UK exports into the EU face new challenges this year. We look at the changes to Regime 42 and what this means for you.
From 1st January 2026 only EU businesses will be able to use Regime 42 as the importer of record. So UK exporters who rely on DDP (Delivered Duty Paid) with Regime 42 for their UK exports, the options are as follows:
- Use a different route into Europe – Importing via the Netherlands using Article 23 (known as the reverse charge) allows you to defer import VAT.
- Obtain your own French VAT number and use Regime 40. No VAT paid upfront, continue to use DDP and deliver direct to French or EU customers. If you are exporting 10 or more consignments a month this could be a good option.
- Continue to use Regime 42 but switch Incoterm from DDP to DAP* (Delivered at Place). This means your EU customer becomes the importer of record, and Regime 42 can still be used – but only if your customer is willing to provide the necessary paperwork (like Powers of Attorney to act as TAX agent on behalf the EU company).
Or you can simply allow the professional TPS Global team to handle and assist you through this process to prevent any hold ups.
The additional bonus is that TPS already have an established warehouse and distribution hub in the Netherlands. So for seamless EU exports, you can appoint TPS to act as a Direct Representative, and we will do the declarations and clearance on your behalf.
We can also store and fulfil EU orders from within the EU Bloc. This will also be beneficial to any businesses who will be hit by the EU €3 euro customs duty on low value parcels taking affect from 1 July 2026.
TPS can handle import VAT and customs entries on your behalf, simplifying compliance and making cross-border trade easier.
*Using the DAP Incoterm creates the least change to how you export.
UK companies set up the EU consignee as the importer of record, which requires a direct representation form. It’s a simple process but it is important the consignee understands what they are signing and why**.
The drawback, as we saw with Brexit, is that the consignee (most likely the customer) will have to put in extra effort, not everyone understands this and some refuse to complete the documentation.
There is also a chance it may make the perception of your goods as slightly less competitive in Europe due to the increased knowledge requirements and demands placed on the buyer.
**Under DAP (Delivered at Place) Incoterms, the buyer pays for all import duties, taxes, and customs clearance costs, even though the seller covers most transportation costs and risks until the goods arrive at the specified destination. The seller delivers the goods, but the buyer acts as the importer of record, handling all charges and formalities upon arrival in the destination country.
Key DAP Responsibilities:
• Seller’s Role:
Arranges and pays for transportation to the agreed-upon place, bears risks and costs until delivery, and handles export clearance.
• Buyer’s Role:
Responsible for import customs clearance, paying all import duties, VAT/GST, and other local taxes and fees.
Why This Matters:
• Cost Surprises:
DAP can lead to unexpected costs for the buyer, as they must manage duties and taxes not covered by the seller’s shipping fee.
• Risk Transfer:
Risk transfers to the buyer once the goods are at the named place, ready for unloading, but before duties are paid.
There’s a LOT to talk about in 2026
We are already seeing the impact of the EU €3 customs duty on the air cargo market. With a shift from millions of small China-origin parcels to more consolidated shipments.
The €3 duty is applied to each item in a consignment, based on tariff headings, so a shipped consignment containing goods with different tariff codes may be charged several times.
This will change the way imports are planned and how European fulfilment will work. For example TikTok Shop is offering ‘Fulfilled by TikTok’ to Asian sellers using warehouse locations in Germany, France, Italy and Spain – placing inventory in Europe for local fulfilment. And Chinese platforms such as Shein and Temu are building ‘local-to-local’ options in Europe using EU logistics hubs.
You can minimise duty charges by bulk import to EU warehouses and then domestic distribution, rather than direct parcel orders from China.
At TPS our Netherlands warehouse is perfectly placed for EU fulfilment and we can handle the shipping, customs clearance, storage and fulfilment of your goods, all with one TPS account manager.
From Custom Procedures to Tariffs TPS are always looking at ways to manage the impact of global geopolitical issues and changes to legislation and compliance on your supply chain and bottom line.
Trust us to find a solution for your freight, storage and fulfilment requirements.
Contact us for more information