European Tax Information

[Keith Wallace]

I have relatives going to Italy/France in the summer, and I got asked to do some research on the tax laws for them after I heard how the VAT in those countries is 20% (a lot higher than the taxes here in America). So, I though that my first stop for information would be this forum, where we have a decent mixture of international users. I was doing a little reading and saw something about allowing tourists to maybe get VAT refunds, and it didn't make a whole lot of sense to me.

If anyone from Europe, or any recent Europe visitors, has any information on how these tax codes work, particularly regarding tourists, I'd greatly appreciate either come comments or links to reading material on the matter.

 

[palandri]

A couple of things. I go to France every year. The VAT is added to the price. When you see something for 10 euro, that's what you pay. The VAT is already in the price. It isn't added on, like in the states.

I've seen signs about a VAT refund in larger department stores like, .Galeries Lafayette. I've never seen it advertised any where else, like restaurants, train stations, grocery stores...etc...

I've never found prices in France extremely outrageous with the VAT included. What will hurt most is the exchange rate. The exchange rate right now is $1.38usd equals 1 euro, but a bank will charge you $1.46 to $1.48 for 1 euro, that's how they make their money. Your bank may even say there's no foreign exchange fee, but their rate will be 8 to 10 cents higher per euro purchased. I remember when $0.95usd equaled 1 euro.

 

[Keith Wallace]

Awesome information, thanks. So, for the sake of comparison on this matter, how is actual purchase price in France, versus in the United States? For example, you can usually go to a fast food place and get a meal for about $6-7. A video game is $60. A pair of jeans might be $30-50. Any idea how the prices differ over there, either in terms of the Euro price or a converted-to-dollar comparison? The VAT is added before the purchase, you say, but do the goods have a lower initial price to compensate for asinine taxing, or should you expect to pay about 10-15% more than you would in the U.S., even when considering the exchange rate?

 

[palandri]

Awesome information, thanks. So, for the sake of comparison on this matter, how is actual purchase price in France, versus in the United States? For example, you can usually go to a fast food place and get a meal for about $6-7. A video game is $60. A pair of jeans might be $30-50. Any idea how the prices differ over there, either in terms of the Euro price or a converted-to-dollar comparison? The VAT is added before the purchase, you say, but do the goods have a lower initial price to compensate for asinine taxing, or should you expect to pay about 10-15% more than you would in the U.S., even when considering the exchange rate?

Some of the things that you'll find expensive in France are gasoline, car rental with insurance, taxi rides, going out to dinner, soda pop. Some of the things that you'll find inexpensive are public transportation on the bus, metro train, electric tram, very good cheap wine, prepared food at the grocery store.

If you want to get by really cheap in France, use public transportation like the Metro ( In Paris, round trip from zones 1 to 3 will be under 3 euro) Their public transportation is outstanding. For food go to a Monoprix grocery store and get a ham and cheese baguette for about 3 euro and a bottle of water.

They have fast food places, like McDonald's, Quick is probably the most popular fast food place. For about 6 to 8 euro, you can get a similar meal. I've never bought a video game. I've bought jeans and shoes. Good jeans are around 30 euro. Designer jeans, the sky is the limit. Nice dress shoes 50 to 60 euro, tennis shoes, 15 to 25 euro. unless you want designer shoes. Fashion is big deal in Paris as I am sure you know, so you have to know where to shop. If you go to Galeries Lafayette you are going to pay a premium, just like Macy's or Neiman Marcus here. If you go to a H&B store, prices are more like Target here.

You probably pay 10 to 15% more, I think the exchange rate causes most of that. When then dollar and euro were on equal footing it really wasn't noticeable.

They are best off getting a local SIM card for their phone in Europe.

Something else I should note is every year I notice fewer and fewer ATM's and machines that will take U.S. debit and credit cards. They use chip & pin technology in Europe for debit and credit cards. We still use mag stripe and signature for credit cards. Very few banks in the U.S, have added chip and pin technology. A lot more are adding it now due to the Target fiasco.

Are these relative of yours going on a tour? or just going on their own? Which cites in France are they going to? I could probably give you a few hints if I knew which cities they were going to.

 

[Keith Wallace]

I'm not all that sure of what's going on. I know they're doing a cruise that's supposed to hit Italy and France, apparently (IDK if they take the boat to one, then cross to the other, or if the boat does it, for example). I've no idea if anything's guided, but I think it's kind of just getting off the boat and going as you please for however long. My mom's gotten some books on Paris, Venice, and Rome, I think, along with a few others, but I'm honestly just not that nosy, so I don't ask. I had just seen something about VAT last week and brought it up to her, then my uncle asked her to have me look more into it for them.

 

[Anglerdk]

Well I'm not from France, and since I live in EU (Denmark) I cannot buy tax free..

Anyway what I can see there are some general rules like they must not stay in the eu for more than 6 months. Also there are some agencies which can do it for them , but they e.g demand minimum purchase of eg 170 euro per. Day per shop (google tax free France). The bill has also to state the vat amount (thinks it is normal in the EU).

Btw. 20% in vat is only on general goods, in France food and restaurants the VAT is way lower (so coming from 25% vat on almost all (cars with an additional 180%) , France is cheaper to live in...

An euro is at the moment $1.39


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[eugen serban]

When I bought my HTC from the shop in Copenhagen, the girl there asked me if I'd like to have the VAT refunded. I guess she asked because I was talking with her in English.

Anyway, if you buy a phone you'll get the VAT back. But, for Europeans, it's generally accepted that stuff is cheaper in U.S.

 

[Anglerdk]

Remember that Europe uses different LTE bands (not sure which ones are used in France



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