If you bring your goods to the European Union, you do not have to pay VAT at the time of customs clearance. Such possibilities are provided by procedure 4200 in import. What exactly is it and when can it be used? Welcome to the article.

What is Procedure 4200 on Import?

If you import goods to the European Union from third countries, such as China, Kazakhstan or the USA, you must undergo customs clearance. This ends with the need to pay customs duties and VAT. Importantly, you have 10 days to settle your tax debt.

However, you can defer payment of VAT. How to do it? All you need to do is use procedure 4200, a simplified method of settling VAT.

IMPORTANT! To be able to do this, customs clearance must take place in one of the Member States, and the goods must also go to an EU country, but other than the one where customs clearance was carried out.

How does it look in practice?

Let’s explain it more simple way using an example.

Let’s assume that you import goods from Great Britain to Poland and customs clearance is carried out in the Netherlands.

When the goods arrive in the Netherlands, the customs clearance process begins. Under this procedure, you submit a customs declaration, providing relevant information, including the use of procedure 4200. It is worth noting that VAT is not charged at the time of customs clearance in the Netherlands, which is an important aspect of the process.

Then the goods are transported to Poland, where they will eventually be sold. Only in Poland, at the time of sale, VAT is settled. This is also the end of the entire import process.

What requirements do you have to meet and what documents do you have to use Procedure 4200?

To use procedure 4200 for import, you must meet certain requirements and have the appropriate documents. What exactly are they?

Firstly, it is VAT registration in the EU country to which the goods are imported, which enables correct tax settlement. In our case it would be Poland.

Secondly, depending on the specificity of the EU country where the clearance will be carried out, it may be required to obtain the permit to use the simplified procedure.

Additionally, you must have full commercial documentation, including invoices, contracts and transport documents. And the customs declaration should be completed in accordance with the regulations of the country of customs clearance and contain information about the procedure used.

Therefore, you have to be aware of the fact that careful transaction records, including shipment path, customs documents and sales information, are key to accurate VAT settlement in the country of destination.

And is it worth it?

Benefits of using procedure 4200 for import

As we have mentioned, it is primarily a deferral of VAT. You settle it at a later date in the country of destination of the goods, and only at the time of sale. Thanks to this, you gain easier flow of goods and greater financial liquidity.

Additionally, procedure 4200 simplifies import formalities to a minimum, which reduces costs. You also don’t have to submit a transit declaration.

It will also be much easier for you to sell the goods because they will already have been cleared. Finally, you do not have to become a VAT payer in the country where customs clearance will be carried out.

If something sounds complicated to you or you want to use the 4200 procedure for import and need support in this area, please contact us. Our experts will guide you through the entire process.