What is customs procedure 42?
With Customs Procedure 42, a company can be exempt from paying VAT on the transportation of goods, provided that it meets several necessary conditions. Nevertheless, it should be remembered here that we are still obliged to pay customs duty. Procedure 42 has its main application when a businessman wants to bring goods from a third country to the European Union with the help of another EU member country. It should be noted that all these countries must belong to the community. Its main purpose is primarily to streamline all customs formalities for importing VAT-taxable entities by allowing the use of VAT exemption. The exemption is used when importing as well as supplying within the European Union. This allows the operator to avoid cash expenses.
What are the benefits of customs procedure 42?
Let's move on, then, to the benefits offered by the use of customs procedure 42. So here we can talk primarily about:
- simplification of import formalities, as well as reduction of costs;
- the absence of a cash expense when importing goods into the European Union;
- an alternative to the New Computerized Transit System (NCTS). This means that there is no need to submit a transit declaration to the relevant authorities.
The conditions necessary to be met to use the customs procedure 42
As we have already seen, Customs Procedure 42 helps us not only save time, but also money. First of all, it is characterized by the simplification of all formalities for the carriage of goods within the territory of the European Union. However, what conditions must be met in order to use this option? Under customs procedure 42, special regulations are established to determine who can take advantage of it. First of all, it is necessary to meet the following conditions:
- the country from which we want to import the goods must be a member of the European Union;
- the country of final destination must also belong to the States of the European Union community;
- the transported goods must not be stored in the member state of introduction or be released for consumption there. The relevant regulations dictate that the delivery of goods must take place in a European Union country other than the country of entry;
- imported goods within the European Union must be the same as imported goods that are exempt from VAT;
- such supplies must be made for consideration;
- the seller of the imported products must be a taxable entity and declare himself as such a seller;
- the supply must take place immediately after importation;
- the person who purchases such goods should be a registered VAT payer. He or she must provide his or her identification number with a member state that is different from the importing member state.
To qualify for Customs Procedure 42, it is necessary for the importer to show that he has a VAT registration number in the country from which the goods are cleared. In addition, the importing person should have a relevant document that justifies the intra-Community movement. This document must be attached to the Declaration of Exchange of Goods. If the required conditions are not met, the importer may be held liable and fined. Our company has been assisting clients with more complicated procedures for years. If you would like to take advantage of Customs Procedure 42, you are welcome to contact us.