Tax-Free Shopping in Europe
A guide to VAT refunds for tourists from overseas.
ABOVE: Loading up on French sailor outfits for
the kids? Put some euros back in your pocket with the European
tax-free shopping scheme.
In Europe, most prices include a
value-added tax or VAT that can be as high as 25 percent. This is like a sales tax, except that it's
built 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 VAT
refund. You can do this in several ways:
1. Use the store's refund affiliate, which
can be identified by a decal such as "Tax Free Shopping" or "Premier
in the store window.
This is the easiest and most
reliable method by far: The store gives you a "tax-free shopping cheque" that you present to customs when you leave the
take your stamped cheques to the refund service's airport desk or border kiosk for an immediate refund, drop
them in a special box, or mail them to the refund service's nearest office after
you get home. You can have refunds credited to your Visa, MasterCard, or other
credit card in your own currency.
Global Blue (formerly Global
Refund) is the biggest VAT refund service; it represents more than 270,000
merchants in 37 countries. Another firm, Planet,
also handles refunds for stores around the world.
Please note: You don't decide what service
to use. The retailer does, so you'll need to process each "tax-free shopping
cheque" with the company indicated on the cheque (usually, but not always, Global
2. Get a refund directly from the shop
where you make your purchase.
Request a VAT refund form, have it stamped by a customs official when you
leave the European Union, then mail the stamped form back to the store
(assuming that the shop is willing to handle refunds this way).
For smaller transactions, the cost of cashing a foreign-currency check may
exceed the amount of the refund. However, it's worth considering for large
purchases or if the merchant will credit the refund to your credit-card
account instead of mailing you a check. In the latter case, your credit-card
company will automatically convert the refund to your local currency.
3. Charge your purchase with a credit
card and ask the shop to make two charge slips: one for the amount of the
sale after deduction of the VAT, and the other for the amount of the VAT.
store will post the larger transaction but set the VAT charge slip aside. After
you'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. (Not
all merchants will go along with this method, and it works best in stores that
handle credit-card transactions manually.)
- Don't wait until you get home
to think about VAT refunds. Learn how tax-free shopping works, request tax-free
shopping cheques or VAT refund forms when you make your purchases, and
have the cheques or forms stamped by a local customs official before you
leave for home.
- If you're like me, you may prefer to pay the tax, since you may someday
reap the benefits. (I spent 18 days in a
Rome hospital at the
expense of Italy's taxpayers, and after that experience, I wouldn't dream of
asking 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 a
higher rate than food or books, for example.) Also, you're required to spend a
minimum amount in a store to apply for a refund, and this minimum is different
for each country.
The table below shows the most common VAT rates in selected
European countries when we last checked. Rates can and do change, so this table
should be used only as a general guide:
||19% (13% in Madeira and
Notes and tips:
Refund percentages are slightly less than VAT
percentages. (For example, 17.5% VAT added to the
wholesale 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. For
most purchases, the convenience makes the commission worth it, but you may
want to obtain the refund directly from the store for extremely large
purchases. (Department stores often have special refund arrangements for
VAT refunds do not apply to services, 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 such
refunds 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 for
inspection when you present your Tax-Free Shopping Cheques or refund forms
to 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 forms
stamped 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 worth
Eligibility for VAT refunds:
If you live outside the European Union, you're
eligible for VAT refunds in all European countries that offer such
If you live within the European Union, you're
normally eligible for VAT refunds only in non-EU countries that offer such
refunds (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 to
claim VAT refunds on EU purchases beyond their own borders.
Important: For more information on tax-free shopping, visit the Web sites
of the two major VAT refund companies, and
direct any questions to them. (We're writers, not tax experts, and the refund
companies have control over when, whether, and how you get your VAT refund.
We have no connection to Global Blue or Planet.)
VAT refund services:
pottery in France? Don't forget your VAT refund.
The world's best-known VAT-refund company represents several hundred
thousand retailers around the world.
Planet (formerly Premier Tax Free)
This company represents merchants in 55 countries.