traveller vat refund

How to get your maximum VAT refund when traveling abroad

While a European vacation is undoubtedly an unforgettable experience, it can be expensive.

That's why savvy travelers have various strategies in place to save money on flights, hotels and rental cars (hopefully by reading some of TPG's great money-saving advice ).

One of the most overlooked ways travelers miss out on saving money is by forgetting to apply for a VAT refund.

VAT is a Value Added Tax . Let's say, for example, you just went on a shopping spree in Rome or splurged on gifts at the El Corte Ingles department store near Las Ramblas in Barcelona. You more than likely paid VAT on your purchases, but the good news is that visitors to the European Union can often get a refund on that tax. Think of it as the traveler's tax break.

Despite the obvious savings that can come with VAT refunds, the amount of money Americans leave on the table each year in unclaimed refunds is estimated to be in the billions. Don't be one of those travelers.

Getting your VAT refund is worth the time and effort it takes, especially if you're traveling within the EU .

The rules surrounding VAT refunds have somewhat changed in recent years, so it's important to read up on the latest rules (including the U.K.'s discontinuation of VAT refunds for international visitors since Brexit). Here's everything you need to know about getting your maximum VAT refund when traveling in Europe.

What is a VAT?

VATs and goods and services taxes (GSTs) are common worldwide; more than 160 countries have them.

In the EU, the VAT is similar to the sales taxes imposed in the U.S., but there are also some big differences. One of the biggest: VAT rates are much higher than those you pay in state and local sales taxes in the U.S.

The EU's minimum standard VAT rate is 15% — far more than the combined state and local sales tax rates you'll find anywhere in the U.S. However, the average standard VAT rate in the EU currently sits around 21%. All EU countries have standard VAT rates above the 15% threshold; Luxembourg has the lowest rate at 16%, and Hungary has the highest at 27%.

"The VAT is a major income revenue for the tax authorities in Europe," said Britta Eriksson, a VAT expert and CEO of Euro VAT Refund , a Los Angeles-based company that helps companies manage VAT in their overseas operations. "[VAT] represents almost as much as the income tax in terms of revenue for the government."

Many EU countries offer lower VAT rates on certain goods. Sweden, for example, has a standard VAT rate of 25%. However, for some food items, restaurant services and even hotels, a reduced VAT of 12% is offered.

France has reduced the VAT on certain agricultural products and even some cultural events to 5.5%. In other nations, items such as books, newspapers, and bike and shoe repairs receive a reduced VAT rate of only 6%.

As you can see, these "special rates" vary from country to country, so make sure you do your homework before your trip. The EU also exempts some goods and services from VAT; some exemptions include educational services, financial services and medical care.

What are the refund rules?

Prices in the EU always have the VAT included. If you're visiting an EU country, you'll generally have to pay the price of an item, VAT and all, and get your refund after the fact.

There are several requirements to follow to claim your refund. For instance, you must take your new item or items home within three months of the purchase. VAT refunds are not available for large items like cars. EU visitors also cannot get a VAT refund for services like hotel stays and meals.

Some countries require that your purchase exceeds a certain amount to be eligible for a VAT refund. Like the VAT rates, this minimum purchase amount varies from country to country.

For example, in France, the minimum amount is now 100.01 euros (about $107) for the total amount of purchases you buy on the same day in the same shop. In Belgium, the minimum is 50 euros (about $54); in Spain, there is no minimum purchase amount to claim a VAT refund.

One important thing to note is that you can only claim a VAT refund on new items. Your merchandise must be new and still in its packaging when you leave Europe. The goods can't be unpacked, consumed or worn. If you want to claim your refund, you should pack away whatever you purchase and wait until you get home to open it.

Getting your refund

Thousands of European stores do what they can to accommodate tourists seeking refunds and will usually have signs in the window reading "tax-free" or "VAT-free" shop.

As you pay for your item, inform the clerk that you're an EU visitor and intend to get a VAT refund. The store will have some paperwork for you to fill out. Have your passport ready to prove your visitor status. You may also need to show your airline ticket as proof you're leaving Europe in the allotted time in order to claim a VAT refund.

Some stores will refund your VAT, but in most cases, you'll likely have to take your refund forms and get your refund processed elsewhere.

Many stores work with third-party agencies, such as Global Blue or Planet , to process VAT refunds, and these agencies usually have facilities in major cities where you can take your completed forms and get your refund.

When purchasing your items, check to see if your merchant is partnered with these agencies.

On departure day, be sure to take your receipts, the refund forms the shops filled out, the items you bought and all your other travel documents with you to the airport so that you can present everything to customs.

If you're touring multiple EU countries during your trip, you'll complete this process at the last EU country you visit. That means if you visit France and Italy before ending your trip in Spain, you will apply for the VAT refund on your purchases in Spain.

Customs may inspect your purchases, so make sure they're available and not in your checked baggage. Also, make sure the goods are unused and unworn.

If all goes well, the customs office will stamp your refund forms. If either the store or one of the third-party refund agencies has already given you your refund, you'll have to mail this stamped form back to them to prove you left Europe within the mandated three-month period. Otherwise, you risk having your refund canceled and your credit card charged for the VAT you owe.

If you haven't done so already, you can also get your refund at the airport. The big refund agencies have facilities at all the major EU airports, sometimes at a currency exchange. Just show them your stamped customs forms and your passport to get your refund, minus a fee.

No VAT refund in the UK

Before we share some advice on getting your VAT refunds, we want to remind everyone that the U.K. no longer has VAT-free shopping for international tourists. In fact, Great Britain is now the only European country that doesn't offer the savings opportunity for international visitors.

The VAT retail export scheme was eliminated when the U.K. exited the EU in 2021. It resumed briefly before being axed, supposedly for good, in 2022.

Although there's some optimism that VAT refunds could return to Britain in the future — the U.K.'s tourism industry is lobbying for its return — it's not an option for now.

While VAT refunds are no longer available in England, Scotland and Wales, you can still claim refunds if you're visiting Northern Ireland. There are also several exceptions and rules to know; for example, it doesn't apply to services like hotel bills. You can find the list of restrictions here . You should also be aware that some merchants and refund companies in Northern Ireland charge a fee for using tax-free shopping. Still, if you're planning a visit, you could save some money on your shopping.

Tips for maximizing your savings with a VAT refund

Here are some do's and don'ts for getting your VAT refunds.

Research the country

Before your trip, look up the VAT rules for the country you're visiting and check the standard and reduced VAT rates, as well as the minimum purchase points.

As we mentioned earlier, the rates and rules of what qualifies for a VAT refund can vary depending on where you visit, so make sure you're aware before you get there.

Remember that many countries outside the EU also charge a VAT, and their refund policies can differ greatly from what you'll find in Europe.

Research the store

Stores aren't required to provide VAT refund assistance of any kind.

"If you have a store that doesn't have this program, then getting a refund is very complicated," Eriksson warned.

Keep an eye out for stores displaying "tax-free" or "VAT-free" signs. Ask the store employees which third-party agencies they partner with for refunds. Also, ask how they process refunds and what fees they charge. As we noted above, some retailers in some countries may charge a fee to visitors using tax-free shopping.

Allow extra airport time for your refunds

Don't expect to be the only traveler at the airport seeking a VAT refund before heading home. Expect to wait in line for a bit. Plan ahead and give yourself extra time at the airport, as the line can be long.

If you're strapped for time after leaving customs, some agencies will let you drop your stamped forms in one of their mailboxes, and they'll issue your refund later.

Consider shipping your purchases home to avoid VAT entirely

If you don't want to deal with any of this stuff, Eriksson suggests another option.

"You can also have the store ship [your items] to you directly," she said. "Then, they won't charge you VAT."

But there's a catch.

"You still have to pay for the freight," Erikkson added.

Shipping costs from Europe to anywhere in the U.S. can get wildly expensive. So, you have to weigh that shipping cost against the VAT and the time and effort it would take to get your refund to decide if it's worth it.

Make sure the refund is worth the trouble

"If you buy expensive clothing and china, then it's absolutely worth it," Eriksson said.

While many VAT countries have purchase minimums for refunds, in others, any purchase a visitor makes qualifies, no matter how small. So, you should ask yourself if it's worth applying for a VAT refund for that cheap tchotchke you bought as a souvenir.

Bottom line

All this talk of forms, looking for signs, standing in line and getting stamped can take the impulse out of your impulse buy. However, it could save you a lot of money in the long run.

If you pay attention and budget your time wisely, you might get back enough money through VAT refunds to help pay for your next visit across the Atlantic.

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This Travel Hack Can Help You Save Hundreds of Dollars While Shopping Abroad

Go ahead . . . buy that expensive european designer bag. you may get some cash back thanks to this handy travel tip..

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When it comes to VAT refunds, the more you spend, the more you can get back.

Photo by AboutLife/Shutterstock

If you’ve never heard of the VAT refund, get ready to see some serious financial returns the next time you go shopping abroad. If you’re looking for the best price on a high-end item, you might be able to save thousands of dollars by waiting to buy it overseas. (Discount luxury shopping: It’s not an oxymoron.) Here’s the breakdown on how to save money with VAT.

What is VAT?

