How to get VAT refund when travelling in Europe if you live outside the EU
If you live outside the EU and go on holiday in EU countries, you may be able to get a refund of the value-added tax (VAT) paid on certain items purchased during your stay.
The principle is that the tax is due on goods consumed in the EU and the system is used by governments to encourage tourist spending.
In this area, however, the rules are not the same across the European Union, so there are differences depending on where you go and what you buy. Who can benefit and how much can be claimed? Here are the basic things to know.
Who can obtain VAT refunds?
Only private individuals who live outside the EU can receive VAT refunds for goods bought for personal use (not for resale) during their visit.
The goods must be new – with tags – and unused on departure. Claims have to be made within 3 months from the purchase and be supported by the necessary forms.
How much can be refunded?
VAT rates vary across EU countries and can differ depending on the type of product. The EU’s average is 21.6%, according to the Tax Foundation. The highest VAT rates are in Hungary (27%), Croatia, Denmark and Sweden (25%), and the lowest in Luxembourg (17%), Malta (18%), Cyprus, Germany and Romania (19%).
Large shops usually offer VAT refunds via third parties such as Global Blue or Planet Tax Free, which will keep a commission on the final amount, so in these cases the reimbursement will be lower than the VAT paid.
Most EU countries also set a minimum purchase value to qualify for VAT refund, meaning a certain amount has to be spent to be able to make the claim. It is not possible to aggregate multiple purchases of lower amounts, each invoice must meet the minimum threshold. These are currently the minimum amounts set by EU countries, according to the Global Blue and VATfree websites:
- Austria EUR 75.01
- Belgium EUR 125.01
- Bulgaria BGN 50
- Croatia EUR 100
- Cyprus EUR 50
- Czech Republic CZK 2001
- Denmark DKK 300.01
- Estonia EUR 38.01
- Finland EUR 40
- France EUR 100.01
- Germany EUR 50.01
- Greece EUR 50
- Hungary HUF 68.001
- Ireland EUR 75
- Italy EUR 70.01
- Latvia EUR 44
- Lithuania EUR 40
- Luxembourg EUR 74
- Malta EUR 50
- Netherlands EUR 50
- Poland PLN 200
- Portugal EUR 61.50
- Romania RON 175
- Slovakia EUR 100.01
- Slovenia EUR 50.01
- Spain no minimal amount
- Sweden SEK 200
It is also worth noting that while there are no limits on the quantity or value of goods that qualify for VAT refund in the EU, there may be limits or duties to pay in the destination country.
Do all goods qualify for VAT refund?
VAT can be refunded on clothes, shoes, accessories, cosmetics, jewellery, electronics and many other items, but there are exceptions.
Products that are not eligible include tobacco, pharmaceuticals, cars and car parts, weapons, cultural relics, vintage or second-hand goods, postal stamps and digital content.
Also excluded are items used before departure or that are not brought back when leaving the EU, as well as those bought online.
Services such as transport, accommodation, hospitality or tours also do not qualify as they are used locally.
How to claim?
Usually stores that offer tax-free shopping display a logo on the window or at the cashier. Small shops might not be in a position to go through the procedure or participate in third-party schemes, and it is not mandatory for them to offer VAT refunds, so it is always good to ask in advance.
To benefit, it is essential to tell the shop before making the payment as the tax refund documents will be issued at that point.
The shop will need the customer’s passport and residential address to issue the invoice and the tax refund form. These will include a description of the purchased goods, price and VAT amount.
These papers and the (unused) goods in their original packaging will have to be shown to the customs officers at the final port of exit from the EU, together with the passport and travel ticket or boarding pass. Instructions are usually available on airports websites.
It is also possible to show items previously bought in other EU countries, as long as they qualify for refund and are accompanied by the necessary paperwork.
Only the person who made the purchase can make the claim.
If everything is in order, the customs officers will validate (digitally or with a stamp) the tax-free form. At some terminals, such as at Eurotunnel‘s, there might be self-validation kiosks.
The validated form can then be presented to the relevant counter for the refund, which can be paid on the credit card or cash. Some airports may offer a dropbox if there is no tax refund counter or the flight is late at night.
Usually the procedure is digital and carried out via third parties, which will handle documents and payment. Otherwise, it can be managed independently but it is more complicated, as it will require to download a tax refund form from the local customs website and return the validated invoice to the seller, which will process the reimbursement. In this case, the shop should advise on the steps to be taken.
Is VAT refund available in other European countries?
VAT refund is possible in other European countries. In Switzerland, the minimum purchase value is CHF 300, in Iceland ISK 12,000 and in Norway NOK 315 for permanent residents outside of Norway, Sweden, Finland or Denmark, or NOK 1,250 for permanent residents of Svalbard or Jan Mayen.
Travellers could get the VAT refund on goods purchased in the UK until 31 December 2020, but the scheme was closed after the post-Brexit transition. Currently, only Northern Ireland offers VAT refunds to visitors from outside Northern Ireland and the EU.
Claudia Delpero, Europe Street News © all rights reserved
Photo via Unsplash
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