UK exporters leveraging Delivered Duty Paid (DDP) Incoterms for shipments routed through France are facing significant operational and compliance shifts beginning January 1, 2026. Recent developments in French fiscal legislation are set to fundamentally reshape how these shipments are managed, necessitating proactive preparation from businesses, according to Crowe UK.
The core of these changes revolves around the potential for mandatory French VAT registration. Specifically, UK exporters utilizing DDP terms for goods entering France could be required to register for French VAT if ‘Regime 42’ is applied beyond 2025. This requirement extends beyond mere registration, demanding enhanced recordkeeping to meticulously demonstrate compliance with onward supply requirements. The implications for businesses are substantial, as failing to adhere to these new regulations could lead to disruptions in supply chains, penalties, and a negative impact on customer satisfaction.
Crowe UK emphasizes that companies must undertake a thorough review of their existing Incoterms strategies and broader supply chain models. This review is critical to ensure continued alignment with regulatory mandates and to maintain the seamless customer experience that DDP terms are often intended to provide. The DDP Incoterm places the maximum obligation on the seller, who is responsible for delivering the goods to the buyer’s named place, cleared for import, and all duties and taxes paid. The upcoming French VAT changes directly impact this responsibility, particularly concerning the ‘duty paid’ aspect as it relates to VAT.
For UK exporters, the shift means a potential increase in administrative burden and a need to understand the nuances of French VAT law. The ‘Regime 42’ typically refers to a VAT simplification regime for intra-EU triangulation, and its application post-2025 for UK DDP exports via France suggests a re-evaluation of how these cross-border movements are treated for VAT purposes. Businesses that have historically relied on DDP to simplify the import process for their French customers will now need to ensure their internal processes, financial systems, and contractual agreements are robust enough to handle the new VAT registration and reporting obligations.
The International Trade Council advises that early engagement with tax and trade experts is paramount. Companies should assess their current DDP volumes into France, identify if ‘Regime 42’ is applicable to their operations, and begin the process of understanding French VAT registration requirements. Furthermore, a strategic re-evaluation of Incoterms used for French bound shipments might be necessary, potentially exploring alternatives to DDP if the administrative overhead becomes too significant. The goal remains to ensure smooth trade flows while strictly adhering to the evolving fiscal landscape in France. This proactive approach will be key to navigating the changes effectively and maintaining competitive advantage in the European market.