VAT—sometimes redundantly called VAT tax—stands for value-added tax. This tax is associated with shopping in the European Union, though more than 160 countries around the world use value-added taxation. It’s a sales tax paid by consumers (not businesses), and it doesn’t exist in the United States. Only visitors—including U.S. tourists—are able to qualify for a VAT refund.

Keep in mind, VAT is often factored into the price of a product (so a €100 dress with a 20 percent VAT rate might have a price tag of €120). Other times, it is listed on the receipt. Ask a sales associate wherever you’re shopping if it’s unclear.

The rate of VAT in Europe varies depending on where you’re visiting and shopping, and it ranges from 7.7 percent in Switzerland (technically not an E.U. country, and it’s set to increase its VAT to 8.1 percent in 2024) to 27 percent in Hungary. The average VAT rate in the E.U. is 21.3 percent , and the minimum in the E.U. is 15 percent. Deloitte provides a very useful country-by-country breakdown .

But rates can also vary depending on what you’re buying. For example, food and pharmaceutical products are typically taxed at a lower rate than leather goods like shoes and handbags.

Can you get a VAT refund in the U.K.?

It depends: Travelers were allowed to do so throughout the U.K. up until December 31, 2020, but Brexit put an end to VAT refunds. Currently, the only country in the region that offers VAT refunds to overseas visitors is Northern Ireland.

If you’re hoping to buy luxury goods in Europe—good news. You could qualify for a VAT refund.

Courtesy of Ira Komornik/Unsplash

What qualifies for a refund?

Almost all luxury goods—including clothes, shoes, cosmetics and skincare, jewelry, handbags, leather goods, and art—will have a value-added tax. Many items qualify for a VAT refund, but it’s important to note that only new goods (not used) can be claimed. Each transaction also has to be over a certain threshold, and this threshold varies by country. For instance, you have to spend over €100 per transaction in France to qualify for a VAT refund. This means you can buy several products at one store for a total of more than €100, but if you spread those same items out over multiple stores, you would not get to claim the refund. You can also make a single large purchase over €100 at many different stores and claim for each transaction.

Your items are supposed to be unused when you declare them. That said, you can typically get away with using your new handbag or coat. But you may want to hold off on breaking in those new leather slingbacks before you present them to customs. You also will want to ensure that items you are declaring are recent purchases because you must make your claim within three months of leaving the European Union.

Items that do not qualify for a VAT refund

• Vintage items —Those vintage Chanel clip-on earrings you bought from the Marché aux Puces de Saint-Ouen? The (probably very good) price you paid is final. No refunds here.
• Goods purchased in the tax-free zones of airports —because there is nothing to refund
• Transactions that do not meet the minimum threshold
• Services —including hotel stays, restaurant meals, and tour guide fees—because these are experienced abroad and not brought home
• Anything you aren’t bringing back to the United States . The goods have to come home with you.
• Cars — unless the vehicle is being used exclusively for business purposes, in which case you can get up to 50 percent back on your VAT
• Alcohol and tobacco
• Counterfeit items —This may seem obvious, but a faux Dior tote does not qualify for VAT (and in France, purchasing a counterfeit is a criminal offense).

Keep in mind: Vintage items are not eligible for VAT refunds.

Photo by Kamil Macniak/Shutterstock

What you need to do while shopping

• Make sure you have your passport with you before you start shopping —you’ll have to provide proof that you are a visitor . If you’re shopping specifically to get a discount, ask the shop if it participates in VAT refunds and if it has a specific purchase-amount threshold. On occasion, smaller shops and boutiques do not participate, therefore you will not be able to get a VAT refund on that purchase. It’s best to know before you start shopping.
• Ask for paperwork at each place you shop —the sales assistant, cashier, or store manager should have information. Occasionally, stores can process a refund for you on site (called “instant refund”), but most use Global Blue, Premier TaxFree, or another third-party to handle the refund process. [Author’s note: I shopped at some of the largest stores in Paris—Le Bon Marché, Liberty, Louis Vuitton, Chanel—and was unable to get the instant refund at any of them.]
• Don’t leave the store without signed, official documents. Many department stores have a VAT office, such as Galeries Lafayette Haussmann in Paris. These offices will help you get your paperwork sorted. Staple your receipts to your forms, and keep them in a safe place so you can access them when you’re claiming your refund.
• Ask for a second receipt. You may want this for U.S. customs upon your arrival home.
• Try to group purchases at boutiques into one transaction , because you may get a higher rate of return. Don’t buy a bag at Hermès and then come back later to get a scarf. If you can, buy them both at the same time.

The VAT refund should be processed at your final port of departure when you’re leaving the E.U.

Courtesy of Unsplash/Getty Images

How to collect your refund

When you’re ready leave the E.U.—your last port of departure—make sure you have your goods ready to declare and your paperwork completed, then head to the airport well in advance of your flight. Keep in mind, if you’re traveling around multiple European countries, you do not go through this process each time you leave and go somewhere new within the continent (even if you’re going to a non-E.U. country, like Norway or Switzerland).

The refund process is completed on your final departure when you’re headed home. Your forms should have instructions on what steps to take (and where to go), but here’s what to do.

• Find a VAT counter. You’ll want to identify your options in advance of your flight so tracking them down is easier on the day of your travel— Moneycorp , Planet , and Global Blue are fairly common. Check your individual airport’s website for more information; some will have detailed instructions specific to their location.
• Some airports may offer a dropbox when there’s no one there to check your paperwork. This is relatively rare, but you may run into a situation where there’s no one at the counter to take your paperwork. Look for a drop box where you can take your completed paperwork for processing. The downside here is that it can add time to the process if anything is filled out incorrectly or information is missing. So make sure to double-check everything before making the drop.
• Once you’ve arrived at the counter, present your completed forms and paperwork alongside your passport and boarding pass to the employee. You may need to present certain purchased goods, particularly if they’re over €1,000. At this point, if you do have a larger purchase, you will likely be sent to the local customs office to have an officer see your goods and give you a customs stamp. If that step doesn’t apply to you, an employee will stamp your documents at the refund counter and either mail them off or hand them to you to drop into a mailbox.
• Choose your refund delivery method. You receive your refund either in cash or as a direct credit back on your credit card. Cash refunds are faster but typically have a higher fee. Credit card refunds can be slower but usually get more money back. Sometimes the refund is instant, sometimes it takes five days, sometimes it takes months. Keep your paperwork in case you have to track down your refund. If you haven’t received information in six weeks, it’s time to contact the agency.

Now for the less fun news: You do not get the full 15–20 percent VAT refunded. There are unavoidable processing fees that unfortunately cut into the final refund amount, but typically it’s a small charge. You can get an estimate on the Global Blue website of what your refund might be.

VAT is a value-added tax on goods purchased within the European Union.

Courtesy of Jacek Dylag/Unsplash

How this affects your travel home

• Consider adding at least two hours to your travel time when declaring your goods at an airport VAT counter.
• Repack your items into your checked bag after you present them for your refund.
• In addition, you have to declare your goods when you come back to the United States , and a customs officer may want to see your items if you’ve spent over $800. You may also have to pay duty, depending on the value of your purchase and the size of your party. The first $800 (per person) is tax free, the $1,000 after that is taxed at 3 percent, and beyond that the rate is variable.

Can I just go to the duty-free airport shops?

Yes, but often the products are only slightly discounted from what you’d see outside the terminal. You’ll save more money if you go through the VAT refund process.

Make sure to declare any goods purchased abroad that are worth over $800 to U.S. Customs.

Courtesy of Arturo Ray/Unsplash

How to maximize VAT savings

At this point you may be thinking that’s way too much effort for a few bucks. To that end, you’d be right—sometimes this is too much if the rate of return is small. The best way to maximize your VAT refund is on larger purchases like luxury items or a group of items at one store.

• Buy something made in the country you’re visiting. Purchasing a Louis Vuitton purse in France will save you a significant amount of money compared to buying the same purse in the United States.
• Travel with family. The United States allows $800 per person of duty-free goods. If you travel with a family of four, that’s $3,200 collectively of U.S. tax–free import.
• Don’t try to avoid U.S. customs tax authorities if your purchase is over $800. This is tax fraud, and you can be fined a major penalty and lose Global Entry status. Your VAT refund is connected to your passport number, so do yourself a favor and go through the process.
• Pay in euros or use a credit card with no foreign transaction fees so you don’t incur unnecessary charges.

Some travelers have managed to save substantial amounts on certain luxury goods. Others have had less success, despite following instructions to the letter. But if you’ve spent a lot on souvenirs in Europe, you’ll at least want to try to get that VAT back to offset the duty you’ll pay in the United States.

VAT refunds

This page deals only with refunds for cross-border transactions – where the VAT is incurred by people or businesses not based in the EU country concerned.

It does not address the "standard" situation of VAT refunds where both vendor and customer are based in the same country.

For refunds, we need to distinguish between 3 different situations:

• Cross-border VAT refunds to EU businesses
• VAT refunds to non-EU businesses
• VAT refunds to foreign tourists

Cross-border VAT refunds for EU businesses

Most businesses who incur VAT in connection with their activities in an EU country where they do not habitually supply goods/services (and so are not required to register for VAT) are nevertheless entitled to deduct that VAT ( Articles 170-171a VAT Directive ). This ‘deduction’ is made by means of a refund from the EU country where they paid the VAT.

