What is customs procedure 42?
Customs procedure 42 is a mechanism that an EU importer can use to obtain a VAT exemption. It is applied when goods imported from outside the EU into a Member State will be transported to another EU Member State. In such cases, the VAT is due in the latter – the Member State of destination.
The customs procedure 42 consists of two parts:
- the importation of the goods from a non-EU State to a Member State 1, which is VAT exempt; and
- the subsequent intra-Community supply of the goods from Member State 1 to Member State 2, which is taxed at a 0% VAT rate.
Consequently, the import of goods to Member State 1 (country of import) is VAT neutral.
Source Customs Clearance
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