The Interministerial Committee on Tourism announces new measures for the tourism tax-free system
The Interministerial Committee on Tourism, bringing together the relevant ministers, elected officials and professionals in the sector, met on 17 May in Matignon to announce far-reaching measures to relax the tourism tax-free system. These measures are significant and have a positive impact on the growth in tourism spending and the attractiveness of France. Indeed, the world’s leading destination with nearly 90 million tourists in 2018, France shines abroad. However, the country ranks 3rd in terms of revenue behind the United States and Spain.
The Interministerial Committee on Tourism, between objectives and attractiveness
The CIT acts on 6 priority action areas to increase France’s attractiveness. This attractiveness is based on a wealth of culture, material and intangible heritage, the vitality of artistic creation, cultural and creative industries, language, the art of living… In order to increase this attractiveness, the Government is focusing on six priority areas:
The quality of the reception and the security of the sites;
The structuring of the tourist offer;
State investment support;
Training and employment;
Support for digitization and information sharing;
Access to holidays for as many people as possible.
The tourist tax-free in France, framed by procedures
Tourists visiting France can benefit from an exemption from payment of value added tax (VAT), under certain conditions and for certain products. Only tourists from a non-EU country, regardless of nationality, or a third state (French Polynesia, New Caledonia, Wallis and Futuna, Saint-Pierre-et-Miquelon, the French Southern and Arctic Lands, St. Martin and St. Bartholomew) are affected. You must be at least 16 years old, be in France for a stay of up to 6 months and have valid identification at the time of purchase.
The affected products must be sold at retail, both tourist and non-commercial. The limit on the number of single items purchased must not exceed 15 units and services, tobacco, weapons, ammunition, cultural goods and petroleum products are prohibited. Purchases are made on the same day and must be in excess of 175 euros, all taxes included (TTC).
To obtain the tourist tax, you must follow the following procedures:
When you buy: You have the option to buy the product directly tax-free, so the product is cashed tax-free (HT);
On departure: The merchant gives you an export sales slip, allowing you to refund taxes when you leave the European Union. Simply insert the export sales slips into a PABLO kiosk, VAT will be refunded at a foreign exchange counter or by bank transfer.
The measures announced encourage the expansion of tourist zones in Paris and in major regional metropolises
France proposes the highest tax-free threshold in Europe and the rules of application are very restrictive. These regulations do not encourage the expenditure of tourists, yet relay the growth of the tourist clientele. The measures adopted must strengthen France’s position and reach the target of 60 billion euros in tourism spending by 2020. The potential is undeniable: international tourism spending is estimated at 56.2 billion euros in 2018, 40% of which comes from non-EU nationals. For comparison, the tax-free threshold in Germany is 25 euros, 155 euros in Italy and no legal threshold in Spain and the United Kingdom.
The Interministerial Committee on Tourism therefore proposes three significant measures to consolidate our first position as a global destination:
The reduction of the tax-free threshold from 175 to 100 euros from 2021, thus improving France’s competitiveness with its European neighbours. The zero-rated service will encourage middle-class foreign customers to consume. This will improve market dynamics;
The extension of the purchase period to 3 days from 2020. Current regulations impose a tax-free rate on the day of the purchase of the product. This is a significant and complex constraint for tourists, most of whom simply give up. This 3-day period provides comfort to tourists, allowing them to be tax-free more easily during their stays;
An increase in the cash repayment ceiling to 3000 euros in 2020 in order to increase spending on French territory.
The Trade Alliance encourages the expansion of tourist areas in Paris and major regional metropolises. This expansion allows stores to open on Sunday in order to adapt to the expectations of increasingly mobile and demanding foreign consumers. Sunday is now the second most important day of the week with overall sales growing by more than 10%.
Key tourism figures in New Aquitaine and Gironde
New Aquitaine enjoys an undeniable international influence, due to its many cultural, heritage and gastronomic riches. It is the number one tourist destination in France, on the Atlantic coast with nearly 170 million overnight stays for 27 million tourists in 2017. The region ranks 5th in the national rank for the reception of foreign tourists and 2nd place for the overnight stays of French residents.
Gironde represents 10,725 km2, the largest department in France (2% of the metropolitan area and 12% of the territory of New Aquitaine). 6.2 million passengers passed through Bordeaux airport in 2017 (up 7.7% compared to 2016) and 12 million passengers at The Saint-Jean station in Bordeaux. Here are some of the department’s 2017 figures:
250,000 commercial beds, or nearly 20% of the region’s supply;
2.7 million stays and 4.4 million hotel nights;
780,000 stays and 4.8 million overnight stays in camping;
A total of 6 million stays and 32.6 million overnight stays over the year;
$56.60 spent on average per day per person;
1.8 billion euros of annual tourism consumption.
The easing of the tourist tax-free tax should significantly improve the conditions for refunding taxes to foreign tourists outside the EU. These measures will improve tourism dynamism and grow the economy. Jobs will be created, which will improve living conditions and purchasing power. The Government must therefore continue unabated to make tourists’ stays more enjoyable and therefore more consumption-oriented.
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