How to get a VAT refund To avoid potential language problems, claimants send an electronic refund claim to their own national tax authorities – who then forward it to the EU country where the claimant incurred the VAT (once they have confirmed the claimant's identity and VAT identification number, and the validity of their claim).

If the tax authorities in the EU country where they incurred the VAT are late in making the refund, claimants are paid interest .

Procedure to follow Summary of VAT refund procedure (including responsibilities of national tax authorities at each stage).

Full rules – Directive 2008/9/EC .

Implementing Regulation 79/2012 - additional information the refunding country may need on claimant’s business activity and nature of goods/services acquired .

Who can get a VAT refund? To qualify for a refund under this procedure, during the refund period a business must NOT have :

• been based in the refunding EU country or
• exempted transport & ancillary services ( Articles 144, 146, 148, 149, 151, 153, 159 or 160 VAT Directive ) or
• supplies to customers liable for payment of the related VAT under the reverse-charge mechanism ( Articles 194-197 or 199 VAT Directive ).

The claimant's home EU country will not forward the claim to the refunding EU country if the claimant:

• is not a taxable person for VAT purposes
• only makes exempt supplies without right of deduction
• is covered by the special scheme for small businesses
• is covered by the flat-rate scheme for farmers.

EU country specific information

• Country-specific VAT guides (Vademecums) – limitations on the right to deduct VAT (e.g. restaurant costs, entertainment activities, cars, fuel)
• VAT refunds - country guide (Vademecums) – variations in the VAT refund rules in each EU country.
• EU countries using the business activity codes contained in Commission Regulation No 79/2012

These documents have been endorsed by national tax authorities of the EU countries in the Standing Committee on Administrative Cooperation and are available in English only . They are intended as guides only – for full, up-to-date details of the rules, contact the relevant national tax authorities .

Other guides

• VAT refunds – information requirements in EU country of refund .
• VAT refunds – common problems & solutions .
• VAT refunds – online tutorial.
• VAT refunds – contact points of the competent national authorities

VAT refunds for non-EU businesses

Businesses not based in the European Union who incur VAT in connection with their activities in an EU country where they do not habitually supply goods/services (and so are not required to register for VAT) are entitled to deduct that VAT. This ‘deduction’ is made by means of a refund from the EU country where they paid the VAT.

How to get a VAT refund Claimants must send an application to the national tax authorities in the EU country where they incurred the VAT – see VAT refunds - country guide .

Procedure to follow Full rules - Directive 86/560/EEC .

Who can get a VAT refund? To qualify for a refund under this procedure ( see Article 1 Directive 86/560/EEC ), during the refund period a business must NOT have :

• been based in any EU country or territory or
• supplied goods or services in the country where they incurred the VAT – except:
• services to customers solely liable for payment of the related VAT under the reverse-charge mechanism ( Articles 194, 196 or 199 VAT Directive ).

EU country-specific conditions Any EU country may:

• refuse to refund VAT in this way if the claimant’s country/territory does not grant reciprocal refund rights for VAT or similar to businesses based in that EU country.
• impose restrictions on the type of expenditure qualifying for refunds
• insist that the claimant appoint a tax representative.

VAT refunds for non-EU tourists

EU retailers can provide a VAT refund for goods sold to non-EU tourists when exporting them. Specifically this covers:

• Tourists whose permanent address or habitual residence (as stated in their passport or other recognised identity document) is not in the EU.
• EU nationals living outside the EU (who can prove this with a residence permit or similar).
• The tourists must provide proof of residence (e.g. non-EU passport or residence permit)
• The goods must be taken out of the EU within 3 months of being bought. The tourist must provide a stamped VAT refund document proving this.
• The value of the goods bought must be above acertain minimum (set by each EU country).
• Retailers can either refund the VAT directly or use an intermediary. One or other of them may charge a fee , deductible from the refunded VAT amount.

More on VAT refunds for non-EU tourists

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Defending your rights to a VAT refund

Complete Guide to VAT Refund for Visitors in France

Are you planning a trip to France and wondering how to claim a VAT refund on your purchases? As a visitor to France, you may be eligible to buy goods tax-free and get a refund on the Value Added Tax (VAT) you paid during your stay. This guide will walk you through the process of obtaining a VAT refund step by step, making your shopping experience in France even more enjoyable (cheaper).

Country VAT rates

20% Standard VAT rate

10% Medicines and pharmaceutical

5.5% Food and books

2.1% Reduced rate for certain products and services

Minimum spend 100,01 euro . (or combined invoices, use an app!)

VAT Refund Calculator for France

Vat refund guide for france.

See French Customs Flyer (English)

1. Check Your Eligibility: Ensure that you are eligible for the VAT refund . To qualify, you must meet the following criteria:

• Be a non-EU resident.
• Have spent less than six months in the EU.
• Be at least 16 years old.
• Make purchases for personal use, not for commercial purposes.

2. Carry Your Passport or non-EU-resident card

Always carry your passport with you while shopping. Your passport will be needed as proof that you are a non-EU resident eligible for the VAT refund.

3. Check vendor for VAT Form capabilities, Request an Invoice & VAT Tax Refund Document

While making your purchase, ensure you get an itemized invoice from the store. The invoice should include details such as the store’s name, your purchases, the total amount paid, and the VAT amount.

Ask the store for thea VAT Tax Refund document, also known as a tax-free form. This form will be crucial for processing your VAT refund. The form must be signed by both the retailer and you.

Before You Check-in your luggage/departure:

6. Stamp/Validate your VAT Refund form at a Customs Office at the place you are leaving the European Union.

If France is not your last country in Europe you go to before going back home, stamp your tax form in the country you will leave from . May it be Italy, Spain or another EU member state.

(Most Customs Offices / PABLO are found before the passport control . So go there before you check in your luggage, so you can show your bought items).

Before departing France, stamp your VAT refund document at a customs office at the airport or train station. These days, most forms go through an electronic machine and system called ‘Pablo’. You will only have to scan your form (or digital form or helping app) and you are done!

Keep the items with you when passing the customs office for your tax exemption stamp. You may be subjected to a test if you actually are taking the claimed items with you abroad. In case you cannot show them, a refund will not be given and you risk getting a fine .

Understanding Tax Refund Calculations

Understanding how tax refunds are calculated is crucial. While it might seem that a 20% VAT refund would result in a 20% reimbursement from your purchase, it’s not quite that simple. The calculation follows this pattern: Starting with 100 Euro + 20% equals 120 Euro. However, 120 Euro – 20% doesn’t equal 120 Euro. Instead, it’s 120 Euro – 16.66% which equals 100 Euro.

Keep in mind that the tax refund amount will be further reduced after accounting for administration fees.

7. Anticipate Your Refund

You can expect to receive your VAT refund within the next 30 to 90 days, up to 6 months in case of the holiday season (June-August). The refund will be credited to the same credit card you used for the eligible purchases.

8. Enjoy Your Savings !

Once you receive your VAT refund, enjoy the extra savings from your tax-free shopping in France!

Happy shopping and bon voyage!

Understanding the VAT Tax Refund Process

Steps for obtaining vat tax refund.

Start Your Shopping Spree! Spend €100.01 or More at a Single Store or Department Store Request an Invoice for Your Purchase Get a VAT Tax Refund Document Ensure You Carry Your Passport Stamp your Tax document Before Leaving France/EU Validate Your Tax Refund Documents at the Airport, Train Station or Port of departure Keep Your Purchases Accessible for Customs Inspection Anticipate Your Refund! Within the Next 30 – 90 Days, Receive Your Refund on the Original Credit Card Used for Purchase. It can take up to six months when you submit during summer.

From the French Customs ‘ website:

If you travel by international train

You must have the tax refund slips stamped during the trip or at the border station (on leaving the European Union) by the customs service.

If you are traveling on a ship or an international road vehicle

You must have the tax refund slips endorsed by the customs services at the last port or at the road exit point from the European Union.

If you leave the European Union via a Member State other than France

After checking, the customs service of this Member State will return the document to you.

Locations of French Customs PABLO VAT Stamp terminals:

Location of Pablo terminals deployed in the french country (pdf)

Question & Answers

Q&A: VAT Refund in France

Who is eligible for a VAT refund in France? Non-EU residents who have spent less than six months in the EU, are at least 16 years old, and make purchases for personal use (not commercial purposes) are eligible for a VAT refund in France.

How much VAT refund can I expect to receive? On average, you can expect a 12% refund on your eligible purchases (with a commercial VAt refund processor). However, certain items such as pharmacy goods offer a 10% refund, and food and books provide a 5.5% refund.

What is the minimum purchase amount required to qualify for a VAT refund? The minimum purchase amount to qualify for a VAT refund varies, but it is usually around €175. Some stores may have different minimum spend requirements, so it’s best to check with them beforehand.

How do I request a VAT refund form? When making a qualifying purchase at a store displaying the “Tax-Free Shopping” or “Detaxe” logo, ask the cashier for the VAT refund form and present your passport as proof of eligibility.

