End of regime 42 in France? A look back at a rumor and the new import agent regime

Customs regime 42 allows, when importing goods from a third country, to benefit from an exemption from VAT at the point of entry into the European Union, provided that these goods are immediately shipped to another Member State (import followed by intra-Community delivery)..

The main change lies in the end of the use of ad hoc fiscal representation. Until now, a non-European company could mandate a tax representative in France to use its VAT number and thus facilitate these operations without having to register for French VAT itself.

As of January 1, 2026, this facility will end. Businesses not established in the EU and wishing to continue using regime 42 via France will have to register for VAT in France and have their own French VAT number. This measure is aimed at strengthening control and combating VAT fraud.

This reform will require the companies concerned, in particular those operating under the DDP (Delivered Duty Paid) incoterms, to review their supply chain and their reporting obligations in Europe.

As part of the flows where the goods would finally be shipped to another State of the European Union, they must:

• or consider alternatives such as customs clearance in another Member State where punctual fiscal representation remains possible,
• or to modify their conditions of sale (import by the buyer),
• or register for VAT in France,
• or request the application of a transit regime.

For import flows followed by operations in France, operators will however be able to use an import agent whereas previously, they were required to register for VAT. Operators thus benefit from a new opportunity.

1° What did the ad hoc fiscal representation consist of, which changes the situation of operators under regime 42?  

According to article 289 A of the French Tax Code, a taxable person established in a third country must appoint a tax representative in France when two conditions are met:

• the country of establishment has not concluded a mutual assistance agreement for the recovery of tax claims with France.
• the taxable person carries out transactions subject to VAT in France or is subject to reporting obligations there.

This representative, who acts as an intermediary between the foreign company and the French tax authorities, must meet strict criteria:

• Accreditation: It must be approved in advance by the tax authorities.
• Exclusivity: He is the sole representative for all the transactions carried out in France by the foreign company.
• Joint responsibility: His responsibility is committed in the same way as that of the company he represents. He is jointly and severally liable for the payment of VAT and any penalties.

This general principle of fiscal representation had one notable exception: a form of simplified representation, known as ad hoc fiscal representation.

This simplified system was specifically intended for foreign companies that were not established in the European Union. It allowed them to designate a representative for well-defined transactions, which were exempt from VAT.

This punctual representation was authorized exclusively for the following two cases:

1. Exit from a suspensive regime: When a good left a suspensive customs regime (including a suspensive warehouse) to be immediately exported outside the EU or to be the subject of an exempt intra-Community delivery.
2. Importation followed by intra-Community delivery (Scheme 42): When a good was imported into France and then, immediately after customs clearance, shipped to a customer in another Member State of the European Union.

The objective of this simplified regime was not to impose the heavy and costly constraints of traditional fiscal representation on non-established companies carrying out only occasional transactions in France.

Unlike the single and permanent tax representative, this system offered considerable flexibility. A foreign company could mandate different ad hoc tax representatives during the same year. The choice of the representative could thus be adapted to each operation, according to the logistical itinerary, the mode of transport or the place of customs clearance in France.

In practice, this role was very often performed by Registered Customs Representatives (RDEs), who integrated this tax benefit into their customs clearance services.

To carry out this activity, these representatives were assigned by the administration a VAT number specific to their status as ad hoc tax representatives. In return, they were required to file a quarterly statement summarizing all transactions carried out under this number on behalf of their various foreign customers.

However, over the years, it became clear that this simplified regime was being massively abused and was used as a vehicle for numerous VAT fraud on imports. The flexibility of the system was exploited to make goods avoid taxation when they entered the European market.

Faced with this observation, the legislator decided to repeal the regime of ad hoc fiscal representation for operators established outside the European Union.

To replace it, a new system has been introduced: the “punctual import agent”, governed by stricter rules.

2° The new import agent regime for operators established outside the European Union

1. The scope of the scheme

This text creates a new derogation system that allows a company not established in France to designate an agent to manage its VAT obligations, but within a very restricted and controlled framework.

Provided for in article 289 A bis of the FTC, this representation regime is only possible for companies not established in France or in the European Union AND not identified for VAT in France. The aim is therefore to avoid the VAT registration of a foreign operator concerned.

The text and the decree specify the exact operations for which a warrant is possible. These are exclusively flows related to international trade:

• Imports where VAT is Fully deductible ;
• ‍Exports (sales outside the EU);
• ‍Exits from suspensive regimes (such as customs warehouses) when the good is exported.
• ‍Imports exempt from VAT following a suspensive regime (Community regime (including transit or temporary admission).

