Cross-border trade between the UK and EU is entering another phase of regulatory change. From January 2026, France will end its Regime 42 one-off fiscal representation system, requiring non-EU importers to register directly for VAT. At the same time, the EU will remove its €150 customs duty exemption for low-value imports. These reforms sit alongside wider digitalisation across customs systems, including stricter data requirements, real-time reporting and automated risk controls.
For exporters and manufacturers in Durham, the effect is practical rather than theoretical. Businesses that previously relied on simplified customs arrangements must now reassess VAT registration, importer of record status and internal compliance processes. Errors can result in delayed shipments, rejected consignments or financial penalties. As different member states apply their own rules on fiscal representation and import procedures, companies trading in multiple EU markets face a more complex landscape.
Understanding when fiscal representation is permitted, and when direct VAT registration is required, is now central to stable EU trade. The following sections outline the main 2026 reforms and the practical adjustments Durham businesses should make to protect continuity and manage risk.
France Ends Regime 42 Fiscal Representation from January 2026
France will end one-off fiscal representation under Regime 42 on 1 January 2026. Until now, non-EU businesses have been able to import goods into France through a temporary fiscal representative, often a freight forwarder, without completing full French VAT registration. From 2026, this arrangement will no longer be available.
UK companies moving goods into France must obtain a French tax identification number and complete VAT registration directly. This creates ongoing reporting and payment obligations. Companies must submit VAT returns in line with French filing schedules and maintain accurate import documentation.
For Durham firms reviewing their compliance structure, expertise in Customs Fiscal Representation for Businesses supports compliance with VAT registration, importer obligations and representation requirements across EU jurisdictions. This clarity is particularly important for companies trading into more than one member state.
The registration process can take several weeks. Delays are possible if documentation is incomplete or authorities request clarification. Businesses that postpone applications risk operational disruption at the start of 2026, with shipments held until VAT registration is confirmed.
French tax authorities are seeking full traceability and direct accountability for import VAT. Temporary arrangements handled entirely by freight forwarders will no longer meet the required standard. Durham exporters should begin preparations well in advance and assign clear responsibility for VAT compliance within their teams.
EU Removes €150 Customs Duty Exemption for Low-Value Imports
Alongside the Regime 42 reform, the EU will remove its €150 customs duty exemption threshold for imports valued under €150. Under the current framework, low-value parcels can enter the EU without attracting customs duties. From 2026, all shipments will be assessed for duty regardless of value.
For Durham businesses selling directly to EU consumers, particularly in e-commerce, this change alters cost structures. Every parcel will require a customs declaration and duty calculation. Administrative handling costs are likely to increase as declarations become mandatory for all consignments.
Companies should calculate how duties will apply to their product categories and assess the cumulative impact across high-volume, low-value shipments. Where margins are narrow, additional duty exposure may affect pricing decisions and profitability.
Advance review of supplier agreements and delivery terms will help clarify who bears responsibility for customs declarations and duty payments. Businesses may also consider whether holding stock within the EU offers greater stability under the new regime.
Direct VAT Registration Requirements Across EU Member States
France’s policy shift reflects a broader tightening across the EU. Many member states increasingly expect non-EU importers to register for VAT directly rather than operating solely through fiscal representatives. While fiscal representation remains available in certain jurisdictions, its scope and conditions differ between countries.
Each member state sets its own registration thresholds, documentation standards and approval timelines under the broader framework of EU VAT registration rules. Durham businesses trading with multiple EU destinations must prepare separate applications where VAT registration is required.
Processing times vary. Some states complete registrations within weeks, while others may take several months. Careful document preparation reduces the likelihood of additional queries and keeps supply chains moving.
It is also important to distinguish between direct and indirect representation models. In some countries, indirect representation can create joint liability for customs debts. In others, the importer retains primary responsibility. Businesses must align their trading arrangements and contractual terms with the correct legal structure.
Once VAT registrations are secured, compliance becomes ongoing. Companies must track filing frequencies, meet payment deadlines and maintain accurate transaction records. Missed returns can lead to penalties or suspension of VAT numbers, which would interrupt EU trade.
Netherlands and Germany Lead Digital Compliance Push
Digitalisation is reshaping customs procedures across the EU. The Netherlands now requires digital customs declarations with real-time data submission for many imports, supported by upgrades to Dutch electronic customs systems. Germany has expanded VAT deferment schemes that are accessible only to businesses holding direct VAT registration and meeting defined compliance standards.
Both countries continue to invest in automated customs systems designed to streamline processing and improve data oversight. This increases the importance of accurate information at the point of declaration. Inconsistent or incomplete data is more likely to trigger automated checks or delays.
Durham businesses trading with the Netherlands or Germany should review whether their existing systems support electronic submission and secure data exchange. Finance and logistics teams may require training to manage evolving reporting standards and platform requirements.
Practical Steps Durham Businesses Should Take Before Mid-2026
Preparation should begin with a structured audit of EU trade activity. Durham businesses need a clear overview of export volumes, destination countries and product classifications under the EU Combined Nomenclature product classification framework. This will identify where direct VAT registration is required and where fiscal representation may still be permitted.
Contracts with freight forwarders and customs agents should be examined carefully. Provisions relating to fiscal representation, importer of record status and VAT settlement may require revision in light of the 2026 reforms.
VAT registration in priority EU markets should be initiated well ahead of implementation deadlines. Each application can take several weeks or longer, depending on the jurisdiction. A phased approach reduces administrative pressure and allows time to resolve queries.
Internal systems must also be reviewed. Companies should ensure they can track VAT liabilities by country, monitor filing deadlines and retain supporting documentation in line with local rules.
Training remains essential. Finance and logistics teams need a working understanding of declaration requirements, digital customs systems and local VAT obligations. Clear internal accountability supports consistent compliance.
European market entry in 2026 will require more structured compliance than in previous years. The end of France’s Regime 42, the removal of the €150 duty threshold and the expansion of digital customs systems mark a clear shift towards direct accountability for VAT and customs obligations. Durham businesses that audit their trade flows, secure timely VAT registrations and strengthen internal systems will be better positioned to manage risk and maintain reliable access to EU markets. Early preparation will determine whether these reforms create disruption or long-term stability.
