Traveling to Europe? MUST READ! Learn how to get your VAT (tax) returned!

Traveling to Europe? MUST READ! Learn how to get your VAT (tax) returned!

In this post I’m going to talk about two things:

  • What is the VAT?
  • How to get your refund!

What is the VAT?

In Europe, Value Added Tax is the sales tax. This tax is already added into the price of the consumer products you buy.

This makes it nice in that it allows you to know exactly what your total price will be, but the tax is very high – typically between 16-25%.

However, as a tourist from outside the EU (European Union ie. most of the people that read this blog), you are not obligated to pay the VAT. Therefore a system has been put in place to refund you your money!  Think about that, 16-25% of the money you spent on items during your vacation you could possible get back!  That could add up to A LOT of money if you are a big shopper.

Countries in Red use VAT!

Countries in Red use VAT!

This does, of course, come with restrictions:

  • In some countries, there is a minimum spend amount for the purchases eligible for the refund. For instance, if you are buying a purse in France, and it didn’t cost you at least €155 (or your whole purchase did not exceed this amount), you are SOL. In some countries – UK, Ireland, and Germany – the minimum purchase price is ZERO. Meaning, theoretically, you could be a candy bar and then go through the process of getting your refund (SPOILER ALERT: It’s not worth it).  Ask at each store and they will tell you if they have a minimum amount for which they will process the forms.
  • The purpose of the refund is for products that are being exported. Therefore, you are not supposed to use/wear the items you bought. If you want a VAT refund of the pair of shoes you bought, don’t use them until after you get home! This can lead to a very good point about doing your shopping towards the end as to not torture yourself.
  • This Refund is for products you are physically taking with you, it does not count for items shipped home! On items shipped you do not pay the VAT at all, but shipping the items can be more expensive than the VAT was, anyway.
  • This refund is only for goods, not services. Your trip to the spa will not be able to be refunded, however your €3,000 shopping spree at Lacoste can be!

How to get your refund!

Now, getting this refund is not the most simplistic process. However once you understand the gist it shouldn’t be overly difficult (at least in theory!).

When buying items, you need to make sure the store associate is aware you’re going to be asking to get the VAT tax back. If you remember to do this at your point of sale it will make the process a lot easier. They will give you your receipt and the forms. I’ve heard now-a-days these “forms” can possibly be a type of card similar to a credit card that has your purchases loaded on it (and it makes it easier to just present that at the next store!).

Kevin’s experience:  On our recent trip we were given our receipt and a form at each store in which we asked for the VAT back while in London and Paris.  We did not see a card.  However, different stores seemed to have different purchase requirements in order for them to process this form.

The final step is crucial and it must be done only when you are departing the EU (ie leaving Paris to fly back to NYC) to head back to your home country. Before you check your bags for your flight (train), you must go to the Customs office in the airport (or train station, etc.) with both the receipts/forms and the items you purchased. This is because the customs agent could ask to inspect the purchased goods.

After they stamp your receipt, they will likely tell you to go through security to the VAT refund desk to do more paperwork and process your refund.

Kevin’s experience: If you are traveling within the European Union (train, plane, etc.) you can not get the VAT back yet. Only when actually leaving the EU.  DO NOT forget to have your receipt stamped at customs before going through the customs/security checkpoint or the VAT kiosk inside will say “sorry, no refund.” Unfortunately I have been there, done that.

VAT tax free

Finally – your payment. This is where it can go one of two ways. They may be able to give you a refund in straight cash (although often in their local currency), or they will take your stamped receipt, send it back to the store/stores, and you will get a refund of your credit card or a check in the mail….eventually. Reports are this could take several months (most people), and some people have reported it taking upwards of a year!

Don’t like any of these tedious steps? Look for stores that display the “Tax Free Shopping” sticker in their store window, and they will either issue you a check at invoice to be cashed at the place I just mentioned, or automatically do the work for you and mail/reimburse you…eventually.

VAT STICKER

That’s it! So remember next time you’re in an EU country buying those Gucci bags remember to get your VAT back!

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