Taxes when importing a new car from Spain into France

Question

I'm about to purchase a new car. I am spanish, but I live in France (and I'm still learning the language, which means I have a hard time reading the french government websites that cannot pass thought google translate).

I have been wondering what would be economically better, wether to purchase the car in Spain and import it into France or directly buying the car in France. Purchasing the car in Spain seems cheaper (The same car is some thousands euros cheaper), after going thought this guide: https://www.french-property.com/guides/france/driving-in-france/vehicle-importation-registration#

However, in the guide they mention the following about VAT:

2.4. VAT/Customs

No VAT is payable or customs declaration necessary if you are bringing your existing car into France from within the EU.

Only where it is a new car (defined as being owned less than six months or under 6,000km), being imported is there a potential VAT implication in France:

• If you are non-resident (but becoming resident) and you import a new car on which no VAT has been paid (you purchased tax-free with a view to registration in France) then you will need to pay VAT in France.

• If you are already resident in France you will pay VAT in France on new car purchased elsewhere in the EU. You need to ensure you buy 'tax-free' in the country of origin.

From what I understand, I would fall in the second case, and a newly bought car would need to pay the full VAT (which is around 19%). They suggest to buy it tax free so you don't pay taxes twice.

I'm wondering if I understood it right, and if so, would that make it pointless to buy it abroad, since in the end I will be paying, more or less, the same price as if I buy it on France?

Answer 1

It sounds about right. Beside VAT, you may also have to pay the “environmental surcharge” (“malus sur les véhicules les plus polluants”) depending on CO2 emissions. The system is designed to work that way. In general, “means of transportation” are excluded from EU free market rules and there is no easy way to circumvent local taxes or save a ton of money merely by buying a car abroad. A low sticker price often translates to similar or higher costs once you work out all the taxes and formalities.

That said, it can still work out in your favor if you find a used car that fits your needs particularly well or if you chose the country of purchase and vehicle very carefully. This mostly depends on the car makers' commercial strategy, e.g. if they offer signficantly lower prices on some categories in some markets. There are businesses in France who specialise in importing cars on your behalf to profit from that (charging you a fee).

What really matters is the catalogue price (before all fees and taxes). For example, Denmark is a popular source of cars for French residents. This seems somewhat counter-intuitive as the country is richer than France and owning a car is quite expensive there. My guess is that car makers have to lower their margins to stay attractive and if you pay French taxes instead you still come out on top.