SHARE
COPY LINK
For members

SHOPPING

EXPLAINED: How British tourists can profit from tax-free shopping in France

British tourists travelling to France - when it has been possible - have been able to make the most of tax-free shopping since the UK formally left the EU at the beginning of 2021.

EXPLAINED: How British tourists can profit from tax-free shopping in France
Many high-end stores offer tax-free shopping. Photo: Lucas Barioulet / AFP

There are a lot of changes to be aware of since the UK left the EU, covering everything from passports to Bovril, pets to phones, but there is one benefit to UK tourists in France.

READ ALSO Travel to France: Everything that has changed since Brexit

Residents of England, Wales and Scotland can make the most of Tax Free Shopping in France and the rest of the EU – which means that they can save up to 19 percent of the cost of certain goods by claiming back VAT on their purchases.

It does not apply to everything – you can’t get VAT back on your restaurant bills, or bus or train tickets. But it does apply to fashion items, cosmetics, jewellery, technology and some food and drink items. 

The good news is that many high street retailers and global luxury brands operating in France offer Tax Free Shopping services. But not all retailers offer the VAT exemption service – those that do routinely inform customers that the option is available.

However if this is not on offer, non-EU residents can claim back VAT later.

Now that the UK has left the EU, British tourists and visitors aged 16 and over, who have been in France for less than six months, are eligible to shop tax free in the EU, provided they:

  • Live in England, Scotland or Wales, and can prove it by showing their stamped UK passport (UK nationals who are resident in the EU present residency documents when entering, only tourists should get a stamp in their passport on entry and exit)
  • Meet the minimum spend criteria of the country in which the purchase is made;
  • Take the goods out of the EU (aka ‘back home’) within three months of purchase.

In France, the total amount of your purchases, including taxes, must be greater than €100. At the time of purchase, ask the retailer for a VAT refund form, which must be signed by both the retailer and you.

Other EU countries have different minimum qualifying spends. 

When you leave France to return to the UK, present your purchases and the form to customs for approval. It is important to note that items on which you are claiming a refund must be unused and in their original packaging.

Officials will stamp and return the two sheets of your VAT refund form to you. 

If you leave the EU by train – Get your VAT refund forms stamped by customs officials, either during your journey or at the border crossing station (at the EU exit point). In Paris, there are booths at Gare du Nord where checks can take place and forms be stamped.

If you leave the EU aboard ship or by road – You must have your VAT refund forms stamped by the customs office at the final port or road exit point in the European Union.

If you leave the EU from another Member State than France – After an inspection, the customs office of the final Member State you visit before you return to the UK will stamp and return your forms.

Once your form has been stamped you send it back to the retailer to claim your refund.

You can take care of the process electronically, if you prefer. To use France’s PABLO system purchases must have a total value, including taxes, greater than €175. Once validated, your form can be scanned and the retailer automatically informed so refunds can be processed.

And there are also a number of apps that can make the process easier still, including Zapptax or Global Blue which also take scanned forms and inform the retailer. 

If you’re in a shopping mood on your holidays, however, it’s worth pointing out that limits on bringing alcohol and tobacco back into the UK have effectively ended the French ‘booze cruise’.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

WORKING IN FRANCE

URSSAF: What is it, how it works, and how it affects you

if you are working as a freelancer, contractor or have set up a business in France you will need to become familiar with the social security collections agency Urssaf. Here's what it is and how it works.

URSSAF: What is it, how it works, and how it affects you

Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales – more usually known, because that’s a mouthful, by the acronym Urssaf – are the administrators who collect social security contributions that fund a large part of France’s labyrinthine social security system, including, notably, health insurance.

It is responsible for collecting some €534.4 billion from 9.8 million users every year to help fund social security in France.

If you’re an employee in France, you will probably have nothing directly to do with Urssaf, because – for the most part – dealing with it will fall into the realms of Somebody Else’s Problem (ie your employer). 

But if you are freelance, a contractor or set up your own business you will almost definitely have to deal with Urssaf. 

Type of regime

Many people working for themselves in France use the simplified Micro Entrepreneur regime – often still referred to as auto entrepreneur – which sets up a basic sole trader-style business. 

Its advantage is (relative) simplicity but it has limits on earnings as well as other limitations like being able to write off business expenses.

Micro-entrepreneur: How to set up as a small business in France

Other options for freelancers or sole traders include the Entrepreneur individuel à responsabilité limitée (EIRL – basically a limited liability sole trader); Entreprise unipersonnelle à responsabilité limitée (EURL – another sole trader option), Société par Actions Simplifiée Unipersonnelle (SASU); or Société à Responsibilité Limitée (SARL).

These allow for higher earnings but are more complicated and may require an accountant to set up.

If you start off as a micro-entrepreneur but then your earnings go over the threshold you can switch to another regime without attracting a penalty.

How to register 

These days the whole registering a business thing can be done online. For a simple micro enterprise, you can create an account on autoentrepreneur.urssaf.fr, then give details of the business you intend to run, and your social security numbers. 