Where do I get the VAT refund form stamped? Before leaving France, you must get the VAT refund form stamped by the customs authorities. You can do this at the airport or at designated customs offices in major cities. See locations .

Can I get an immediate refund at the store? Some large department stores offer on-the-spot refunds at a slightly lower rate (around 10.8%). However, for the standard refund process, it may take several weeks to months to receive the refund.

Do I need to keep my purchases accessible? Yes, it’s essential to keep the purchased items with you and accessible, as customs officers may want to verify them when you request the VAT refund.

Can I use a VAT refund app for the process? Yes, there are VAT refund apps available that allow you to process the refund digitally from your mobile phone. This can help consolidate purchases from different shops and avoid the minimum spend restriction per transaction.

Can I claim a VAT refund if I have a layover in another EU country? No, you must process the VAT refund in the country you leave from, not where the layover occurs.

What if I forget to submit the VAT refund form at the airport? If you forget to submit the VAT refund form at the airport, you can still request a refund by following specific steps and submitting the necessary documents to the French Customs authorities within six months of purchase.

• June 28, 2023

A Step-by-Step Guide to Getting VAT Refunds While Shopping in Europe

Table of Contents

Hey there! Have you ever heard about those amazing tax refunds you can get by shopping in Europe? It’s a fantastic way to save money, but if you have no idea how to get them, don’t worry—I’ve got you covered! In this guide, I’ll walk you through the entire process of getting a VAT refund while shopping in Europe. I’ll also share my personal experiences to make it easier for you to navigate. Let’s dive in!

How does VAT works in Paris?

Understanding VAT

First things first, let’s talk about VAT. VAT stands for Value Added Tax, and it’s automatically included in the price of everything you buy in Europe. Unlike in the United States, where taxes are added at the time of purchase, in Europe, the tax is already included in the displayed price. The VAT percentage can vary from country to country. For example, France and England have a VAT rate of 20%, while Italy’s VAT rate is 22%. If you want to know the VAT rate of a specific country, you can easily find a list online.

Who is Eligible for a VAT Refund?

As a non-EU resident, you are eligible to get a portion of the VAT back on your purchases. The process works like this: when you shop at a store that offers VAT refunds (many luxury stores do), you can qualify for a refund if you spend €175 or more in that store. It’s important to note that different stores might use different VAT refund programs like Global Blue or Premier Tax-Free, but the process remains the same regardless of the program used.

Reaching the Minimum Threshold

Now, let’s say you plan to make several small purchases that don’t individually reach the €175 threshold. In that case, I recommend visiting a department store that houses various brands. By collecting receipts from all your purchases, you can reach the required threshold, even if you didn’t spend €175 with a single brand. Stores like Selfridges, Harrods, Liberty, or Galeries Lafayette are excellent options. For instance, you could buy a bag for €95 from Longchamp and then head to Gucci to purchase a scarf or a wallet for €100. When you add up those two purchases, it totals €195, surpassing the minimum threshold.

VAT for business in Europe

The VAT Refund Process

Once you’ve made your purchases, it’s time to start the VAT refund process. If you’re shopping at a department store, they usually have a dedicated area for VAT refunds. Simply head there with all your receipts. The staff will consolidate your receipts into a single document and provide you with a form for the VAT refund from that department store.

If you’re shopping at a standalone boutique like Chanel or Louis Vuitton, you can go directly to the register. The cashier will assist you in filling out the necessary paperwork. Make sure to have your passport with you, as they’ll require your passport information for the refund process. In most cases, they’ll provide you with the receipt for your purchase and separate forms for your tax-free documents.

Cash Refund or Credit Card Refund?

At the point of refund processing, you’ll be asked whether you prefer to receive your refund in cash or via credit card. Each option has its pros and cons.

If you choose a credit card refund, you’ll get a higher refund amount, as fewer fees are deducted. However, the refund might take a bit longer to be credited back to your card. It’s worth noting that the exchange rate at the time of credit might affect the final refund amount.

On the other hand, if you choose a cash refund, you’ll receive the cash at the airport immediately. This means no waiting for weeks or months. However, the refund might take a bit longer to be credited back to your card. It’s worth noting that the exchange rate at the time of credit might affect the final refund amount.

On the other hand, if you choose a cash refund, you’ll receive the cash at the airport immediately. This means no waiting for weeks or months. However, keep in mind that there will be a service fee deducted from your refund amount, which varies depending on the refund company. The cash refund option is particularly useful if you’re leaving the EU from an airport where there are VAT refund counters.

Getting Your VAT Refund Form Stamped

Before leaving the EU, you must get your VAT refund form stamped by customs. This step is crucial as it proves that you are taking the items out of the country. Look for the customs office or desk at the airport, usually located after the security check-in but before the boarding gates. Present your purchases, receipts, and passport to the customs officer. They will inspect the items and stamp your refund form. It’s essential to ensure that you have enough time before your flight to complete this process, as queues at the customs office can be long, especially during peak travel times.

Submitting Your VAT Refund Form

Once your form is stamped, you have two options for submitting it: either by using a mailbox or at a refund counter. If you have chosen a credit card refund, you can simply drop the stamped form into the mailbox provided. If you prefer a cash refund, you’ll need to locate the VAT refund counter. These counters are usually located near the departure gates, and they are operated by the refund companies like Global Blue or Premier Tax-Free.

At the counter, present your stamped form, receipts, and passport. The staff will verify your documents and process the refund. If you chose a cash refund, you’ll receive the refund amount in the local currency or another currency of your choice. Remember to keep the refund receipt provided by the staff, as you may be required to show it at the boarding gate along with your items.

Final Tips and Recommendations

• Plan your shopping strategically to reach the minimum spend threshold for VAT refunds.
• Keep all your receipts organized and in a safe place.
• Familiarize yourself with the VAT refund process of the specific stores or refund companies you plan to use.
• Allow sufficient time at the airport for customs stamping and refund submission.
• Double-check the accuracy of your refund form, ensuring your passport information is correct.
• Consider the pros and cons of cash and credit card refunds before making a decision.
• Be aware of the service fees associated with cash refunds and factor them into your calculations.

Remember that VAT refunds are a privilege for non-EU residents, so take advantage of the opportunity to save some money while enjoying your shopping experience in Europe. Safe travels and happy shopping!

What Comes After you decide between Cash refund or Credit Refund?

Once you’ve decided whether you want a cash refund or a refund on your credit card, you can proceed with the process. When making your purchases, make sure to let the cashier know that you want a VAT refund. They will provide you with the necessary paperwork.

On the day of your departure, as you head to the airport for your international flight, remember to allocate extra time for the refund process. It’s recommended to arrive at least three hours early, especially during peak tourist seasons or when major events are taking place. This will ensure that you have ample time to complete the refund procedure.

Upon reaching the airport, locate the VAT refund office, usually situated outside the security check-in area. Bring all your purchases and paperwork with you. At the office, you’ll find kiosks where you can input your passport information and scan the barcodes on your documents. The screen will either flash green, indicating that everything is in order, or red, signaling that further verification is required.

If you receive a green light, you can proceed without any additional steps. You won’t need to show your items to anyone, and you can simply scan the documents, leave, and continue your journey. However, if the light flashes red, you’ll need to present your items and paperwork to an officer at the window. They will review your documents, stamp them, and verify that you’re exporting the items out of the country.

After the verification process, you’ll either need to mail the stamped forms or get a cash refund, depending on your chosen option. If you selected a credit card refund, you can drop the stamped forms into the designated mailbox. The refund will be processed, and it may take anywhere from one week to six weeks for the amount to appear on your bank statement.

If you opted for a cash refund, you’ll need to visit a separate window designated for cash refunds. Present your scanned or stamped forms, and they will assist you in receiving the cash refund. Remember to seal your paperwork in the provided envelope and deposit it in the large post boxes located in the VAT refund area. These boxes are usually brightly colored and easy to spot.

Now, all you have to do is wait for the refund to be processed. Keep an eye on your bank statement, as the refund amount should appear once the processing is complete. Congratulations! You’ve successfully saved money through the VAT refund process.

To ensure your eligibility for a VAT refund, remember these key parameters:

• Non-EU resident: Only non-EU residents are eligible for VAT refunds.
• Minimum spend: Your purchases must exceed the minimum spend threshold, which is typically around 175 euros.
• Timely departure: You must leave the country within one month of the purchase date.

Keep in mind that not all items are eligible for a VAT refund. Only tangible, non-consumable items that can be exported out of the country qualify. Additionally, Switzerland, Norway, and Turkey are not part of the EU, so if you make purchases in these countries, you’ll need to file your VAT refund paperwork there before leaving for another country.

One important tip is to avoid placing luxury purchases in your checked baggage. Keeping them with you as carry-on items ensures their safety and allows for potential verification if required. Checked luggage can get lost, items can go missing, and fragile items may be damaged. Taking care of your valuable purchases personally is the best way to protect them.

Vat Refund for EU-Residents

If you’re a resident of the EU and you’re looking to save money on tax refunds, there’s a great way to do it—by purchasing items duty-free at an airport. One of the main airports for duty-free shopping is Heathrow in London, which offers a wide range of stores. Even if you live in London or anywhere else in the EU and you’re flying out of a major airport with plenty of stores you like, you can shop there and automatically save 20% by taking advantage of the duty-free prices. This applies to American citizens as well, who can shop at Heathrow without having to worry about tax refunds because they’ll be saving on taxes upfront.

