Poland has an extensive network of airports, several seaports and a long external EU border with Ukraine and Belarus, making it an ideal place to import goods that are destined for other EU member states. By using customs procedure 42, it is possible to avoid the cost of VAT on importing goods in such cases.

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Typically, when releasing goods under customs procedure 40, the importer first pays the amount of VAT due on the import, which he can later deduct as his input VAT in connection with the transfer of the imported goods to another EU country in the framework of an intra-Community supply of goods (ICS). Using the customs procedure 42 in this situation makes the importation exempt from VAT (the importer only covers any customs debt). Thanks to this procedure, only customs clearance is realized in Poland whereas VAT settlement is shifted to the EU country where the goods go after importation - the final recipient recognizes the intra-Community acquisition of goods (ICA) in this country.

What is particularly important, using the customs procedure 42 in Poland does not require registering in our country for VAT purposes. Entrepreneurs from other EU countries can sign an agreement with a Polish tax representative for VAT purposes. Such representative will settle the import of goods under customs procedure 42 on behalf of its foreign client, and then report ICS in Poland to another EU country, where the foreign entrepreneur will receive the imported goods and settle ICA on his own.

In order to use the customs procedure 42, certain additional requirements need to be met and special codes in the customs declaration need to be used. However, for many importers it is an attractive instrument allowing to improve liquidity due to avoiding the burden of VAT on imported goods. If you would be interested in discussing the possibility of using this procedure in your business - feel free to contact us.