Posted on February 24, 2015
In this post I’m going to talk about two things:
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.
This does, of course, come with restrictions:
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.
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.
That’s it! So remember next time you’re in an EU country buying those Gucci bags remember to get your VAT back!