Value-Added Tax (VAT) Refunds
Every year, tourists visiting Europe leave behind millions of dollars of refundable sales taxes. There's a reason why visitors end up donating their dollars to their host countries: VAT refunds often aren't worth the trouble. You could burn a couple hours collecting a few bucks back from a $25 purchase.
But if you're a die-hard shopper who can multitask, you can recover a good chunk of the hefty sales tax. The process isn't difficult; you just have to get the necessary documents from the retailer, carry your purchase with you, and track down the right folks at the airport, port, or border when you leave. These days you've got to check in early at the airport; this will give you something to do while you're hanging around.
Ideally — if you're charming, lucky, and have your passport handy — you can talk a merchant into taking the tax off the price right there at the store. But even so, you'll still need to get the proper documents stamped when you depart Europe.
Europe's Value-Added Tax ranges from 7.6–25 percent per country, averaging about 20 percent overall. Rates change, so you'll want to check with merchants when you're there.
Unlike business travelers, tourists aren't entitled to refunds on the tax they spend on hotels and meals. Still, you can get back most of the tax you paid on merchandise such as clothes, cuckoos, and crystal. .
All European countries except Ireland require a minimum purchase for a refund, ranging from about $25 to several hundred dollars. You typically have to ring up the minimum at one retailer — you can't add up your purchases from various shops to reach the required amount — so you benefit from finding one spot where you can buy big. If you'll be on the road for a long time, shop near the end of your trip. You need to collect your refund within three months of your purchase.
Assuming you meet these criteria and you're still game, here's the drill. The details vary per country, but you follow the same basic steps.
Shop at stores that know the ropes. Retailers choose whether to participate in the VAT-refund scheme. Most tourist-oriented stores do; often you'll see a sign in the window or by the cash register (if not, ask). It'd be a shame to spend big bucks at a place and not have a chance of getting a refund. You'll also want to know whether the merchant handles refunds directly (which means a potentially bigger refund for you, but more hassle) or uses a service (quicker and easier, but they take a cut).
Get the documents. When you make your purchase, have the merchant fill out the necessary refund document, called a "cheque." You'll need to present your passport. Make sure the paperwork is done before you leave the store so there's nothing important missing. If they leave any blanks for you to fill out, be sure you understand what goes where. Attach your receipt to the form and stash it in a safe place..
What if the store ships your purchase to your home? You can still collect a refund, but the process varies by country. In Italy, the shipper gets your customs stamp for you and sends you the documents. In Germany, you take the documents home and then get a stamp at a German consulate or embassy once you receive the goods. Ask at the shop where you make your purchase how it works in their country.
Know where to get your refund. If you buy merchandise in a European Union country and you're bringing the goods home with you, process your documents at your last stop in the EU, regardless of where you made your purchases. So if you buy sweaters in Denmark, pants in France, and shoes in Italy, and you're flying home from Greece, get your documents stamped in Athens. Be aware that if the currencies are different in the country where you made your purchase and where you process your refund — say, pounds and euros — you may have to pay an extra conversion fee. And don't forget — Switzerland, Norway, Croatia, and Turkey are not in the EU, so if you buy in one of those countries, get your documents stamped before you leave that particular country.
Bring your goods — unused — to the airport or border crossing. You're not supposed to use your purchased goods before you present them at customs. Some retailers, particularly those in Scandinavia, will staple and seal the shopping bag to keep people from cheating. If you show up at customs wearing your new shoes, officials might look the other way — or deny you a refund.
Arrive early. You'll have to wait in a special line at customs and then, if you're collecting your refund right away, at the refund office. In smaller airports, ports, and less-trafficked border crossings, finding the right customs agent can be tough. If you run out of time and have to leave without the stamp, you're probably out of luck. A few countries allow you to try to recover the refund through the embassy in your home country. Regardless, it's a lot of trouble.
Get your documents stamped. The customs export officer will stamp your documents after you present your purchased goods to verify that you are, indeed, exporting your purchase (try to keep the goods in your carry-on). Some officials will stamp your documents even if you haven't got your purchase with you, but others are stricter. If you bought something potentially dangerous (such as a set of knives in Spain) that you probably wouldn't even be allowed to carry on a plane, chase down a customs official to have a look before you check your bag.
Collect the cash — sooner or later. Once you get your form stamped by customs, you'll need to return it to the retailer or its representative at the airport, port, or border crossing. Many merchants work with a service such as Global Refund or Premier Tax Free, which have offices where you present your stamped document. They'll extract about 4 percent for their services, but it can be worth it — often they'll give you your refund in your currency of choice, right then and there. Otherwise, they'll credit the refund to your credit card (within one or two billing cycles). If the retailer handles VAT refunds directly, it's up to you to contact the merchant for your refund. You can mail the documents from home, or quicker, from your point of departure (using a stamped, addressed envelope you've prepared or one that's been provided by the merchant) — and then wait. It could take months. If the refund check comes in a foreign currency, you may have to pay $30 or so to get your bank to cash it.
Don't count on it. My readers have reported that, even when following all of the instructions carefully, sometimes the VAT refund just doesn't pan out. (For example, they have all the paperwork ready when they get to the airport — but can't find the customs official to process it.) These problems seem most prevalent in Italy. Your best odds are for buying from a merchant who knows how to deal with the red tape for you — but even that is not infallible.
Only you can decide whether VAT refunds are worth the trouble. As for me, my favorite trip souvenirs are my photos, journal, and memories. These are priceless — and exempt from taxes and red tape.
VAT Rates and Minimum Purchases Required to Qualify for Refunds
| Country of Purchase | VAT Standard Rate* | Minimum in Local Currency | Minimum in US Dollars** |
|---|---|---|---|
Austria |
20% |
€ 75.01 |
$100 |
Belgium |
21% |
€125.01 |
$165 |
Croatia |
18.5% |
501 HRK |
$90 |
Czech Republic |
19% |
2,000 kc |
$95 |
Denmark |
25% |
300 DKK |
$55 |
Estonia |
18% |
2,500 EEK |
$215 |
Finland |
22% |
€40 |
$55 |
France |
19.6% |
€175 |
$235 |
Germany |
19% |
€25 |
$35 |
Great Britain |
17.5% |
£30 |
$60 |
Greece |
19% |
€120 |
$160 |
Hungary |
20% |
45,000 HUF |
$245 |
Ireland |
21% |
no minimum |
no minimum |
Italy |
20% |
€155 |
$205 |
Latvia |
18% |
29.50 LVL |
$55 |
Lithuania |
18% |
200 LTL |
$80 |
Luxembourg |
15% |
€74 |
$100 |
Netherlands |
19% |
€50 |
$65 |
Norway |
25% |
315 NOK |
$50 |
Poland |
22% |
200 PLN |
$70 |
Portugal |
21% |
€57–60 |
$75–80 |
Slovakia |
19% |
5,000 SKK |
$195 |
Slovenia |
20% |
€50.01 |
$65 |
Spain |
16% |
€90.15 |
$120 |
Sweden |
25% |
200 SEK |
$30 |
Switzerland |
7.6% |
400 SF |
$330 |
Turkey |
18% |
118 YTL |
$85 |
* The VAT Standard Rates listed above — while listed as exact amounts — are intended to give you an idea of the rates and minimums involved. But VAT rates fluctuate based on many factors, including what kind of item you are buying. Your refund will likely be less than the above rate, especially if it's subject to processing fees. |
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Updated for 2008. For lots more tips, check out our best-selling Europe Through the Back Door travel skills guidebook.