In Europe, goods and services are subject to a VAT of a minimum rate of 19% up to 27%, but it is a tax applied to residents. If you live outside the European Union, and if you do some shopping while traveling in Europe, you will pay this tax. But as foreigner, you can claim a refund. So, for a buy costing 3000 euros in France, you will really pay only 2400 euros with a deduction of 600 euros VAT.
Who can claim a VAT refund?
For EU countries, only persons residing outside the European Union are eligible for a VAT refund. In most European countries, you must leave the country in the three months following your buying to receive a refund.
How to get a refund of VAT?
VAT refunds are only possible for goods purchased, not for services and some countries have imposed a minimum purchase amount. In France, for example, you must spend a minimum of 175 euros on each receipt to get the VAT refund.
How to apply for a refund?
At the store, present your passport before making the payment.
You will receive a tax-free form to complete. In some cases, the refund is immediate.
If not, keep the form and receipts with your purchased items. You will need it at the airport.
Go to the customs service at the airport. The customs officer will inspect the items you have purchased and compared them to the receipt to confirm they match. That’s why it’s important to keep the products you have purchased packaged and unused.
After obtaining the customs agreement, go to the tax refund office to claim your refund immediately.
Place your document in the mailbox
If you don’t have time to spend at the airport, you can also process the refund by letter. It will take few months before getting your money back. All you have to do is to file all the forms and receipts, as well as a envelope with your name and address on it, and place your documents in a mailbox usually located at the customs office of the airport. That will allow you to receive your refund on your credit card or by check. Remember that the check might come in a foreign currency and you may be charged additional fees to cash it.
Use a refund tracker
Europe has two major tax refund organizations: Global Blue and Planet. The stores where you bought your items may work with these refund services. You will usually find their offices at the airport or by internet. This is a convenient way to process a VAT refund because you get it immediately in cash, but these companies usually charge you 4% for the service. The refund will be made in the currency of the country you’re leaving. You can ask to have your money back in another currency, but the exchange rates used are not the most favorable. There is also an option to credit the refund on your credit card.