How to claim Tax refunds while shopping in Europe?
The Complete Guide for getting VAT refunds while shopping in Europe for visitors.
Discover the Perks of Tax Refunds for Tourists in the European Union! This blog aims to provide you with comprehensive information about VAT Refunds within the European Union, ensuring you have all the details you need for an enjoyable shopping spree on your next European holiday.
After extensive travels throughout Europe, where we've indulged in shopping at the most luxurious stores, we've become well-versed in using our money wisely. Europe, undoubtedly the most fashionable continent, offers travellers numerous shopping opportunities that we never pass up. Our experiences have taught us how to save those hard-earned bucks while shopping abroad.
In this article, we will tell you all about the Tax refund process and guide you on how to claim a refund on your upcoming trip. So keep reading to make the most of your shopping experiences in Europe!
What Is VAT refund?
In the European Union, the Value Added Tax (VAT) refund is a system that allows non-EU residents, such as tourists, to claim reimbursement for the tax they have paid on goods purchased during their visit to EU member countries.
The standard VAT rate varies across member states but typically ranges from 17% to 27% of the item's price. When non-EU residents make purchases, they are charged the full VAT amount like any other consumer.
However, to promote tourism and make shopping more attractive for international visitors, many EU countries offer a VAT refund scheme. This means that non-EU residents who meet certain criteria can apply for a refund of the VAT they paid on eligible goods when leaving the EU.
The VAT refund system is designed to encourage international visitors to shop in the EU and enhance their overall shopping experience by providing an opportunity to save money on their purchases.
How to claim Tax refund
Master the hassle-free process of claiming a Tax refund in the EU with our easy-to-follow steps. We've compiled a comprehensive guide to help you get your money back without any trouble.
At the Store
Step 1: Make an eligible purchase - Start by making a qualifying purchase. Remember that not all purchases are eligible for a refund. Each country sets a minimum threshold, and only purchases exceeding that amount are considered for a VAT refund. For instance, Germany's minimum threshold is 25 Euros, while France's is 100 Euros. Check with the store beforehand to know the minimum amount required for eligibility.
(You can also look at the section: European VAT Rates and Minimum Thresholds)
Step 2: Ask for a Tax Refund Form - When making your purchase at the billing counter, inform the store employee that you want to claim a refund. They will assist you in filling out the Tax refund form, which includes details about your purchase, the refundable amount, and your passport information. So, remember to carry your passport with you.
Step 3: Choose refund method - You'll need to decide whether you prefer to receive the VAT refund in cash or back to your credit card. If you choose the credit card option, you must pay with the same card.
Step 4: Keep the documents - The store will provide you with the completed Tax refund form and the purchase receipt in an envelope. Keep it safe with you while you're in Europe, as you'll need it later.
At the Airport/Port of Exit
Step 5: Get the form stamped at Customs - Before leaving the EU, visit the Customs control at the airport (or port of exit) to have your receipts verified and the form approved for the refund. Be prepared to show the purchased items if requested by the customs officer. Once approved, the form will be stamped.
Note: In case you plan to exit European Union by train, you'll need to check if the boarding station provides this facility. Otherwise, you may need to get off at the last EU station on the route and complete the formalities. The process may vary depending on your route and local regulations, so it is advisable to check with the concerned authorities beforehand.
Step 6: Submit the Refund Form - After receiving the stamp from customs, head to the Tax refund counters. For cash refunds, the process is immediate and you'll have the money in your hands. If you're claiming a credit card refund, simply drop the form into a designated dropbox. Credit card refunds may take up to 3 months to be processed. Be aware that facilitators charge an administrative fee for processing the refund in all cases.
Note: Two main companies facilitate Tax refunds in Europe: Planet and Global Blue. Ensure you submit your stamped refund forms to the appropriate one. Different stores may be affiliated with different facilitators, but your form will provide the necessary information to submit it correctly.
Frequently Asked Questions(FAQs) about Tax Refund
We'll try to answer some of the commonly asked questions about VAT refunds and how it works. If you have more questions, feel free to drop a comment or DM us on Instagram.
1. Do I have to pay the VAT amount at the store? Can't I simply pay the amount excluding the Tax?
Paying VAT at the time of purchase is mandatory and there is no way around it. The refund is only issued after you follow the prescribed procedure and present the required documents.
2. Will I get the full VAT amount in the refund?
Most facilitators charge a flat administrative fee for processing the refund. This amount is retrieved from your total refund amount. You'll be entitled to receive the rest of the amount.
3. Do all shops offer VAT refunds?
Most popular stores do offer tax refunds. However, every store will not have a refund procedure in place. It is best to check at the counter to make sure they'll be able to issue a refund form.
4. Can someone else shop for me?
No. You need to be physically present at the store with a valid passport in order to obtain the tax refund form.
5. I have not received my refund. What should I do?
You should first contact the facilitator, for eg. Planet or Global Blue. They should be able to give you an update on the status of your refund. If it does not work, you can directly reach out to the company where you made the purchase as legally they are responsible for issuing the refund. It is a good idea to take a picture of your refund forms before submitting them so that you can easily raise your query.
6. Do I need to claim the refund in the same country of purchase?
No. You should apply for a refund at the location from where you are going to exit the EU. It may or may not be the same as the country of purchase.
7. How long before my flight should I reach the airport for a Tax refund?
It depends on how busy the airport is. We had our flight out of the EU from Schiphol Airport, Amsterdam which is one of the busiest in Europe. We reached the airport 4.5 hours before our flight and it took us 45 minutes to finish all the formalities for the tax refund.
European VAT rates and Minimum Thresholds
Below is a list of EU member countries along with their VAT rates and minimum thresholds for refund eligibility. We did not have this information during our travel but you do. So take full advantage of it.
Country | VAT Rate | Minimum threshold(local currency) |
|---|---|---|
Austria | 20% | 75 Euros |
Belgium | 21% | 125 Euros |
Croatia | 25% | 740 HRK |
Czech Republic | 21% | 2000 CZK |
Denmark | 25% | 300 DKK |
Finland | 24% | 40 Euros |
France | 20% | 100 Euros |
Germany | 19% | 50 Euros |
Greece | 24% | 50 Euros |
Hungary | 27% | 74000 HUF |
Italy | 22% | 155 Euros |
Netherlands | 21% | 50 Euros |
Spain | 21% | No minimum spend |
Switzerland | 7.7% | 300 CHF |
Note: The tax rates are set by individual countries and may change without notice.
Claiming the VAT refund while shopping in the European Union can be a rewarding experience for tourists. By following the simple steps we've outlined in this blog, you can make the most of your purchases and save those hard-earned bucks. Remember to check the minimum thresholds in each country and choose the appropriate refund method to suit your preferences. Whether it's exploring the fashionable streets of Paris or discovering the vibrant markets of Berlin, the VAT refund process ensures that your European shopping journey becomes even more enjoyable.
So, next time you embark on a shopping spree in the EU, confidently claim your tax refund and revel in the excitement of shopping abroad while being a savvy traveler. Don't forget to drop us a comment telling us all about your experience.
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