However, there is a caveat when it comes to specific items. If you’re looking for something like a limited-edition or hard-to-find item, chances are it won’t be available at the airport. In that case, you would still need to go through the tax refund process.

It’s important to note that there are other fees involved when shopping overseas, such as customs and duties fees when you return to the US. While you may have saved money on taxes abroad, you may still have to pay taxes on those items once you’re back in the US. Currently, each person is allowed $800 in tax-free purchases. If you’re traveling with a group or family, each person is entitled to that $800, regardless of who made the purchases. For example, if three people are traveling together, they would have a total of $2,400 to spend without worrying about additional fees. Any amount exceeding the $800 limit per person would be subject to customs and duties fees, which are currently set at 3%.

While the customs and duties fees may not seem significant for smaller purchases, they can add up if you’re buying expensive items. For instance, if you buy an Hermès Birkin bag for $10,000, the fees will increase accordingly. Keep in mind that the VAT refund process is the main focus here, so I won’t delve into too much detail about customs and duties. However, if you have any questions about them, feel free to let me know in the comments section below.

Real Example on Vat Refund

Now, let’s dive into some real-world examples of how much you can save by shopping in Europe. People often choose to shop in Europe not only for the VAT refund but also because the actual prices of items are often lower compared to other regions. It’s crucial to keep a close eye on exchange rates, especially if they are fluctuating significantly, as even a small difference can affect your overall purchase price. Let’s look at some numbers to illustrate the savings.

During my recent trips to Europe, I made purchases from Chanel and Louis Vuitton, so I’ll provide examples from these brands. You can check the exact prices of items online by visiting the brand’s respective websites for the country you’re interested in, such as the French Louis Vuitton website (FR.louisvuitton.com). This way, you can see the prices in euros and calculate the exchange rate and potential refund amount in advance.

Here are the details of my purchases:

• Card holder: 300 euros, VAT refund: 50 euros
• Boy bag: 3,980 euros, VAT refund: 663.33 euros Total purchase price: 4,280 euros Total VAT: 713.33 euros Actual refund received: 556.40 euros Savings: $754.44
• Louis Vuitton:
• O Case: 420 euros, VAT refund: 70 euros Total savings: $129.04
• Passport holder: 225 euros, VAT refund: 37.50 euros Total savings: $49.29

To calculate the savings in US dollars, I used the exchange rate at the time of my purchases, which was 1 euro = 1.19 US dollars. Please note that exchange rates fluctuate, so it’s essential to check the current rates before making any calculations or decisions.

In total, by shopping in Europe and taking advantage of the VAT refund, I saved approximately $932.77 on my purchases. These savings can vary depending on the items you choose, their prices, and the VAT rates in different countries.

Remember that the VAT refund process involves certain steps and requirements. You’ll need to present your passport, complete a VAT refund form, and show your purchased items at the customs office upon leaving the EU. The refund can be obtained in cash at the airport or through a credit card refund, depending on the specific refund service provider.

It’s crucial to keep all the necessary documents, such as receipts and refund forms, as you’ll need them during the refund process. Additionally, some stores might have a minimum purchase requirement to qualify for a VAT refund, so be aware of those conditions.

Lastly, if you’re planning to make significant purchases, it’s advisable to familiarize yourself with the specific VAT refund procedures and regulations of the countries you’ll be visiting. This way, you can ensure a smooth and successful refund process.

Please note that the information provided here is based on my personal experience and may not reflect the current VAT rates or refund policies. It’s always best to double-check with the official sources and consult the customs and tax authorities of the countries you plan to visit for the most up-to-date and accurate information.

I hope this information helps you understand the potential savings when shopping in Europe and utilizing the VAT refund process. If you have any further questions, feel free to ask!

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• 309 , Cash refund or credit card refund , Customs and duties fees , Duty-free shopping at airports , Getting VAT refund form stamped , Minimum spend threshold for VAT refund , Non-EU resident VAT refund , Real-world example of VAT refund , Shopping in Europe , Submitting VAT refund form , Tips for VAT refund process , VAT refund counter , VAT refund Europe , VAT refund for EU residents , VAT refund process , VAT refund process at the airport

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General information on VAT refunds for travellers

Find out when you are entitled to a VAT refund on purchases made in Spain, how to obtain it.

Can a tourist residing outside the European Union who has made purchases in Spain recover the VAT paid for said purchases?

Yes, as long as you reside in a country that does not belong to the European Union, or are resident in the Canary Islands, or in the Autonomous Cities of Ceuta and Melilla, and also meet the following requirements:

• The tourist who proves his identity and residence outside the European Union at the time of purchase.
• The purchases are documented on an invoice and on an electronic refund document (DER) sent to the Tax Agency.
• The purchases must have been made on the Spanish mainland or in the Balearic Islands, excluding purchases made in the Canary Islands or in the cities of Ceuta and Melilla.
• The goods must not constitute a commercial shipment, i.e. they must have been acquired on an occasional basis and intended for the traveller’s personal use or that of their family members or offered as gifts and which, by their nature and quantity, cannot be presumed to be the object of a commercial activity.
• The goods purchased must actually leave the territory of the European Community within three months of the date of supply.

Likewise, deliveries of goods intended for the equipment or provisioning of any means of transport for private use are excluded from this regime (e.g. Tires and fuel).

How can you recover the VAT paid in Spain for purchases made by a non-resident traveler in the European Union?

For the refund of VAT fees borne by non-resident travelers in the territory of the European Union, these must have previously been passed on and documented in invoices. The seller must also submit an electronic refund document (DER) to the Tax Agency.

In Spain there are two systems for the recovery of fees previously paid by non-resident travellers. These two systems are freely chosen by the traveller at any time:

• Directly through the shop. The traveller sends the electronic refund document endorsed by Customs to the supplier, who will refund the full amount charged within fifteen days by cheque, bank transfer, credit card or other means of proof of reimbursement. The period that the traveler has to send DER endorsed by Customs to the supplier is the general four-year period of prescription of the supplier's right to rectify the fees passed on. After this time, the supplier has no obligation to return the VAT .
• Through Collaborating Entities authorized by the AEAT . In this case, travellers shall present the electronic refund documents endorsed by Customs to these entities, which shall pay the input VAT on the acquisition of the goods minus the corresponding authorised commission. The traveller must agree to such a return. Subsequently, the Collaborating Entities will send the electronic refund documents endorsed by Customs to the suppliers who will make the corresponding reimbursement, in this case in full.

The reimbursement of VAT to travellers by the Collaborating Entity shall be made by cash, credit card, cheque or bank transfer.

For the purposes of refunding VAT under the traveler regime, how is habitual residence proven?

Travellers must have their usual place of residence outside the territory of the European Union. With regard to evidentiary documents, there is freedom of proof. Habitual residence outside the European Union may be proven by any means of proof admitted by law. It is the traveler who must prove by any legally valid means of proof that he is actually a resident outside the European Union. As an example, you can provide a passport, an identity document, a certificate of registration in another country, a certificate of registration in the Consular Registration Registry of Spaniards residing abroad, Green Card  or any other resident card from a state outside the European Union.

Citizens of the European Union (i.e. nationals of a Member State holding a passport from that Member State) who reside permanently in a non-member country of the Union may also benefit from the Article 21 exemption. 2 of the VAT Law and can request a refund of the tax. This is also the case of Spanish diplomatic and consular personnel residing in countries not belonging to the European Union.

The seller will always verify the traveler's identity and residence outside the European Union at the time of sale. This obligation must be materially fulfilled by the seller in all cases and at the time and place in which the purchase is made.

At this point, it is worth mentioning Sentence number 1687/2022 of the Supreme Court, Contentious-Administrative Chamber, Second Section. The Court considers that: “(…) to prove the habitual residence of the purchaser, for the purposes of applying the exemption for export of goods under the traveler regime provided for in article 147.7 of Directive 2006/112/ EC of the Council, of November 28, 2006 and 21.2.A of Law 37/1992, on Value Added Tax, the provision of the passport is not enough, as contemplated in article 9.2.Bb) of Royal Decree 1624/ 1992, of December 29, which approves the Value Added Tax Regulation, when it does not indicate the habitual residence or domicile of the recipient of the deliveries of goods, it being necessary in this case, additionally, to present other means of proof that prove the habitual residence of the traveler. In any case, it is up to the seller or supplier of the goods, subject to VAT, to verify whether the document presented by the traveler to be able to enjoy the exemption contains information on the traveler's habitual residence or domicile, and may, where appropriate, be said document, the passport, the identity document or any other means of proof admitted by law. "

The requirements demanded by the Value Added Tax regulations to be able to enjoy this tax benefit must be met at the time of its accrual (moment of making the goods available to travelers), so the habitual residence was of the European Union must be a fact at that time.

For the purposes of the refund of VAT under the traveler regime, what is meant by "that the goods purchased do not constitute a commercial shipment"?

