Centralized Clearance and the VAT-Customs Disconnect: Why the Union Customs Code’s Most Ambitious Simplification Has Failed to Deliver, and What Must Change

Centralized Clearance for Import (CCI), introduced as a flagship simplification of the Union Customs Code (UCC), allows authorized traders to lodge import declarations at their supervising customs office (SCI) in their Member State of establishment, even when goods enter the EU customs territory through another Member State. Despite the legal framework being in place since 2016, an EU-level Information Technology system operational since July 2024, and Member States progressively connecting through 2026, the Customs Decision System (CDS) records only forty-two active CCI authorizations EU-wide as at 31 May 2026– of which, as reported to the February 2026 CBG, merely eleven were identified as ready for operational use within the live CCI system. This article argues that the root cause is structural: a persistent and unresolved legislative disconnect between the UCC and the VAT Directive. Under Articles 60–61 and 201 of the VAT Directive, import VAT is due to the Member State where goods physically enter the EU – not the Member State of the declarant’s establishment – producing a regime that centralizes customs obligations whilst leaving VAT obligations fragmented across jurisdictions. Drawing on Commission consultation records from 2011, positions developed by Business Europe, CLECAT, the European Express Association (EEA), and AmCham EU over more than a decade, the findings of the Commission’s January 2026 interim evaluation of the Customs Programme 2021–2027, and material presented at the February and June 2026 CCI Customs Business Group (CBG) meetings, this article traces the history of the disconnect, assesses its operational and fiscal consequences, examines the rare case in which CCI currently works, and calls for a structured legislative dialogue – led by the Directorate-General for Taxation and Customs Union VAT and customs directorates jointly – to deliver binding alignment before the EU Customs Reform enters into force