Ryan GrimshawJan 2, 20267 min read

What the end of Regime 42 means for UK brands and how IFGlobal can help you navigate it

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On 1st January 2026, France abolished the simplified VAT import mechanism known as Regime 42, a move with significant implications for UK businesses using France as a gateway into the EU.

In this article, we explain what’s changing, why it matters for your supply chain, and how our solutions can support your continued cross-border growth.

What Regime 42 was and why it mattered

Regime 42 (Customs Procedure Code 4200) has historically allowed non-EU companies, including many UK brands, to import goods into France and dispatch them onward to other EU destinations without upfront French VAT or the need for a French VAT registration.

This worked by appointing a limited fiscal representative in France to handle VAT on the importer’s behalf. For years, Regime 42 offered:

A VAT-neutral way to enter the EU via France

Cash-flow benefits by deferring VAT until the destination state

A streamlined customs entry point that route planners loved

This made France a popular EU entry gateway for UK exporters and DTC brands selling into the EU.

What’s changing in 2026

From 1st January 2026, France abolished one-off fiscal representation under Regime 42 for non-EU companies.

UK businesses can no longer use a limited fiscal representative’s VAT number to clear goods via Regime 42.

Non-EU importers must register for French VAT in their own name or appoint a full fiscal representative to act on their behalf for VAT and customs reporting.

VAT returns and compliance obligations must be managed directly, or through partners, rather than via a temporary representative.

In short, the simplified path has ended, and a more robust compliance framework is now the norm.

Who will be affected and how

This change primarily affects UK brands that have historically moved their own inventory cross-border from the UK into the EU. For our clients, this has involved storing stock at our Bocholt facility to support EU order fulfilment.

By localising inventory within the EU, these brands have benefited from the free movement of goods across member states, faster delivery times, and reduced fulfilment costs through access to lower intra-EU courier rates.

Additionally, this change impacts brands that have used Regime 42 under Delivered Duty Paid (DDP) terms via France to another EU country to fulfil B2B orders.

Practical compliance options post-Regime 42

The end of Regime 42 is creating operational friction for UK brands shipping goods into the EU, but it doesn’t have to.

At IFGlobal, we’ve spent the past year preparing a compliance-lite pathway designed specifically for UK businesses distributing from our Bocholt fulfilment centre. While there are multiple import structures you could adopt, only one genuinely keeps friction low, avoids unnecessary tax exposure, and protects operational agility.

Below is how each option stacks up, and why Option 1 is the route we lead with for customers using our Bocholt facility.

Option 1.

Low-compliance import model – Limited Fiscal Representation via Netherlands (recommended)

This is the simplest, cleanest and lowest-compliance approach, and the model we recommend for the majority of clients. Under this framework:

Goods are imported via the Netherlands under a compliant structure which involves one of our trusted partners acting in the capacity of Limited Fiscal Representative on your behalf.

The import framework is designed to minimise administrative touchpoints, reduce VAT exposure, and maintain operational fluidity.

Stock is then stored and distributed from our Bocholt fulfilment centre for EU-wide delivery.

You maintain full ownership of your goods without taking on unnecessary regulatory obligations.

Option 2.

Shipping DAP from the UK (not suitable)

Shipping under DAP terms from the UK to Bocholt is not workable for inbound stock movements into the fulfilment centre. This option introduces clearance failures, unpredictable duties at the border, and operational delays, and is therefore not compatible with our clients’ needs.

Option 3.

UK business registers for French VAT

Registering for VAT in France can technically work, however, it comes with a heavy compliance load. Monthly or quarterly submissions, local representation requirements, ongoing returns, and audit risk all make this route increasingly burdensome over time.

While our team at IFGlobal can support the logistics, we do not recommend this as the primary structure for Regime 42 replacement due to the escalating cost and admin associated with this option.

Option 4.

Consignee becomes the Importer of Record (IOR)

This option is not viable for UK brands moving inventory into our Bocholt facility. It places the import burden on the consignee, which is incompatible with inbound stock movements where the consignee is not the end customer. We do not recommend this solution.

Option 5.

UK business creates a Permanent Establishment (PE) in the EU

Forming an EU presence sounds like a clean solution until you factor in corporate taxation, local accounting obligations and the administration overhead of creating and maintaining a foreign entity.

