently enhanced this scheme to remain competitive.
Both countries require fiscal representation for non-EU businesses but offer efficient, cash-flow-friendly alternatives to importing through France.
May 14, 2025
French tax authorities publish ruling (BOI-RES-TVA-000207) granting extension of limited fiscal representation until December 31, 2025.
December 31, 2025
Final day that one-off fiscal representation remains valid for Regime 42 imports.
January 1, 2026
New rules take effect. Non-EU businesses must have their own French VAT registration or import agent arrangement in place.
If you currently import goods through France using Regime 42, the key question is whether this trade route remains optimal for your business. Consider:
The French authorities designed these changes to create a more transparent, controlled VAT environment. While this adds compliance requirements for non-EU businesses, the reverse charge mechanism means cash flow impact is minimal for businesses with full VAT recovery rights.