To the effects of this law, goods carried by travellers will not be considered a commercial shipment as long as they are an occasional purchase, for the traveller’s personal use, that of their family, or to be offered as gifts, or as long as their nature and number does not lead to conclude they are aimed at a commercial activity..

The rule does not determine any quantitative threshold above which goods are considered to constitute commercial dispatch. It will therefore have to be analysed on a case-by-case basis.

In what payment method will the refund of the borne VAT contributions be made effective in the traveler regime?

If the traveller chooses to obtain reimbursement directly from the supplier, the supplier shall reimburse the full amount charged within fifteen days by cheque, bank transfer, credit card or other means of proof of reimbursement.

If the traveler opts for the refund of the VAT installments through a Collaborating Entity authorized by the Tax Agency, the VAT refund to travelers will be made in cash, card credit, check or bank transfer. When the refund is made in cash, it shall necessarily be made in euros.

What type of goods can benefit from the refund of VAT under the traveler regime?

The mechanism provided for the refund of the Value Added Tax to travelers must be understood as directed to the goods acquired by them and that are going to be transported “in the personal luggage” of the travelers, and therefore not applicable to other cases of goods. that are subject to transport to a third territory outside the personal luggage of travelers. Likewise, goods intended for equipment are excluded from the exemption from VAT (example: tyres, fuel) or refuelling of any means of transport for private use.

Only goods purchased which actually leave the territory of the European Union are eligible for reimbursement. Therefore, the exemption does not apply to services of any type (accommodation, car rental, restaurants...) nor to goods that are consumed totally or partially in the territory of the Union (drinks, chocolates, perfumes).

It is important to keep in mind that the approval of the electronic reimbursement document (DER) is carried out or not in its entirety, in such a way that, if only some of the goods included in a DER come out Indeed, the condition of effective departure of all goods is not met and, consequently, it will not be validated.

If goods are acquired which can be consumed, in order to benefit from the exemption and be eligible for a refund of input VAT, these goods must leave the territory of the European Union in the same state as when they were acquired.

The VAT exemption for the supply of goods under the traveller's system excludes the supply of goods for the purpose of equipment (example: tyres, fuel) or refuelling of any means of transport for private use.

Which document does the seller have to provide to the traveller to be stamped at the exit customs?

The seller must issue the corresponding invoice and also an electronic reimbursement document (DER), both at the time of purchase. The DER is available at the electronic headquarters of the State Tax Administration Agency, in which the acquired goods and, separately, the corresponding tax will be recorded.

The following traveler information must be entered in the electronic reimbursement document: identity, country of residence, date of birth and passport number of the traveler.

The collaborating entity or the selling store must check the visa of DER , as a prerequisite for making the refund. It must also inform the Tax Agency that the refund has been made.

The copy of the form delivered ( DER ) to travelers will have a CSV (secure verification code) with which the traveler will always be able to know the processing status of their request for the return of VAT , at all times. By consulting the procedures on this page.

It is important to keep in mind that the DER provided to the traveler must contain a barcode or a QR code for subsequent reading at the time of sealing, (the copy of the screen of the computer with which the form is issued to the Tax Agency).

What is the maximum time the traveller has to leave the European Union from the time of purchase?

It is a condition for the refund of input VAT on purchases of goods by non-resident travellers in the territory of the European Union that the goods actually leave the territory of the Union within a maximum period of three months following the purchase. VAT Directive 2006/112/ EC states more clearly that goods must be transported "outside the Community before the end of the third month following that in which the delivery is made" .

• Deadline: 5 May (confirmed by date of invoice)
• Effective date of departure: Before 31 August.

Spanish invoicing regulations allow entrepreneurs and professionals to issue summary invoices. Thus, different operations carried out on different dates for the same recipient may be included in a single invoice, as long as they were carried out within the same calendar month.

Where the sale of the goods being exported corresponds to a summary invoice, the three-month period shall run from the date of the latter document.

What is the maximum time to request a refund of VAT SUPPORTED once the proof of departure has been stamped?

The traveler may request a refund of the VAT incurred on their purchases in Spain, provided that they meet all the legally required requirements and that the electronic refund document (DER), which proves their purchase, is correctly endorsed by the customs office of departure.

The maximum period for requesting a refund is the general four-year limitation period, coinciding with the period of the supplier's right to rectification of the charged amounts. After this time the supplier is not obliged to refund the VAT.

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• Travel tips

Maximize your travel budget: all about the VAT refund

• 1. What stands for VAT? 
• 2. How does the VAT refund process work? 
• 3. Can somebody else go shopping for me and ask for the VAT Tax refund?
• 4. Do the goods have to be brand new?
• 5. What if I don’t receive my VAT refund? 
• 6. An example case: traveling to Spain reclaiming your VAT tax refund

Traveling across Europe is an enriching experience, but expenses can quickly add up. However, there exists an opportunity to gain back some of the expenses in the form of VAT refund . In this article, we'll delve into the intricacies of how the VAT refund process works in Europe , what it takes to qualify, and how to make the most of this advantage. Are you going to be traveling in Europe? Then learn all about the VAT tax refund. 

Don’t forget to get the correct visa before your trip. If you need a visa for your trip you can rely on Visagov . Visagov’s services allows you to get multiple visas for over 50 countries with a simple form in your language. 

What stands for VAT? 

VAT stands for value-added tax , is a sales tax that everyone pays when purchasing a product. As a traveler from a non-European Union country who may be returning home or traveling to another non-EU country, you may be eligible to purchase goods free of VAT at special shops .

You are considered a visitor and therefore can try to buy goods free of VAT if you permanently or usually live in a country outside the EU . This will be proved with your address in your passport or identity document. European Union citizens who permanently live in a non-EU country are also eligible for the VAT refund. 

How does the VAT refund process work? 

The process of the VAT refund is quite straightforward. While the process will highly depend on the shop that processes the whole VAT refund , here are some general steps you can expect:  

• In a shop, ask the shopkeeper whether they provide the VAT tax refund . Shops that offer the VAT tax refund service usually will display a “Tax-free” or “VAT-free” sign in the window.
• If they do so, ask what threshold applies to the purchase. You must spend above a certain amount of money in order to be eligible for VAT refund (this depends on the country). You can enquire national tax authorities on the thresholds applicable in a specific EU country. 
• At the check-out, you will have to show proof that you are a visitor to the EU. Passports or ID that shows your residence outside the EU will be sufficient. In some cases, you might be asked to show your ticket as proof you will leave the EU.
• You will have to fill in a form with the necessary details . The shopkeeper will fill in the shop’s part of the form.
• Make sure you understand how you will receive the refund . In some cases, the shop will refund you. In other cases, the shop will use a third party to organize the refunds.
• Ask about whether the shop has an administrative fee for this service .
• Keep your invoice for the goods , the refund form, the goods and any other documents safe. You will have to show all of these are customs officers of the last EU country you leave. The customs officers must stamp the form as proof of export (if not you won’t get a refund). If you don’t receive the stamp, you must contact the entity in which you bought goods.
• Follow all steps outlined in your refund document, by customs authorities or by the shopkeeper. In larger airports or ports, you can claim your VAT refund immediately if the shop where you made the purchase offers this service (you will receive your refund on the spot). Otherwise, you will need to mail the refund form to the address provided by the shop.

Remember if you're going to visit different countries in the European Union, you will have to do the VAT refund process in the last airport or port (some certain train stations might also do it, but ask in advance the national authorities or your refund company on the arrangements applicable) you visit before leaving the EU.

After completing all formalities you will get the VAT refund . Keep in mind that it is unlikely you will receive all the VAT refunded, since in many cases there can be an administrative charge for the service in the shop. 

You cannot pay the VAT-free price in the shop directly while buying the goods. 

Can somebody else go shopping for me and ask for the VAT Tax refund?

The short answer is no. You must purchase the goods yourself and complete the VAT  tax refund process. Also know that not all shops offer the VAT refund arrangement and not all products can qualify as VAT-free (goods to be exported as freight, for example, and cars and yachts and others are excluded).

Do the goods have to be brand new?

You are not supposed to use your goods before leaving Europe . In fact, customs officials may specifically ask to see "your unused products" to verify your exporting of purchases. Some retailers will even staple and seal the shopping bag to prevent you from circumventing this rule.

We recommend  taking out the products for which you are seeking a VAT refund from your checked luggage . You must show all products to customs when leaving to the EU. 

All goods must accompany you when you leave the EU. The goods you purchase VAT-free must exit the EU before three months have elapsed from the date of their purchase .

What if I don’t receive my VAT refund? 

You can complain to the shop where you bought the goods because it is the main responsible to give the refund . Nevertheless, if that company used an intermediary you may first apply to them. The European Commission does not intervene in particular cases of VAT refund. 

An example case: traveling to Spain reclaiming your VAT tax refund

In Spain you will have the option of getting VAT refund in multiple stores and for multiple products following a simple procedure. You just have to ask the shops  to provide you with the DIVA (electronic VAT refund procedure) form, and validate it directly at the automatic terminals installed in Spain’s main ports and airports.

When you are returning to your home country , be sure to always carry: your passport, receipts or DIVA form for your purchases, the goods and your boarding pass.

At customs you will then have to reclaim VAT tax refund . You can choose to go through the Tax Free management body located where you are departing (usually you will be refunded then and there) or directly at the shop where you made the purchases (you will have the amount within 15 days).

