Have you lost your heart to a cashmere sweater that you saw in the window of a Paris department store, but don’t quite have the budget for it? Don’t give up yet. There’s a chance you may be able to knock up to 20% off the total shown on the price tag.
Visitors to Europe are not always aware that the advertised price of goods for purchase in the EU contains a built-in Value-Added Tax (VAT) that ranges from 15% to 25% depending on the country. So, how can this save you money on your next holiday? It’s simple: under certain conditions, non-European tourists are able to claim a VAT refund at the end of their trip for goods purchased in the EU. The process can be somewhat elaborate, and a refund is not always guaranteed. However, if you’re planning to make any substantial purchases while on holiday in Europe, the savings can be significant.
If you plan to claim a VAT refund, remember that a minimum purchase amount at a single retailer is usually needed to be eligible for reimbursement. You’ll then need to ask the retailer to fill out the appropriate refund document, usually called a “tax-free form,” when you make your purchase. You may also need to show the retailer your passport. Look the form over to make sure that all the important information is covered, attach your receipt, and keep the document in a safe place until you go home.
When you arrive at your point of departure, which may be an airport or other border crossing, take your form and your purchases to the local customs office (be sure to take this step before checking any of your luggage, as you may need to have your purchases available for inspection). A customs agent or export officer will then stamp your documents.
The final step will depend on the refund service used by the merchant where you bought your goods (your retailer can inform you about which service they use, and details will also be included in your tax-free form). Some of these services will have offices inside the airport. You can give them your stamped form directly to obtain your refund right away. For other services, you’ll need to mail in your form and wait to receive either a credit card refund or a check in the mail.
