When French VAT is due on a vehicle you import

What makes a vehicle a new means of transport: six months or 6,000 kilometres

Article 298 sexies of the French General Tax Code (the CGI) sets out two tests for what EU law calls a new means of transport. A vehicle is new if it is under six months old OR has under 6,000 kilometres on the clock. It is an or, not an and: one test on its own is enough.

So a three-month-old car with 20,000 kilometres is new for tax purposes, and so is a two-year-old car with 4,000 kilometres. In both cases French VAT at 20% is due in France, whatever was paid in the country the car came from.

Only once both thresholds are passed is the vehicle second-hand for tax purposes, and a private buyer then owes no French VAT on it at all.

Two details settle more cases than the rule itself. The six months run from first entry into service, in practice the date of first registration, not from the date you buy. And both tests are read as at the date of the supply, so the odometer reading that counts is the one at delivery, not the one in the advert three weeks earlier.

The margin scheme, and why it leaves you nothing to pay

When dealers elsewhere in the EU resell a used car they bought from a private individual, they may apply the margin scheme, set out in article 297 A of the CGI and harmonised across the EU. They are taxed on their profit alone, not on the full selling price, which is why their asking price can look sharp next to a comparable car sold with VAT stated in full.

Their invoice carries the required special-scheme statement and shows no VAT. The statement reads Margin scheme - Second-hand goods, the wording required by article 226(14) of the VAT Directive (2006/112/EC). A German dealer will often print the domestic form of it, Differenzbesteuerung nach § 25a UStG, which does the same job as long as the scheme is named.

For you, as a private buyer, that invoice closes the matter. The car is second-hand for tax purposes, the VAT sits inside the dealer's margin, and nothing further is due in France.

One consequence is worth knowing before you compare prices: margin-scheme VAT is never shown and never recoverable, by anyone. A business buying that car has no input tax to reclaim, because none has been stated.

The VAT-free invoice that can cost you 20%

If a trade seller invoices you with no VAT and no special-scheme statement, the French tax authorities are entitled to read the sale as an exempt supply in the seller's own country, and therefore as a taxable intra-Community acquisition in France. The French VAT is then claimed from you when you apply for the quitus fiscal, the tax certificate you need before the car can be registered here.

That is a difference of two lines on a sheet of paper, and it is worth 20% of the price of the car. We check that statement on every car we buy, before we commit: on a car at 40,000 EUR, 8,000 EUR turns on it.

What a clean invoice contains:

• the seller's name and VAT number, and yours if you are buying as a business;
• the car identified by VIN, date of first entry into service and mileage;
• either VAT shown as its own line at the local rate, or the statement Margin scheme - Second-hand goods;
• no bare wording such as net, 0% or export left to stand on its own without a reason.

Ask for a corrected invoice before you pay. Once the money has moved, a seller who has banked the sale has very little reason to reissue anything.

Every case, in one place

The five situations that actually come up, set out line by line, VAT included as its own line where it is due.

Read the first column as two questions, in this order: how old and how far, then who is selling and under which scheme. Those two answers settle the tax position on their own.

Buying in Europe for export outside the EU

A good share of our buyers are not in France at all. They want a car found in Germany, Belgium or Italy and delivered to the Gulf, to West Africa or to South America. The VAT position then reverses.

Where we sell the vehicle and ship it ourselves, the supply is exempt under article 262, I, 1° of the CGI, which exempts supplies of goods dispatched or transported outside the EU by the seller or on their behalf. We invoice without VAT and produce the proof that the car has left EU territory. Where you collect the car and ship it by road, sea or air on your own account, the exemption rests instead on article 262, I, 2° of the CGI, on the same condition of proof and provided you are not established in France. Either way an exporter will normally hold a deposit until that proof is in hand, which is a formality rather than a difficulty.

An exported car is never registered in France, so there is no French registration document, no malus (the CO2 and weight penalties charged on first registration in France) and no regional registration tax. On a recent high-powered car those three together often run to tens of thousands of euros.

Whatever falls due on arrival, duty and local VAT, belongs to the destination country and follows its own rates. Nothing in the French exemption changes that, and we tell you so before you order rather than after. Our full export terms are on our export page, in French.

Where the French VAT is actually collected

Not at the border, and not by the seller. It is collected at the quitus fiscal stage. The quitus fiscal is issued by the French tax office and states that the vehicle's VAT position is in order: either the tax has been paid, or none is due. The ANTS, the agency that handles French registration applications online, will not register a vehicle brought in from another member state without it.

The certificate itself costs nothing. If VAT is due, you pay it to the tax office at that moment and the certificate is issued afterwards. The carte grise is the French vehicle registration document. No quitus, no carte grise, no plates.

The file that gets sent back is almost always the same one: an invoice with no VAT and no special-scheme statement. The tax office then presumes French VAT is due and asks for it before issuing anything. A complete file, by contrast, is normally cleared in 24 to 48 hours, which makes this the quickest step of the whole import and the last one that should ever delay a delivery.

A vehicle arriving from outside the EU follows another route: import VAT is paid at customs clearance, and it is the customs clearance document, not the quitus fiscal, that goes into the registration file. The two papers do the same job in the file, but they come from different administrations and are not obtained the same way.

Related reading, in French: le quitus fiscal and le malus d'un véhicule importé.

How we handle it

Send us the link to the advert. You get back the complete price, the VAT treatment stated in writing and the cost of putting the car on French plates: the vehicle, transport, the quitus fiscal and the carte grise, in one figure.

We read the seller's invoice before we commit, and we do not buy a car whose invoice we cannot read. If the special-scheme statement is missing and the seller will not correct it, we walk away rather than let a 20% claim land on you at the quitus stage. On a 40,000 EUR car, that single check is worth more than our margin.

Then we buy the car, we bring it back, and you buy it from Autonero: a French invoice and, for delivery in France, the two-year statutory guarantee of conformity. 40% on order, the balance on delivery. If you have already found the car yourself and only want the paperwork done, we can act as your mandataire, the agent you appoint to deal with the French authorities on your behalf.

Our showroom is at 10 rue du Bois Paris, 28630 Nogent-le-Phaye, in Eure-et-Loir, six kilometres from Chartres, exit 2 of the A11 motorway, by appointment so that someone is free when you arrive. Call +33 9 80 80 15 10 or write to contact@autonero.fr. Buying in Germany? Our step-by-step guide is in French.

See available vehicles Ask us about a vehicle

Read next

• Buy a car in Germany without ever leaving France
• The malus on an imported car, worked out the way the French authorities do it
• What the carte grise on an imported car really costs
• Quitus fiscal: the tax certificate standing between your car and French plates
• Buying a vehicle from Autonero, delivered worldwide