Airports are the best place to get a VAT tax refund, because most people will leave the European Union on an airplane from an EU airport. Why not take a few minutes to understand how YOU can use this to your advantage the next time you depart the EU? Play your cards right, and you can get back some taxes that you don’t legally have to pay. How cool is that?
Getting a VAT tax refund has been a thorn in my side every time I’ve made a trip to Europe. Usually, my wife wants to purchase a nice purse or other articles from some pretty expensive retailers (Gucci, Louis Vuitton, etc.). When spending several thousand dollars in Europe, a VAT tax refund is a must to help keep the cost as low as possible. Why leave hundreds of dollars on the table when you don’t have to? It only makes sense to pursue your refund when you are leaving the European Union (EU). But why do they make it so hard? I’m not sure they (the EU) realize how confusing and frustrating it can be to get the refund (or maybe they do and want to keep it that way. Many people don’t want to be bothered or just give up).
So what is the VAT tax and why do I care? The VAT (value added tax) is attached to goods as they are being manufactured and ends up being a “hidden tax” because it is a part of the price of an item in the EU countries. It’s not added on at the end when a person finally makes a retail purchase. The VAT tax is added and collected at various stages of the manufacturing process by the governments involved. The amount can range up to 25% of the finished items, so this is a tax that brings in a lot of money for each country and is part of what they use to provide services to the people that live there. Since tourists don’t get any benefit from government services (like health care and social services), the EU offers to refund this VAT tax to tourists when they leave the EU. Your mission, should you decide to accept it, is to recover the VAT tax on the items you purchase while in the EU on business or vacation. Sound good?
In order to get the VAT tax back, there are specific things you need to do – and they take time. It is in your best interest to know what to do and to budget the appropriate amount of time to do it. Otherwise, some of your hard-earned money will stay on the table along with some of mine! If you know what has to happen to get your refund, then you’ll be better equipped to shop at the right retailers. That’s an important point to make. When you know you’ll be spending more than the minimum amount needed to qualify for a refund (varies by country – ask the shopkeeper how much it is), you’ll want to shop in places that will make the refund process easier for you. Here’s how you can do that:
1. It’s best to look for the Global Blue Tax Free or Premier Tax Free sign in the merchant’s window so you know it will be easier to claim a VAT refund. Merchants that provide this service make it possible to claim your refund at the airport when you are leaving the EU. You can also mail in your refund forms, but I prefer to get a refund before I leave. Too many of the forms I’ve mailed in have never resulted in a refund coming back to my credit card. Tell the merchant that you want to claim a VAT refund, ask them how much you have to spend to be eligible (each country is different) and have them prepare the forms for you. Remember that you must spend the minimum amount all at once. You cannot add smaller purchases together to meet the minimum spend amount. So plan your shopping trips accordingly if you want to be able to get a VAT tax refund of any of the purchases you make. And make your purchases close to the time you’ll be leaving the EU. There is a 3 month limit on the time you have to claim a refund from the purchase date. Don’t miss out because you waited too long to claim the refund.
2. Bring your passport with you when shopping. You’ll need it to start the refund process.
3. Make your big purchases only at stores that know how to process VAT tax refunds. Before shopping, make sure they will provide you with the necessary forms. If you work with a store that has a Global Blue or Premier Tax Free sign, you can process your refund in the airport as you are leaving the EU. Check both to be sure they have a location in the airport you will be departing from.
4. Obtain all of the necessary documents from the store and attach the receipt to them. Be sure to fill in any blanks on the form on the spot so you can get help with anything you’re not sure about. Don’t be afraid to ask questions. That’s what the store is obliged to do – help tourists through the process and provide assistance in filling out the forms.
5. Keep all of your purchase paperwork safely together until you get to the airport that you will be leaving the EU from. There, you will get it all stamped by an agent in the local customs office. Remember that purchases from any EU countries will be processed all at the same time, so keep track of those receipts. Just ask someone where to go for customs stamps or watch for the signs directing you. Be sure to do this before you check your bags, because the agent will usually ask to see the items you purchased. Everything you bought is supposed to be new and not being used yet, so you should not be wearing any of the items. Have it all easily accessible if the agent asks to see it.
6. Once you get your stamps, you can proceed to the Global Blue office or to the Premier Tax Free office and have them process your refund. If you didn’t use a tax free service, then you’ll have to mail the forms back and hope that you’ll eventually get your refund. Allow 2 or 3 months for the refund to appear on your credit card statement. Just be aware that a lot of people never see their refund (me too!). Try to plan for your refund in the airport in cash or by credit card. This is the best way to be sure you’ll get a refund.
7. If you get a cash refund in the airport and it is in Euros or Pounds, you’ll have to spend it in the airport or just take it home and use it on the next trip (that sounds like a good excuse to return one day soon!). You can also take it to your bank and see if they will exchange it for you at a reasonable cost.
To summarize: My first few attempts at getting a refund didn’t go well, since I didn’t really understand the process and I just hoped that things would work out. Well, they didn’t. I stumbled around and got some refunds, but not others. So now I am wiser and a few Euros lighter. But future purchases will be made with a new-found understanding of the VAT tax refund scheme and how to work it to my advantage. I really believe that a lot of money must be left behind by tourists every year, simply because they are so confused about the process that they don’t bother with it. Don’t be one of those people who give up and leave without the money they are entitled to.
I’d like to hear about success stories you’ve had with getting VAT tax refunds processed. Surely some of you have become experts in this? What do you have to add? Help a traveler out!