It is essential to distinguish the one-time mandatary regime (analyzed above) from another device provided for in article 293 A quater of the French Tax Code.

This last mechanism offers the possibility of designating a person other than the foreign operator (not established in the EU) as liable for import VAT.

The person designated as liable is the person for whose needs the goods are imported and used in France. It is therefore typically the customer or the final recipient of the goods.

This option makes it possible to transfer the responsibility for the payment of import VAT from the foreign seller to the French buyer.

This regime applies regardless of whether the import is subject to VAT or not.

2. The conditions for registering a mandatary

The conditions for becoming a mandatary are drastic and aim to retain only reliable and well-established actors:

• Be a company established and identified for VAT in France for at least one year.
• Have a good tax history (declarations filed and paid on time for your own account).
• Have a written mandate from the foreign company.
• Crucial condition: Have a direct contractual relationship with the goods. The goods must be physically or legally entrusted to him via a contract (sale on consignment, storage, rental, transit, etc.).

The administration therefore seeks to limit this regime to operators who are not only tax representatives but are in direct contact with the goods. The representatives will therefore probably be different operators such as transporters, logisticians or even service providers in charge of the goods.

It should be noted that a foreign operator can appoint several agents: this is explained by the possibility that the operator is not in a position to identify a single operator in connection with the goods for all of its flows.

3. The procedures for registering a mandatary

It is the administrative core of the system. To be recognized, the mandatary must follow a rigorous procedure:

• Obtaining a dedicated VAT number: The agent is assigned a specific VAT number that is separate from his usual number. This number will only be used to report the transactions of its customers. Creating a dedicated VAT number is an extremely powerful control tool. It allows the administration to specifically isolate and monitor these risky flows, without mixing them with the agent's own activity.
• Application file: He must file a complete file with the tax service, including his identity, the list of his foreign customers (principals), a copy of each mandate contract, and a sworn certificate certifying that he meets all legal conditions.
• Adding new customers: For each new client, the agent must submit the information and the mandate contract before carrying out the first transaction for him.

It is therefore necessary to anticipate before importing under this regime. However, the deadline will be much shorter to implement than a VAT registration in France.

4. The liability of the mandatary

The mandatary manages all VAT formalities of his client (declaration, payment, deduction, records): he makes these deposits in the name and on behalf of the client.

Unlike the tax representative, he is not liable on behalf of the foreign company. However, he is jointly and severally responsible for the payment of VAT due by his customer, as well as for late payment penalties and interest. The tax authorities can turn against him in the event of the failure of the foreign company.

5. The obligations of the mandatary

The agent must be clearly identified as such on customs declarations. It is therefore necessary to clearly inform the representative in charge of filing the declaration.

The agent files a single VAT return (under his dedicated VAT number) which groups together the transactions of all his customers for the period in question.

Transparency is imposed on the operator:

• ‍Maintaining a detailed record: The agent must maintain a very accurate electronic register, which must detail for each client and each transaction: the date, the tax base, the amount of VAT (even if exempt), the legal basis for the exemption, etc.
• Fast delivery: This register must be kept for three years and can be sent to the administration within 20 days upon request.

These measures create an audit trail: the administration can, at any time, require a detailed view of the agent's activity and check the consistency between customs declarations, the register and the VAT return. The very short period of 20 days requires impeccable record keeping in real time.

‍6. End of mandate

The decree specifies how the mandate can end:

• At the request of the parties: The mandatary or his client may end it at any time by informing the administration.
• At the initiative of the administration: The administration can revoke the status of mandatary if it no longer meets the conditions, breaches its obligations, or — crucially — if it has reason to suspect fraud.

3° What should you remember for regime 42?

Regime 42 does not disappear on January 1, 2026.

However, operators not established in the European Union who would choose to transport goods from France to other Member States will have to prefer a transit regime.

To simplify matters, operators outside the EU will now be able to avoid VAT registrations in France simply because they are imported into France. The mandatary regime will allow them to designate:

• the manufacturer, for example as an importer, including in cases where the goods are not intended to be re-shipped outside the European Union but resold on French soil;
• or to provide that a carrier or logistician will act as an agent for DDP import flows for the benefit of taxable customers established in France (transaction subject to the reverse charge mechanism).

In the absence of application of these regimes (transit or agent), foreign operators would find themselves having to register for VAT in France with, if necessary, a tax representative. The costs and the delay would therefore be greater.

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