1

I live in California, USA. I plan to purchase ~500 EUR worth of goods by phone from a French business that will send me the goods by mail. Do I have to pay the French VAT, California sales taxes, or some other tax on it?

2

You wouldn't pay VAT or sales tax, but you may need to pay a "use tax". From Wikipedia:

A use tax is a type of tax levied in the United States by numerous state governments. It is essentially the same as a sales tax but is applied not where a product or service was sold but where a merchant bought a product or service and then converted it for its own use, without having paid tax when it was initially purchased. Use taxes are functionally equivalent to sales taxes. They are typically levied upon the use, storage, enjoyment, or other consumption in the state of tangible personal property that has not been subjected to a sales tax.

Individuals rarely comply with this requirement to pay use tax, but it may be more important for a business to do so.

  • 1
    To add: NO VAT because VAT does not apply to EU exports. So, as the goods leave the EU, no VAT. – TomTom Jun 20 '18 at 12:35
0

A few references corroborating Jeff O'Neill's claim that one does not have to pay VAT when buying goods from the US in a business based in France:

From https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-abroad#vat-on-exports-to-non-eu-countries (mirror):

VAT is a tax on goods used in the EU, so if goods are exported outside the EU, you do not charge VAT. You can zero rate the sale, as long as you get and keep evidence of the export, and comply with all other laws. You must also make sure the goods are exported, and you must get the evidence within 3 months from the time of sale. This can be longer for goods that need processing before export and for thoroughbred racehorses.

The time of sale is the earlier of the day you:

  • send the goods to your customer
  • get full payment for them

From https://europa.eu/youreurope/business/vat-customs/cross-border/index_en.htm (mirror):

If you sell goods to customers outside the EU, you do not charge VAT, though you may still deduct the VAT you yourself have paid on your related expenses (goods/services bought in specifically to make those sales).

From https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32006L0112&from=en (mirror): Official Journal of the European Union > COUNCIL DIRECTIVE 2006/112/EC of 28 November 2006 on the common system of value added tax > CHAPTER 6: Exemptions on exportation > Article 146:

Article 146

  1. Member States shall exempt the following transactions:

(a)

the supply of goods dispatched or transported to a destination outside the Community by or on behalf of the vendor;

(b)

the supply of goods dispatched or transported to a destination outside the Community by or on behalf of a customer not established within their respective territory, with the exception of goods transported by the customer himself for the equipping, fuelling and provisioning of pleasure boats and private aircraft or any other means of transport for private use;

(c)

the supply of goods to approved bodies which export them out of the Community as part of their humanitarian, charitable or teaching activities outside the Community;

(d)

the supply of services consisting in work on movable property acquired or imported for the purpose of undergoing such work within the Community, and dispatched or transported out of the Community by the supplier, by the customer if not established within their respective territory or on behalf of either of them;

(e)

the supply of services, including transport and ancillary transactions, but excluding the supply of services exempted in accordance with Articles 132 and 135, where these are directly connected with the exportation or importation of goods covered by Article 61 and Article 157(1)(a).

  1. The exemption provided for in point (c) of paragraph 1 may be granted by means of a refund of the VAT.

FYI: Buying goods from the US in a business based in France: the business refuses to remove the VAT. Can I get the VAT reimbursed?

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