Raise your hand if you've pictured yourself walking the cobblestone streets of Florence and popping in and out of the shops - and walking away with a gorgeous Italian purse? Glad we aren’t the only ones! You may not be aware that Europe has a tax that can add on quite a large percentage to the cost of your dream bag. Thank goodness, there's a way to save money when you lose yourself in an international shopping spree!
In the European Union (EU) a Value Added Tax, or VAT, is included in the final price you pay as a consumer. However, before you return home or go on to another non-EU country, you may be eligible for a refund on some of the taxed goods you purchased.
VAT refunds happen after you show proof of purchase, and only when you can prove that the purchase is leaving the EU. There are two major steps to filing for this refund. The first happens at the time of purchase within the store. The second happens at customs before you leave the EU.
While shopping in a store abroad, the shop’s employees will be your greatest help. Here’s what you need to do while shopping:
Ask a store employee prior to purchase if they are a VAT refund store. There may even be signs in the window of the shop saying “VAT- free” or “tax free”.
Find out if there is a minimum spend within the shop to qualify for the tax.
Inquire about an administrative fee. (The administrative fee would be deducted from the refunded amount).
The store may ask for your passport to prove you are not a citizen and for your ticket to prove you are leaving the EU. (You can show an e-ticket in most cases).
The store will provide you with a form to fill out and take with you to prove your purchase. Additionally, you will receive an invoice for the goods.
Keep the form you receive from the vendors until it is time to leave the EU. Your next step is bringing those forms to customs of the last country you leave before heading home. Show a customs officer your invoice as well as the forms you received from the shop, and they will stamp it for approval. Each form must be stamped to receive the refund.
Some refunds, especially in larger airports, happen immediately and within the airport - while others may be sent to your home address.
For further specifics before you make purchases during your travels, check out this official Guide to VAT Refunds.
Pro-tip: only buy as much as you can bring back in your luggage and on your flight. (Or you can be like us a bring an extra suitcase). For more information on packing and luggage, check out our other blogs linked below.
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