The VAT you can find in Spain may vary from other countries in the EU . In fact, the VAT ranges from 8 to 27% across the EU. The UK, after Brexit, is no longer part of the VAT refund policy for tourists. Also, keep in mind that Switzerland, Norway, and Turkey are not part of the EU. Therefore, if you shop in one of those countries, make sure to get your documents stamped before you leave.

Catherine Carey

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Value-Added Tax (VAT): What It Is, Who Pays

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If you’ve ever traveled outside the United States and done some shopping, chances are you’ve noticed a VAT, or value-added tax, on your receipts. Here’s what VAT is, how it works, and how you might be able to get your money back.

What is value-added tax (VAT)?

A value-added tax, or VAT, is a tax on products or services when sellers add value to them. In some countries, VAT is called goods and services tax, or GST. Similar to a sales tax or excise tax, consumers pay the VAT tax, which is typically a percentage of the sale price. There is no VAT in the United States.

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How value-added tax (VAT) works

Value-added tax is typically a percentage of the sale price. For example, if you purchase a pair of shoes for $100, and the value-added tax rate is 20%, you would pay $20 in VAT at the register when you pay for the shoes.

The value-added tax rate varies by country.

Some countries exclude certain goods or services from the tax.

The European Union requires that an EU country’s VAT rate must be at least 15%. Some things qualify for a reduced rate, which has to be at least 5%. [0] European Taxation: Taxation and Customs Union . VAT rates . Accessed May 17, 2023. View all sources

Although businesses may pay value-added tax on the goods and services they buy, they generally get to recoup those payments from the VAT they collect from their customers. The businesses then remit what’s left to the government.

Is there VAT in the U.S.?

There is no VAT in the United States. But even though the United States doesn’t have a value-added tax, it does require consumers to pay federal excise taxes on the purchase of gasoline, alcohol, tobacco and other products. In addition, several states and cities collect sales taxes. Intuitively, the concepts are similar in that they are all taxes on consumption. The difference is in how the tax is collected. Over 100 countries have a VAT.

» MORE: See how to deduct sales tax on your income tax return

How to get a VAT refund

If you visit a country that has a VAT, you might be able to get a refund on the tax you pay when you shop there. Beware: There are a lot of steps, and some travelers decide the refund process isn’t worth the trouble. Here are some of the general rules, but before you travel, be sure to check the VAT rules in the country you plan to visit.

Typically, you have to pay the value-added tax at the time of purchase, and then apply for a refund from the shop.

Usually, your purchase must be over a certain amount in order to qualify for a VAT refund. In the EU, for example, you have to buy at least 175 euros worth of stuff in a shop. [0] European Commission: Taxation and Customs Union . Guide to VAT refund for visitors to the EU . Accessed May 17, 2023. View all sources The threshold isn’t cumulative, meaning that spending 100 euros in one shop and 100 euros in another shop doesn’t meet the minimum. It may be worth it to consolidate your shopping if you’re angling for a VAT refund.

Spending on food and hotels often isn’t eligible for VAT refunds.

You usually have to be a visitor to get a VAT refund. The address on your passport matters here. You might qualify as a visitor if you’re living in the country temporarily but have a permanent home somewhere else.

You’ll likely need to show the store clerk proof that you live outside the country, and you’ll have to fill out a form.

Some shops don’t offer VAT refunds. Some shops process the refund directly, and some shops use third parties to process the refund. Ask for written instructions about how to claim your VAT refund.

Sometimes the shop charges a fee for VAT refunds, so be sure to ask about that ahead of time.

Usually you’ll need to mail your stamped VAT refund form to an address the shop provides. But you don’t always have to wait to get back home. Some big airports, ports and train stations have VAT refund offices where you can get your refund right away — if the retailer you shopped at uses that office.

When you go home with your stuff, a customs officer has to stamp your refund paperwork as proof of export. Without the stamp, you won’t get your VAT refund.

On a similar note...

How to get a travel tax refund when leaving the EU

Every year visitors to Europe lose millions of Euros in unclaimed tax refunds because they either don't know they can claim it back or because they might find the process too involved.

This is rather regrettable because when you buy virtually something in the European Union (EU) you will pay as much as 25% VAT - and in many cases, travelers from outside Europe can claim a tax refund when returning to their home country. In what follows we will tell you exactly what you need to know and do to save yourself a lot of money next time you visit Europe.

What exactly is VAT?

The term VAT refers to value-added tax, a consumption tax that is paid by consumers when they buy certain items or services. It is not the same as a revenue or income tax.

When you visit Europe and buy products and services, the price typically includes VAT. Locals of course pay the same tax, the difference is they can't claim anything back.

What is the VAT rate in Europe?

In the EU (European Union) the value added tax rate typically varies between 5% and 25%, depending on which country you are in. Some EU countries also apply different VAT rates to different types of products and services. These are often categorized as either super-reduced, reduced, or standard.

If, for example, you travel to France, certain products will include VAT at 2.1% while on others the VAT rate will be 5.5%, 10%, or even 20%.

VAT rates for each European country (as of April 2023) 

Below is a summary of the VAT rates of the various European nations, including Schengen area countries , and the minimum amounts you have to spend to be able to claim a tax refund when you leave.

• Austria (20%) (€75.01)
• Belgium (21%) (€125.01)
• Bulgaria (20%) (250 BGN)
• Croatia (25%) (740 HRK)
• Czech Republic (21%) (2,001 CZK)
• Denmark (25%) (300 DKK)
• Estonia (20%) (€38.01)
• Finland (24%) (€40)
• France (20%) (€175.01)
• Germany (19%) (€50.01)
• Greece (24%) (€50)
• Hungary (27%) (74,001 HUF)
• Iceland (24%) (11% on food & books) (6,000 ISK)
• Ireland (23%) (€75)
• Italy (22%) (€154.95)
• Latvia (21%) (€44)
• Lithuania (21%) (€55)
• Luxembourg (17%) (€74)
• Malta (18%) (€100)
• Netherlands (21%) (€50)
• Norway (25%) (315 NOK)
• Poland (23%) (200 PLN)
• Portugal (23%) (€61.50)
• Romania (19%) (250 RON)
• Slovakia (20%) (€100.01)
• Slovenia (22%) (€50.01)
• Spain (21%) (€0.01)
• Sweden (25%) (200 SEK)
• Switzerland (8%) (300 CHF)
• Turkey (18%) (118 TRY)

What does a VAT refund involve?

The term VAT refund refers to the authorities refunding the amount of VAT a visitor from outside Europe paid on products bought while visiting the region. If the product qualified for a refund and the VAT rate is 25%, for example, these travelers will be able to get the full amount of the tax refunded when they leave the EU again.

What types of products qualify for a VAT refund

The exact products on which you can claim a VAT refund differ from one country to the next. The general rule is that this only applies to items that can fit in your luggage. If you bought a new car in Europe, for example, the VAT on this is non-refundable. On the other hand, there is a minimum purchase price to qualify for a VAT refund. See the list above for more details.

Certain products and services are also not included, for example, tobacco products, hotel bills, and services.

When do I qualify for a Value Added Tax refund?

To qualify for a VAT refund you should not be a permanent resident of a European country and you must have bought the products while visiting Europe.

If you live outside Europe on a permanent basis, you will typically be regarded as a 'visitor' for the purposes of a VAT refund when you travel to one or more European countries. In these cases, you are not liable for VAT, which is why you are allowed to claim a refund. When you buy merchandise or goods in Europe and take it back to your home country, this is viewed as an export - and exports from Europe are VAT exempt.

To qualify for a VAT refund, your purchases should be more than a certain amount. This also differs from one EU country to the next, but in the majority of cases you must spend at least that amount in a particular location. If the minimum, for example, is 100 EUR, you can not spend 10 EUR at 10 different locations. It has to be 100 EUR at a single location.

Will I get my Value Added Tax refunded before I leave Europe, or afterward?

To claim the VAT refund, you will have to depart from Europe. Merely crossing an internal border between two countries is not enough. To qualify as an export, the items you bought have to leave Europe.

Do items I bought online qualify for a tax refund?

The answer here is yes, visitors do qualify for a VAT refund even on items they bought online. Similar rules to offline shopping apply: you must live outside Europe and the amount of your purchase has to be higher than the minimum determined by the country where the online store is located.

What you need to know about getting a refund for Value Added Tax

The procedure often differs slightly from country to country, but generally speaking, this is what you will have to do:

[1] Make sure you can provide proof of where you live

To kick off the refund procedure, you will be asked to show some form of identification that proves that you do not live in the EU. Your passport should in the majority of cases be all you need.

[2] Do the necessary paperwork

Ask the shop owner to assist you with filling out the relevant tax-free form. Double-check the information to make sure it's correct and do not lose your receipts! Tourism-savvy shop owners often offer an on-the-spot refund as an added service. It's not hard to find those: they typically display a 'tax free' sign outside their shop.

If the shop owner provides a direct cash or credit card refund, you are most likely going to pay a (relatively small) fee for the service.

