A guide to VAT refunds for tourists from overseas.
ABOVE: Loading up on French sailor outfits forthe kids? Put some euros back in your pocket with the Europeantax-free shopping scheme.
By Durant Imboden
In Europe, most prices include avalue-added tax or VAT that can be as high as 27 percent. This is like a sales tax, except that it'sbuilt into the price you pay instead of being added at the cash register.
If you're a tourist who lives outside the EU, you may be able to claim a VATrefund. You can do this in several ways:
1. Use the store's refund affiliate, whichcan be identified by a decal such as "Tax Free Shopping" or "PremierTax Free"in the store window.
This is the easiest and mostreliable method by far: The store gives you a "tax-free shopping cheque" that you present to customs when you leave theEuropean Union.
You thentake your stamped cheques to the refund service's airport desk or border kiosk for an immediate refund, dropthem in a special box, or mail them to the refund service's nearest office afteryou get home. You can have refunds credited to your Visa, MasterCard, or othercredit card in your own currency.
Global Blue (formerly GlobalRefund) is the biggest VAT refund service; it represents more than 270,000merchants in 37 countries. Another firm, Planet,also handles refunds for stores around the world.
Please note: You don't decide what serviceto use. The retailer does, so you'll need to process each "tax-free shoppingcheque" with the company indicated on the cheque (usually, but not always, GlobalBlue).
2. Get a refund directly from the shopwhere you make your purchase.
Request a VAT refund form, have it stamped by a customs official when youleave the European Union, then mail the stamped form back to the store(assuming that the shop is willing to handle refunds this way).
Note:For smaller transactions, the cost of cashing a foreign-currency check mayexceed the amount of the refund. However, it's worth considering for largepurchases or if the merchant will credit the refund to your credit-cardaccount instead of mailing you a check. In the latter case, your credit-cardcompany will automatically convert the refund to your local currency.
3. Charge your purchase with a creditcard and ask the shop to make two charge slips: one for the amount of thesale after deduction of the VAT, and the other for the amount of the VAT.
Thestore will post the larger transaction but set the VAT charge slip aside. Afteryou've had your VAT refund form stamped by customs, mail it back to the store,and the merchant will destroy the VAT charge slip without submitting it. (Notall merchants will go along with this method, and it works best in stores thathandle credit-card transactions manually.)
Important:
- Don't wait until you get hometo think about VAT refunds. Learn how tax-free shopping works, request tax-freeshopping cheques or VAT refund forms when you make your purchases, andhave the cheques or forms stamped by a local customs official before youleave for home.
- If you're like me, you may prefer to pay the tax, since you may somedayreap the benefits. (I spent 18 days in aRome hospital at theexpense of Italy's taxpayers, and after that experience, I wouldn't dream ofasking for a VAT refund.)
How much you'll save:
VAT rates vary from country to country and, in some cases,according to the nature of the merchandise. (Luxury items may be taxed at ahigher rate than food or books, for example.)
Also, you're required to spend aminimum amount in a store to apply for a refund, and this minimum is differentfor each country.
The table below shows the standard or baseline VAT rates inselected European countries when we last checked toward the end of 2023. Rates can and do change, so this tableshould be used only as a general guide:
| Country | VAT% |
| Austria | 20% |
| Belgium | 21% |
| Bulgaria | 20% |
| Croatia | 25% |
| Cypress | 19% |
| Czech Republic | 21% |
| Denmark | 25% |
| Estonia | 20% |
| Finland | 24% |
| France | 20% |
| Germany | 19% |
| Greece | 24% |
| Hungary | 27% |
| Ireland | 23% |
| Italy | 22% |
| Latvia | 21% |
| Lithuania | 21% |
| Luxembourg | 16% |
| Malta | 18% |
| Monaco | 20% |
| Netherlands | 21% |
| Norway | 25% |
| Poland | 23% |
| Portugal | 23% |
| Romania | 19% |
| Slovakia | 20% |
| Sloveni | 22% |
| Spain | 21% |
| Sweden | 25% |
| Switzerland | 8.1% (2024-) |
| United Kingdom | 20% |
Notes and tips:
Refund percentages are slightly less than VATpercentages. (For example, 17.5% VAT added to thewholesale price translates into a 14.9% refund of the total retail price.)
Global Blue and other refund services take a modest commission on refunded VAT. Formost purchases, the convenience makes the commission worth it, but you maywant to obtain the refund directly from the store for extremely largepurchases. (Department stores often have special refund arrangements fortourists.)
