Chambers Wales South East, South West and Mid member Menzies is an independent business advisory and accountancy practice that focuses on optimising clients’ businesses financially, operationally and strategically with sector specialisation and brighter thinking. As VAT and fiscal representation for deliveries into France are set to change from 2026, the firm is advising businesses on the impact on VAT reporting and what the end of Regime 42 means for them.

What is Regime 42?

Regime 42 is a Customs Procedure Code which allows VAT-free imports into France via a limited fiscal representative. The Code allows a VAT-free import and onward VAT-free intra-community delivery to the end customer. By using Regime 42, the seller does not have to register for VAT in France as the VAT is declared in the destination EU member state, making France a favoured gateway for exporters looking to streamline their trade in Europe’s single market.

How will the end of Regime 42 impact businesses?

From 1 January 2026, non-EU businesses such as those from the UK, Norway and Switzerland will no longer be able to use fiscal representatives under Regime 42. The Code is not being abolished completely and limited fiscal representation will still be a choice but this will only be available to EU established companies. The move brings France more in line with how other EU countries operate.

To continue importing goods through France, for onward supply to the EU under Delivery Duty Paid (DDP) terms, UK businesses will need to register for VAT in France and file French VAT returns. Supply chains will also need to be altered to deal with these changes.

What options do businesses have after January 2026?

Welsh and UK businesses could:

• Register for VAT in France and submit French VAT returns, allowing DDP deliveries to continue.
• Reroute deliveries through another EU member state such as Belgium or the Netherlands which still allows limited fiscal representation for non-EU businesses.
• Change an incoterm in order to make the customer the importer into the EU, therefore avoiding a French VAT registration for the UK business. However, this would need to be agreed with customers in advance.

With the new year just around the corner, Menzies’ VAT team recommends that businesses review their position and supply chain and identify what changes need to be made now. The Chamber runs regular international trade training courses for both newcomers to importing and exporting and experienced staff needing a refresher on current requirements and compliance.