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If you plan to visit Emily’s shopping destinations or other countries in Europe, this tip can save you a LOT of money on big purchases!
When you buy clothing, jewelry, and other items in Europe, you pay an unnecessary tax called a Value Added Tax (VAT). This tax is meant for citizens of Europe, but NOT visitors!
But there’s a way to get it refunded. And possibly save you 15% or more on your purchases!
I’ll tell you what you need to know about VAT refunds. And show you how to get one next time you’re in Europe!
What’s a VAT Refund?
The Value Added Tax (VAT) is a tax mostly used in the European Union. The VAT percentage is different in each country, but usually between 15% and 25% of a product’s cost.
It’s included in the price of the items you buy. So if you get a VAT refund, it’s like getting a discount your purchase!
The VAT amount is a tax on the pre-tax price of a product, NOT the final price. So if a country has a VAT rate of 15%, you’ll be getting a discount of a few percentage points lower.
Because you aren’t a European citizen who benefits daily from paying taxes within the European Union, you can request a VAT refund!
There are 42 countries with a VAT refund:
- All countries in the European Union
- Canary Islands
- South Korea
Countries that offer a VAT refund are mostly European. But some countries outside of Europe participate, too!
What Are the Conditions?
A VAT refund is an excellent way to save if you spend a lot of money in Europe. But there are restrictions you need to know about!
1. You Can Only Be Refunded for Goods (Not Services)
Your massage at the spa, hotel stay, and plane ticket are NOT eligible for a refund. That’s because you can only request a VAT refund for physical items, like:
You can only be refunded for things you can leave the country with. Though there are exceptions to this rule too, like unmounted gemstones and consumable goods you’ve already begun using.
If you aren’t sure if an item is eligible, ask the store clerk!
2. Your Purchases Must Leave the Country Within 3 Months of Purchase (Unused)
To receive a VAT refund on products, you must depart the country with them (or ship them home earlier). Your items are supposed to be unused. Although you can usually get away with wearing jewelry or a coat.
Some stores will seal the items you purchase in the bag at checkout. That way the customs agent can tell whether you’ve used the items you’ve purchased!
In order to be eligible for a VAT refund, your items will need to leave the European Union within 3 months of purchase.
3. Each Purchase Must Be Above a Certain Amount
According to the European Commission, your shopping is only eligible for a VAT refund if you spend more than 175 Euros (or the equivalent amount in the currency of the country you’re visiting). However, different countries can choose to set higher and lower (even zero!) minimum spending requirements.
No matter what the requirement is, you’ll need to make a single qualifying purchase in a single store. You can NOT add up multiple transactions from different stores to reach the spending threshold.
You can see the VAT information for countries in the European Union here.
4. You Must Buy From Specific Merchants
Lots of stores participate in VAT refunds, especially big retailers. And they usually have a sign in the window to let you know.
If you buy from smaller shops, or sidewalk booths, you’re probably out of luck. But you should still ask, especially if you’re spending quite a bit of money!
How to Get a VAT Refund
Getting a VAT refund is easy. But it CAN be time-consuming. So make sure you plan to spend enough money to make the process worthwhile!
Step 1. Look for a Store that Participates in VAT Refunds
Lots of stores have signs on the windows or at the cash register saying they participate in VAT refunds. If you don’t see any signs, make sure you ask the store if they participate before you spend hours shopping!
Step 2. Meet the Minimum Required Spending for a VAT Refund
You’ll need to spend the minimum required amount of money at a participating store to qualify for a VAT refund. This minimum spend varies depending on the country you’re in. You might need to pay 30 Euros or 300 Euros, so be sure to ask!
Step 3. Show the Store Clerk Your Passport
It’s important to carry your passport with you when you’re shopping. The checkout counter will ask for your passport in order to begin processing your VAT.
Step 4. Get a “Tax-Free Form” From the Store
When you’re ready to check out, ask the clerk for a “Tax-Free Form”. The cashier will fill it out for you.
If they leave any spaces empty, make sure you fill them out before you submit the form. Because if you submit an incomplete Tax-Free Form you will not get a refund.
Note: You can also ask the store to ship your purchase home to you. If you do this, they can give you a VAT refund immediately (but the shipping might be more expensive than the refund!).
Step 5. Staple Your Receipts to Your Tax-Free Form
To receive a VAT refund, you’ll need to show your Tax-Free Form and your receipts to airport customs agents. It’s a good idea to attach them to each other so you don’t misplace something!
Note: Certain stores will refund your credit card at checkout. But the refund process is NOT over. If you don’t complete all the steps, the stores will eventually charge your card for the VAT money they refunded you.
Step 6. Show Your Items to Customs
Customs agents are at places other than airports. Whether you’re departing the country by plane, boat, or car, there will usually be an officer to stamp your Tax-Free Form.
These officers will likely ask you to show your (unused) items. So make sure you stop by customs before going through security if the items on your Tax-Free Form are in your checked luggage.
According to Heathrow.com, if you bought jewelry or electronics worth over 250 British pounds (~$307) and the items can be placed in your carry-on luggage, you should need to visit customs after security.
Note: You can think of the European Union as one country when it comes to VAT refunds. You can buy anything between the European Union countries, and you won’t have to show your Tax-Free Form and receipts until you leave the European Union.
Step 7. Get Your Tax-Free Form Stamped
After a customs officer has looked over your receipts and seen your purchased items, they’ll stamp your Tax-Free Form. You now have the complete documentation you’ll need to get a VAT refund!
Note: You should leave yourself plenty of time for this part of the process. You might have trouble finding customs, or there could be a long line! If you don’t get your form stamped, you will NOT get a VAT refund.
Step 8. Find a VAT Refund Desk
You can find VAT Refund desks in departure areas of many hub airports, boat terminals, and around cities. Take your stamped paperwork to a desk.
Step 9. Receive Your Refund!
Depending on the type of VAT refund form you picked up from the store, you can be refunded with cash, a mailed check, or a statement credit to your card. Make sure to ask about any fees that come with each refund method. You’ve spent a lot of time on this refund, so keep as much of it as possible!
Taking advantage of a VAT refund can save you a lot of money when shopping in Europe! It’s possible to get more than 15% back from your purchases, depending on the country you’re visiting. The process can take some time, so make sure the money you’ll save is worth the time spent. And that you give yourself enough time before departure to get the necessary stamps.
You can get a refund on things like:
- Clothing and shoes
But you can NOT get a refund on services like:
- Concert tickets
- Spa services
You’ll need to get a VAT refund form from the store you purchase your items. Show your purchased items and receipts to a customs agent, and you’ll get a stamp on your form. Then find a VAT refund desk and collect your refund before you depart.
Let me know if you have experience claiming a VAT refund!