Procedure 42 is the release of a machine for free circulation in one EU country combined with a VAT exemption, because an exempt intra-Community supply or a transfer to another Member State follows immediately. Duty is paid as normal. The tax is accounted for in the country of destination, not at the border.
What the rule actually says
Article 143(1)(d) exempts the importation of goods dispatched or transported from a third country into a Member State other than that in which the dispatch or transport ends, where the supply of those goods by the importer is exempt under Article 138. In other words, the exemption at import is bolted onto the exemption for the intra-Community supply. If the second falls, so does the first. That is the whole mechanism, and it is also the source of most of the trouble.
Conditions that must be met on clearance day
Article 143(2) requires the importer to provide the competent authorities of the country of importation with at least three things at the time of importation. First, the importer's own VAT identification number issued in the country of importation, or the number of a tax representative liable for payment of the VAT, issued in that country. Second, the VAT identification number of the customer to whom the goods are supplied, issued in another Member State, or the importer's own number issued where the dispatch or transport ends when the goods are subject to a transfer. Third, evidence that the imported goods are intended to be transported or dispatched from the country of importation to another Member State, though Member States may allow that evidence to be produced only on request.
Why this matters for an auction machine
The usual set-up looks like this: a Polish company buys a machine at an English auction and wants it at home. There are not two parties here, only one, so there is no classic intra-Community supply. Instead there is a transfer of the importer's own goods under Article 138(2)(c) of the directive. The declaration then carries the buyer's own Polish VAT identification number as the number in the country where transport ends, and in Poland the buyer reports an intra-Community acquisition. This works, but it requires the buyer to be registered for intra-Community transactions on both legs of the operation, not merely domestically.
The reporting duty and what happens if you miss it
This is the point that most often slips. Article 138(1a) of the directive states plainly that the exemption does not apply where the supplier has not complied with the obligation in Articles 262 and 263 to submit a recapitulative statement, or where the statement submitted does not set out the correct information concerning that supply, unless the supplier can duly justify the shortcoming to the satisfaction of the competent authorities. The recapitulative statement is drawn up for each calendar month within a period not exceeding one month. One missing document topples the exemption, and the tax becomes payable in the country of importation.
What an audit looks at
- Whether the customer's number, or the importer's own number in the country of destination, was active on the date of the transaction.
- Whether the machine physically left the country of importation. The European Court of Auditors, reporting on procedure 42, recalled that the exemption becomes applicable only when the importer demonstrates that the goods have physically left the importing Member State.
- Whether the data in the customs declaration matches the consignment note and the purchase invoice.
- Whether the transaction was reported in the recapitulative statement, in the correct amount.
- Whether the taxable amount was understated. The same report found operators reporting the statistical or customs value in the recapitulative statement instead of the taxable amount of the import, which also includes transport costs and duties.
When procedure 42 is the wrong tool
There is no point running it when the machine stays in the country of clearance, when the buyer is not registered for intra-Community transactions, or when the transport evidence cannot be gathered in time. Nor is there any point running it for effect: this is a cash-flow instrument, not a way to reduce the burden. If the machine is going to stand in Poland and the buyer prefers to account for import VAT in the Polish return, transit and clearance at home can be simpler, a comparison we draw in clearing a machine in the Netherlands, not Poland. A general description of the mechanism outside the machinery context is in our article on regime 42.
What we do, and what we do not
We organise and run clearance on both sides as part of the job, working with our regular customs agencies, and we supply the transport evidence the whole settlement rests on: a correctly completed and signed consignment note, proof of delivery, and data that matches the declaration. We do not file the recapitulative statement for a client, we do not register anyone for VAT in another country, and we do not represent clients before a tax authority. Those need to be set up with the client's own adviser or accountant before the machine leaves the yard, because they cannot be reconstructed afterwards. The Polish paperwork that follows is covered in VAT and duty on imports from the UK to Poland.
Sources
- EUR-Lex: Directive 2006/112/EC, Articles 138, 143 and 262 (accessed 2026-08-20)
- European Court of Auditors: Special Report 13/2011 on the control of customs procedure 42 (accessed 2026-08-20)
- EUR-Lex: Union Customs Code, Regulation 952/2013 (accessed 2026-08-20)
Planning to bring a machine from the UK to Poland, or on to Czechia, Slovakia, Austria or Hungary? Describe the route in the contact form and we will build the carriage with clearance included. The Central European leg is covered in import from the UK to Czechia, Slovakia, Austria and Hungary. This text is general information, not tax advice.
