Does the control of customs procedure 42 prevent and detect VAT evasion?
(pursuant to Article 287(4), second subparagraph, TFEU). Special Report No 13/2011
Customs procedure 42 is the regime an importer uses in order to obtain a VAT exemption when the imported goods will be transported to another Member State. In the absence of proper control, goods risk remaining in the Member State of importation without payment of VAT or being consumed in the Member State of destination without VAT being charged there. The report found that control of this procedure in seven selected Member States is deficient and has led to significant VAT losses. The report recommends, inter alia, improving the communication of key data within and between Member States,... encouraging the automatic verification of VAT identification numbers, creating a common EU risk profile for imports under procedure 42 and encouraging action on a proposed amendment of the VAT directive.