- When shopping in Europe, you can get a tax return; find out how
- Specific requirements apply such as minimum value of purchase
- The tax-free shopping system in EU countries is pretty much the same everywhere, but VAT varies along with some small details
Shopping is a big part of traveling. We all do it for fun, expecting to find something drastically different in the foreign land, drag it home, put it on display and show it off to our family and friends. Thing is, with the world becoming a global village and globalization permeating all spheres of life, it's getting harder to find authentic, locally crafted souvenirs or goods. Almost everything is made in China nowadays. That painful truth aside, Canadians and Americans are entitled to a tax refund when shopping in the European Union (EU) – see what you need to know and try to keep your eyes open if you wish to save some money, regardless of whether or not your new bag is made in China.
If you are unprepared, such a question coming from a European shopkeeper may leave you dumbfounded. VAT (Value Added Tax) is charged to the customer on purchase. It is similar to a sales tax - sort of like GST - but instead of being added at the register, it's built into the price. Depending on the country, VAT in Europe can vary from 5 to 25%, which is the case in most of Scandinavia. Non-Europeаn travelers have the option to get that money back. There are, however, some small details to be considered.
- The biggest VAT refund service is Global Blue (formerly known as Global Refund), which represents more than 270,000 merchants in 37 countries. Another possible refund company is Planet Payment, which is present in 21 countries and involves 75,000 merchants. It's important to note that you don't get to choose which firm should process your cheque. That's already been done by the retailer.
- Watch for the sign “Tax Free Shopping” or “Premier Tax Free”. It's usually on the store window, and there you may directly ask for a “tax-free shopping cheque”. The merchant can issue it, but be aware that there is a minimum value of purchase that entitles you to a tax return, and this depends on which country you are in. Check what's the amount in the country you're traveling to. Next, when you're ready to leave the EU, present the stamped check to the special refund service's airport desk or border kiosk for an immediate return. Or, when you get home, you can mail the check to one of the refund service's offices. The money can be credited to your credit card in Canadian dollars.
- Get a refund from the shop. You can ask for a VAT refund form, and upon your departure from the EU, have it stamped by a customs official. After that you can mail it back to the store and have the money transferred to your credit card account. Issuing a refund check is also an option. This is especially convenient when you're making bigger purchases. If the transaction is of a smaller amount, however, the fee of cashing a foreign-currency cheque may turn out higher than the refund. So in that case it wouldn't be worth the hassle.
- It is essential that you don't wait until you get home to start thinking about VAT refunds. Do your homework, learn how tax-free shopping works. Don't forget to ask for VAT refund forms or checks, and then remember to get them stamped at local customs before you leave the EU.
|Country||Minimum purchase||country||minimum purchase||country||minimum purchase|
|Belgium||125||Greece||N/A||Poland||200 Polish zloty|
|Bulgaria||300 per purchase (VAT must be least 50 per purchase)||Hungary||45000 Hungarian forint per purchase||Portugal||49.88|
|Cyprus||50 per invoice||Ireland||No minimum||Romania||N/A|
|Czech Republic||2000 Czech koruny||Italy||154.95 (including VAT)||Slovakia||Approximately 166|
|Denmark||300 Danish kroner (unless you are from Norway, then it is 1200 kroner)||Latvia||N/A||Slovenia||63 per purchase|
|Estonia||Approximately 160||Lithuania||200 Lithuanian litai||Spain||90.15|
|Finland||40||Luxembourg||74||Sweden||200 Swedish Kronor|
|France||175||Malta||55 per purchase or 315 total||United Kingdom||No minimum|
- No matter what, you will always have to show your receipts for your purchases to a customs officer at the airport along with the refund documents.
- Visitors have to prove that their country of residence is outside the EU, by showing a passport or other valid identification document.
- Whatever you buy, it must be exported from the EU within 3 months of purchase.
- Check each country's minimum value of purchase to make sure what amount qualifies for a refund.
- Tax-free status applies only to goods that are not shipped or sent by courier. You have to transport your purchases in your own luggage.
- If you carry €10 000 or more in cash (or its equivalent in other currencies), you must declare it to the customs authorities. The main reason for this regulation is to prevent money laundering and the funding of terrorism.
VAT in Germany is 19%, and there is no minimum value of purchase requirement. Again, look for that “Tax Free” logo on the window before you even enter the store. Global Blue offices are normally located at airport terminals. You will have the following options: receive the refund immediately in cash or have it applied to your credit card. The offices may also make a transfer directly to your bank account, or send a check to your home address. If you leave Europe through a German airport, you can show your receipts and tax-free cheques to customs officials and have them stamped before departure. Global Blue offices are located at Frankfurt am Main Airport, Berlin Tegel Airport, Munich, Hamburg and Düsseldorf.
By now, you should know the drill, it's pretty much the same everywhere. In France, most goods have 16,38% VAT. If you buy books, however, it will be only 5,21%. Antiques have a special rate and you need to make sure to ask on the spot. The minimum purchase amount is €175. To get your refund, look for Global Blue offices.
Most goods in Spain are levied at 18% VAT, except food items, books and optics, which have a 7% tax rate. Now, most shops in Barcelona are part of the Tax Free Shopping Service. However, many don't have the logo displayed on the window, so you have to ask in advance before you buy anything. The minimum amount you need to spend to even think of a tax refund is €90,15. Once your checks have been stamped by customs, you can cash them at any Bureau de Change in the currency you wish.
VAT of 21% applies to most consumer goods and luxury items, even alcohol, but basic goods and services have a 6% tax rate. The spending minimum here is €50. While at the shop, ask for that refund form and attach it to your receipt. You can have your money back through a Global Blue office; at a refund-service counter located at the airport or have the check posted to your home address.
Here, fashion items, textiles, jewelery, glassware, sunglasses, leather-wear, wine and other alcoholic drinks get taxed at 21%. Food has VAT of 10%, but books are not levied. The minimum purchase amount is €154,94 and you can accumulate receipts until you reach this sum on the same day and in the same store. Traveling is exciting, but bear those basics in mind if you want to save money and return home with some unique stuff nobody in your circle of friends has.
Check out our free tools for more useful information before your trip!