In most cases, this option becomes the most expensive and operationally heavy path. We present it for transparency, but it’s rarely suitable for scaling ecommerce brands.

This model is specifically architected to give UK brands a compliance-lite re-entry path into Europe following the removal of Regime 42, without compromising speed, cost efficiency or customer experience.

How IFGlobal makes this easy for international growth

Choosing the right import structure is only part of the picture. At IFGlobal, we support your entire EU expansion strategy.

Bocholt fulfilment centre (Germany)
European storage, pick/pack, and distribution for DTC and B2B.

Integrated compliance partners
For low-compliance import solutions that eliminate the Regime 42 gap.

Cross-border carrier network
Fully optimised for EU-wide delivery speeds and cost efficiency.

Operational continuity
No interruptions, no unnecessary filings, no barriers to scale.

Let’s talk growth

If you’re planning your 2026 EU strategy, we can walk you through the recommended pathway and assess whether alternative structures apply to your business model. For existing clients, speak with your Account Manager.

If you’re looking for a trusted fulfilment partner, book a discovery call with one of our experts.

Speak with an expert

Frequently asked questions

What exactly was Regime 42, and why has it been abolished? Regime 42 allowed VAT to be deferred on imports entering one EU country and moving immediately to another. France has now removed this mechanism to strengthen tax controls and reduce misuse. For UK brands, this means the old “import into France, move to Germany VAT-free” model is no longer available. New import structures are now required.

What does the end of Regime 42 mean for UK ecommerce businesses? In simple terms, more paperwork and more friction unless you adopt the right structure. The biggest impact is on brands who move bulk stock into the EU for DTC and B2B distribution. Without a replacement model, you risk delays at the border, extra VAT liabilities, and operational bottlenecks. That’s why having a compliant alternative, like IFGlobal’s low-compliance solution, is critical.

Do I need to register for French VAT now? Not necessarily. While French VAT registration is one potential route, it is not the most efficient for most UK brands due to local filing requirements, ongoing admin, and rising compliance costs.

Will I need to set up a company in the EU to keep selling there? No. Creating a Permanent Establishment is a valid but heavy option, and usually unnecessary. It comes with local tax obligations, statutory accounts and significant overheads. For most brands, this is overkill. IFGlobal’s low-compliance model removes the need for EU entity creation.

How does IFGlobal’s recommended low-compliance import model actually work? Our Solutions Partner network manages the import structure into Germany in a way that minimises VAT exposure and removes the need for EU tax registration.

Your goods are imported compliantly into Germany, stored in our Bocholt fulfilment centre, and distributed across the EU. You keep full control of your stock without the administrative load.

Does this model work for both DTC and B2B orders? Yes. Our Bocholt fulfilment centre supports both ecommerce and wholesale distribution. Whether you're shipping 5,000 orders a day or replenishing wholesale partners, the import model remains compliant and scalable.

Can I still ship DAP from the UK into IFGlobal Bocholt? No. DAP does not work for stock movements into a fulfilment centre because duties and VAT are triggered at the border in an unpredictable way. It introduces delays and clearance failures, which is why we do not support this method for inbound inventory.

Does using IFGlobal eliminate all compliance responsibilities? No import structure removes every responsibility, though our recommended solution significantly reduces them. You won’t need to register for French VAT, set up an EU entity, or manage complex filings. Our partner network handles the compliance framework so you can focus on growth.

How fast can IFGlobal help me transition to the new model? Most brands can transition within weeks. Because the structure is already established within our partner ecosystem, setup is quick, predictable and minimally disruptive. If you’re already an IFGlobal customer, the process is even faster.

Ryan Grimshaw

Ryan is Head of Marketing and Communications at IFGlobal, where he leads brand, content, and strategic communications across the I-Koncepts Group portfolio. With a background in creative strategy and growth marketing, Ryan’s focus is on building meaningful connections between brands and their customers through clarity, relevance, and storytelling.

Outside of work, you’ll find Ryan exploring the coast with his English Bull Terrier, Lola, chasing his next big idea (or espresso), or cycling the picturesque trails of the New Forest National Park.