Essential Knowledge: How to Claim Your European VAT Refund

Essential Knowledge: How to Claim Your European VAT Refund

Posted June 29, 2017

Frequent travelers to Europe may be aware of the European Union value added tax (or EU VAT) system, and may even have taken advantage of the VAT refund on past journeys. For guests planning on purchasing souvenirs or travel mementos, the VAT refund is a quick and easy way to make sure you’re only spending what you should, and not leaving your hard-earned money in the pockets of European retailers.

What is Value Added Tax?

Residents of the United States may not be familiar with the concept of VAT – the U.S. is one of roughly 30 countries worldwide that does not use this tax system. Essentially, value added tax is what it sounds like – a tax collected incrementally at all stages of production, which ensures the government of the country where the item is sold receives its fair share.

From a consumer’s point of view, VAT works like a conventional sales tax. The difference? Since most exported goods are exempt from VAT, you can get a refund for the VAT portion of the price of many purchases that you carry home from Europe with you.

How do you get these refunds, you ask? It’s simple. Read on.

How to Claim Your Refund

The particulars for VAT percentage rate and purchase threshold vary by European country (as we discuss below), but the process for claiming your refund is fairly consistent throughout the EU. Here’s a step-by-step guide to help you claim your refund.

1. Bring your passport. While some shops may not need to see your passport in order to start the VAT refund process, it’s best to have it to confirm your U.S. citizenship.

2. Shop at participating locations. Most stores that offer tax-free shopping will post a “Tax Free” or similar sign somewhere on the door or window of their place of business. These signs do not always say “VAT,” some other non-English terms indicating tax-free shopping include IVA, TVA, moms, and MwST. Your tour director will be able to inform you of the local term for this service.

3. Get the documents. Retailers participating in the VAT program will be familiar with the refund process, so be sure to ask the clerk to help you complete the proper tax-free paperwork. If they leave any blank spaces for you to fill out, make sure you know what information to enter. And don’t forget to take your receipt!

4. Get your refund – now or later. When your tour comes to an end and you head to the airport to go home, find a Customs Agent (at a specific desk) who will provide the required stamp on your VAT paperwork.  Once this is completed, locate the relevant refund service within the airport (likely either Global Blue or Premier Tax Free), who can complete your refund and give you the cash right there. If there isn’t an airport counter, you have several options. You can either mail your refund documents using a Tax Free mailbox located in the airport, or wait until you get home to mail them. 

5. Do your due diligence. If you mailed your documents, it can sometimes take a while for the refund to show up, either in your account or as a check in the mail. Check your statements to make sure that you’ve received your refund, and make sure to comb your mail for any unfamiliar envelopes.

VAT: the Fine Print

When shopping in the EU and hoping to take advantage of the VAT program, you must meet a minimum purchase threshold. You usually have to meet this threshold in one store, so you can’t add the cost of all your purchases together to meet the minimum requirement.

Further, each country imposes a different VAT percentage, which will tell you what proportion of the asking price you can expect to receive as a refund. To make this easier, the table below lists all the minimum purchase requirements and percentages for every European Union country to which we travel:

Country                

Minimum Purchase Requirement

VAT Rate

Austria

75.01 EU

20%

Belgium

50.01 EU

21%

Czech Republic

2,001 CZK

21%

Denmark

300 DKK

25%

Estonia

38.01 EU

20%

France

175.01 EU

20%

Germany

25 EU

19%

Greece

50 EU

24%

Hungary

54,001 HUF

27%

Iceland

6,000 ISK

24%

Ireland

30 EU

23%

Italy

155 EU

22%

Latvia

44 EU

21%

Liechtenstein

300 CHF

8%

Lithuania

55 EU

21%

Luxembourg

74 EU

17%

Netherlands

50 EU

21%

Norway

315 NOK

25%

Poland

300 PLN

23%

Portugal

61.35 EU

23%

Slovakia

175.01 EU

20%

Spain

90.16 EU

21%

Sweden

200 SEK

25%

Switzerland

300 CHF

8%

United Kingdom

30 GBP

20%

We hope this primer on VAT in the EU helps you save some money (and hassle) during your next European vacation.

Photo via Flickr