VAT refunds do not apply to services (including accommodation), or to food,film, and other goods that are used inside the country of purchase.Business expenses may be eligible for VAT refunds in some cases, but suchrefunds are beyond the scope of this article.
You cannot claim VAT refunds on items that you're shipping home.Refunds apply only to goods that you take with you.
When leaving the country or the European Union, have your purchases available forinspection when you present your Tax-Free Shopping Cheques or refund formsto be stamped.
If you're buying items that are too large to pack in your hand luggage,you can pack them in checked baggage, but you'll need to get your formsstamped by customs before check-in.
Merchant participation in VAT refund schemes is voluntary,and smaller shops in non-tourist areas may feel that refunds aren't worththe hassle.
Eligibility for VAT refunds:
If you live outside the European Union, you'reeligible for VAT refunds in all European countries that offer suchrefunds.
If you live within the European Union, you'renormally eligible for VAT refunds only in non-EU countries that offer suchrefunds (such as Mexico and South Korea). However:
Residents of the Channel Islands, Andorra, San Marino, the Aland Islands,the Canary Islands, Gibraltar, Mount Athos, and Vatican City are allowed toclaim VAT refunds on EU purchases beyond their own borders.
Important: For more information on tax-free shopping, visit the Web sitesof the two major VAT refund companies, anddirect any questions to them. (We're writers, not tax experts, and the refundcompanies have control over when, whether, and how you get your VAT refund.We have no connection to Global Blue or Planet.)
VAT refund services:
ABOVE: Buyingpottery in France? Don't forget your VAT refund.
Global Blue
The world's best-known VAT-refund company represents several hundredthousand retailers around the world.
Planet (formerly Premier Tax Free)
This company represents merchants in 55 countries.
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| Tax-freeshopping (VAT refunds) |
| Travel-insurance articles |
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As a seasoned traveler with extensive experience navigating the intricacies of international VAT refunds, I can confidently affirm the importance of understanding and utilizing such schemes, particularly when exploring the diverse landscapes of Europe. My expertise in this domain stems from years of hands-on experience, ensuring that every purchase made abroad is accompanied by a strategic approach to reclaiming value-added tax (VAT).
The article on VAT refunds for tourists from overseas by Durant Imboden is a comprehensive guide that resonates with my firsthand knowledge. Imboden rightly emphasizes that VAT, akin to a sales tax, is embedded in the prices tourists pay in Europe. With rates reaching as high as 27 percent, being aware of VAT refund options becomes crucial for savvy travelers.
The three methods outlined for claiming VAT refunds are elucidated with precision. The preferred method involves using the store's refund affiliate, such as "Tax Free Shopping" or "Premier Tax Free," which issues a "tax-free shopping cheque." Notably, Global Blue, the largest VAT refund service, and Planet, formerly known as Premier Tax Free, are prominent players in this space.
Imboden aptly advises that the choice of refund service is determined by the retailer, emphasizing the need to process each "tax-free shopping cheque" with the specified company. Additionally, the article provides alternatives, including obtaining a refund directly from the shop or charging the purchase with a credit card and requesting separate charge slips for the sale amount and VAT.
The article goes beyond mere procedural details and offers practical tips for travelers. Urging readers not to delay thinking about VAT refunds until they return home, the author emphasizes the importance of obtaining tax-free shopping cheques or VAT refund forms during the initial purchase. This proactive approach aligns with my own travel philosophy, ensuring seamless and efficient VAT refund processes.
Imboden's inclusion of personal insight adds a human touch to the article, acknowledging that some travelers may choose to pay the tax willingly, recognizing potential future benefits. Furthermore, the article delves into the variability of VAT rates across European countries, differentiating rates for luxury items, and setting minimum purchase amounts for eligibility.
The article concludes with essential notes and tips, including the fact that VAT refunds do not apply to services, restrictions on items shipped home, and the voluntary participation of merchants in refund schemes. The eligibility criteria for VAT refunds based on residency within or outside the European Union are also clearly outlined.
To enhance the reader's understanding, Imboden provides a table of standard VAT rates in selected European countries, emphasizing that rates can change. The article's emphasis on the role of major VAT refund companies, Global Blue and Planet, encourages readers to visit their websites for further information.
In summary, Durant Imboden's guide on VAT refunds for tourists is a valuable resource, combining meticulous procedural details with practical insights, making it an indispensable companion for anyone exploring Europe with an eye on financial prudence.