If you’re looking to set-up a more complex business structure such as a EURL, SARL, SASU, or SAS, you should start with the portail e-procédures at procedures.inpi.fr.

You must then send off the declaration, which is registered with the relevant Centre de formalités des entreprises;

  • For commercial businesses eg shops or bars, this is the Chambre de commerce et d’industrie;
  • For artisans, craftspeople, tradespeople and some other commercial businesses, it is with the chambre de métiers et de l’artisanat;
  • For professions libérales – including, for example, freelance journalists – it is with Urssaf.

Within 15 days of registration, you should receive your business registration number, known as the SIRET number.

Notice that you have been signed up to the relevant social security regime should follow in a few weeks. 

Since 2020, all independent workers belong to the Assurance Maladie health regime, and a few professionnels libéraux are signed up to the standard Assurance retraite for their pensions. 

How much does it cost to set up a business?

That depends on your business. Setting up as a micro entrepreneur (auto entrepreneur) costs nothing administratively and is the simplest way for freelancers to set up for themselves. 

Technically speaking it is a tax status rather than a business structure. 

Then what?

Once you’re up and running, the most regular contact with Urssaf should be when you file your earnings online, which – for micro entrepreneurs – can be done monthly or quarterly using the auto entrepreneur website.

You will then be informed how much you owe in cotisations, (social security contributions) which will be taken out of your bank account around a month later.

 If you have a French-incorporated business, such as EURL, SARL, SAS or SASU, you will use URSSAF’s main website www.urssaf.fr, or get your accountant to do so. Some business set-ups in France require you to use an accountant.

READ ALSO Ten tips for working as a freelancer in France

Banks

Note that you will need to set up a dedicated bank account for your business. As a micro entrepreneur, despite claims from banks, it does not have to be a business account (which attract larger fees). But it should be separate from your personal bank account, and just used to pay your charges, for any business expenses (which you cannot claim for, if you’re a micro entrepreneur). 

Other business regimes, such as the Entrepreneur individuel à responsabilité limitée (EIRL – basically a limited liability sole trader); Entreprise unipersonnelle à responsabilité limitée (EURL – another sole trader option), Société par Actions Simplifiée Unipersonnelle (SASU); or Société à Responsibilité Limitée (SARL), have certain advantages on allowable earnings, compared to the very basic micro-entrepreneur regime – but will incur a sliding scale of charges on set-up, and require different book-keeping and accounting systems. Some will also require you to be registered for VAT.

Do I need an accountant?

This is really a personal choice – the micro-entrepreneur regime is designed to be simple and to be used by individuals, but some people still prefer to use an accountant.

The business structures for higher earners are a little more complicated and may require an accountant to set up. Most people use accountants if they are within these structures, unless they are confident in both their French and their book-keeping abailities.

If you have an accountant you can nominate them to be your representative in any dealings with Urssaf, although note that you are still responsible for any fees and charges, even if they are incurred by your accountant making a mistake.

Okay — how much do you pay in charges?

For micro-entrepreneurs, social charges can be paid monthly or quarterly. They are calculated as a fixed percentage of your earnings, depending on the type of work.

Rates are 12.8 percent for the sale of goods, 22 percent for artisanal and commercial services, 22 percent for professions libérales attached to the standard Assurance Retraite for retirement, and 22.2 percent for a small number of professions libérales attached to Cipav. 

A levy of 0.1 percent to 0.3 percent is also charged. It goes to the CPF fund giving all workers the right to a financial contribution for training.

Note, micro-entrepreneurs are limited in the amount they can earn: for business activities and the supply of accommodation (hotels, bed and breakfasts, rural cottages classified as furnished apartments, furnished apartments), the threshold is €188,700.

For service and professional activities, the threshold is €77,700.

Micro entrepreneurs will be obliged to step up to another business regime if they break these earnings thresholds.

For other business types, these maximum earnings thresholds do not exist, but bosses will have other requirements, for example, they may need to use the services of an accountant, and will have to be audited once they cross a certain earnings threshold.

Taxes

It’s important to note that Urssaf deductions are only part of the story – there are also other taxes to consider.

Personal income tax is covered in the annual income tax declaration, while businesses taxes fall under a range of tax regimes, depending on your type of business.

Commercial, industrial, or manual/trades/crafts businesses fall under the Bénéfices Industriels et Commerciaux (BIC) system. Professional businesses fall under the Bénéfices non Commerciaux (BNC) system. Agricultural businesses use the Bénéfices Agricole (BA) system.

Don’t forget, either, the Contribution Fonciere des Entreprises (CFE) property levy, a local tax payable by any company or self-employed person earning more than €5,000 per year, even if they conduct their business at home, at the kitchen table. This one is due every December.

What if I have a problem?

You can contact Urssaf staff online via the website, or arrange an appointment for a face to face meeting at their offices, if you prefer. Contrary to popular opinion, they’re there to help you.

Urssaf, in the past, had a poor reputation. But, as with all French bureaucracy, it’s better to work with it rather than try to fight or resent it.

SHOW COMMENTS