[3] Make sure you know what to do when you get to the airport

You should take your refund forms, receipts, and the items you bought with you to a VAT office at the airport. Allow enough time before your flight departs. If the merchant didn't give you an instant refund, you might get your tax refund at the last stop before you leave the EU.

That is not the end of the story though. To qualify for a VAT refund, you will have to prove that the items you bought have left the EU. This means that you will not be able to claim a tax refund on the VAT you paid if you are merely leaving one EU country on your way to the next one.

[4] Look for the customs office

This can take quite a bit of time, so make sure you arrive early to your departure point. There are often fairly long queues in front of the customs office. The best is to complete this step even before you go to the check-in counter with your luggage. That is because the customs agent might want to confirm that your purchases qualify for a refund. Once this office has cleared your purchases. they will put a customs stamp on your forms to make it official.

To qualify for a VAT refund, the items you bought have to be new. You can not get a tax refund on used products. To prevent any misunderstanding regarding this, rather refrain from using any of the items on which you would like to claim a tax refund. If it looks like it's been used a hundred times, customs might refuse to reimburse you.

You will often also be asked to show the items you bought when you get to the customs office. That is why you should rather not pack any of them in the luggage you are going to check in. This is particularly relevant if you plan to go to the customs office after you have checked in your luggage.

How long will it on average take before I get my refund?

You are definitely not getting your money right there at the customs office. If you bought anything at a shop that works with a specific refund service agent, you have to look for their office or desk when you get to the airport. Take the stamped documentation with you. Just remember that in this case you are going to pay a modest commission.

If you did not buy from one of these retailers, you will have to send the refund documentation via snail mail and wait until you get a response. If you paid for your purchases with a credit or debit card, remember to check your bank statements regularly.

It normally takes around 3 weeks before the VAT refund will show up in your bank account. Cheque payments also take around three weeks to get processed.

Can't I purchase items in Europe without having to pay VAT?

Unfortunately, that is not possible. The VAT will always form part of the purchase price and you will not be allowed to buy anything without this.

The best scenario is if you buy from a merchant that offers direct refunds. Yes, it will take a bit longer than usual because there will be more paperwork involved, but you won't have to wait as long to get your tax refund.

Another option is asking the shop owner to send the products you bought to your home address. In most instances, however, this will not benefit you financially because you will have to pay for the shipping costs and there could also be import duties involved once the products get to your own country.

There is only one way in which you can totally sidestep paying Value Added Tax and that is to buy everything at duty free shops. Unfortunately, these are mostly located at international airports and their prices can be high.

To get a refund, do I have to leave the EU directly from the country in which I bought the items?

Not at all. You can purchase your gifts and souvenirs in one European country and after that visit as many other EU countries as you wish, provided you stay within your time limit. When you finally decide to go back to your own country, you should, however, have the products you bought in the EU with you in case the customs officer wants to check them before he or she stamps your documents.

What is the situation if I am going to leave the EU by train?

You should be able to get your VAT refund forms stamped at the last train station. To do this, you will in most cases have to get off the train when it arrives at the station and find the customs office.

If you are lucky though, a customs officer will board the train before it gets to the border. Whether or not this will happen depends on the route of the train and the individual country's internal procedures. Your best option is to ask at the station when you buy the train tickets.

Schengen visas and ETIAS

Currently, citizens from about 60 countries do not have to apply for a Schengen Visa to visit Europe. The majority of the rest have to apply for such a visa before they are allowed to enter the region.

In 2025, most of the visitors from the 60 countries that currently do not need a Schengen visa will have to apply for ETIAS, or the European Travel Information and Authorization System. This includes travelers from the U.S. If you need more information about this, please visit the etias.com website.

• https://taxation-customs.ec.europa.eu/guide-vat-refund-visitors-eu_en
• https://www.globalblue.com/en/shoppers/how-to-shop-tax-free/destinations
• https://www.claimcompass.eu/blog/how-to-claim-vat-refund/
• https://www.skyscanner.com.my/news/tax-refund-in-europe-rules-how-to
• https://travel.stackexchange.com/questions/173873/how-can-i-get-my-taxes-back-while-exiting-schengen

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Value-Added Tax (VAT): What it is and how to get it refunded if you shop while traveling

What is a value-added tax (vat) and can i get it refunded.

The idea of a value-added tax (VAT) is a foreign concept to most Americans. That puts us in the minority, though: VAT , a multi-layered tax applied at each stage of the manufacturing and marketing process, is used in more than 170 countries —including Canada, Mexico and just about all of Europe.

VAT is applied to most goods and services but if you're planning on international travel , there's a good chance you can get a refund on at least some of your VAT payments.

What we'll cover

What is a value-added tax (vat), sales tax vs. vat.

• VAT pros and cons
• How you can get your VAT refund

Bottom line

A value-added tax (VAT) is very similar to a traditional sales tax , in that the consumer pays it at the point of purchase. It's typically a percentage of the price of the product, but standard VATs range greatly among nations.

The largest difference between VAT and sales tax is when the tax is applied: With a sales tax, the levy is paid only once, by the retail customer. With VAT, though, each stage of the production process is taxed, from raw materials to the finished product.

For example, a farmer sells flour to a baker for $1 plus a 10% VAT. The baker pays the farmer $1.10 and the farmer sends 10 cents to the government. The baker then turns that flour into a birthday cake and sells it to a supermarket for $3, plus a 30-cent VAT. The baker reports the sale but only has to submit 20 cents to the government because she already paid 10 cents VAT when she bought the flour. Finally, the market sells the cake to a customer for $5, plus a 50-cent VAT. The customer pays $5.50 but the grocer only has to send 20 cents to the government to the government because he already paid 30 cents VAT when he bought the cake.  The government still gets its 50 cents from the sale of the birthday cake, but it's divided up along the supply chain — 10 cents from the farmer, 20 cents from the baker, and 20 cents from the supermarket.

Does the United States have a VAT?

The United States is in the minority of countries that don't levy a value-added tax, though most states have a sales tax that serves the same purpose. The US also charges federal excise taxes on certain goods, including fuel, alcohol and tobacco products.

Supporters of a VAT in the US claim it would streamline the revenue process and limit tax fraud. But critics argue it takes revenue control away from states and forces small businesses to carry much greater administrative costs.

How to get a VAT refund

Visitors to countries with VAT still have to pay it, but they can qualify for a refund on certain items. ( The European Commission defines a visitor as "any person who permanently or habitually lives in a country outside the EU.") It's a fairly complicated process and it's easy to miss a step, be told incorrect information or just have your request rejected for no discernable reason. So be sure you want to put in the effort.

First, ensure your items are eligible: They must be new and unused or unworn. The idea is that the goods are for "export," not for use on your trip. And there is typically a minimum amount you have to spend in a store to qualify — as of November 2023, the minimum in the EU is 175 Euros . So it's usually high-ticket items, like jewelry or fine clothing, that qualify for a VAT refund, not a paperback novel or suntan lotion. There are also a number of goods and services that are not eligible for refunds, including hotel rooms and meals.

It's also important to confirm the store you're patronizing participates in a VAT refund program. Some don't and others have very specific requirements. VAT policies may vary within a country, too: While refunds are not available in the majority of the UK , you can sometimes get one in Northern Ireland.

Let the shop know you're interested in a VAT refund. You'll need to provide proof of your "visitor" status—usually your passport, though you may have to show your airline ticket, as well—and fill out some paperwork. Many stores have relationships with refund companies such as Global Blue or Planet , which can streamline the process.

Shipping your purchases home directly from the retailer is another way to avoid paying VAT, but the added cost may outweigh any savings.

You can try to get your VAT refund through the mail but the process takes much longer and can be unreliable. Most people submit their requests at the airport on their way home.  You'll have to present your documents to a customs agent, whose stamp is required as "proof of export." There could be a substantial wait, so be sure to get to the airport early. And you may have to present the items, so don't pack them away in your checked luggage. 

The good news is that larger airports have currency exchanges or branches of refund companies that will give you your money, minus a fee. It may come in local tender or as a charge back on your credit card.  

While you may have to jump through hoops to qualify for your VAT refund, a credit card with no foreign transaction fees can save you from more financial hassles while traveling.

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A value-added tax can catch some travelers off guard and getting a VAT refund takes patience and persistence. But if you're eyeing a big-ticket purchase while traveling, it can be worth the effort. So make sure you learn the proper procedures and keep track of your paperwork.

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What is a VAT Refund at the Airport?

Oct 11, 2023 | Travel

Table of Contents

Ever spotted the “VAT refund at the airport” sign during your travels and wondered what it’s all about? In this article, we’ll decode the process for you. Value Added Tax (VAT) refunds at the airport can put money back in your pocket when you shop abroad. We’ll guide you through the essentials, from eligibility to the steps involved, so you can make the most of this money-saving opportunity on your next trip.

Understanding Value Added Tax (VAT)

Value Added Tax, commonly known as VAT, is a consumption tax imposed by many countries on the purchase of goods and services. It’s a tax that’s added to the price of most products and services at every stage of production or distribution, and it’s ultimately paid by the end consumer.

The Concept of a VAT Refund at the Airport

When you travel to a foreign country whether for business or bleisure Travel , you often engage in shopping, buying souvenirs, clothing, or other items. These purchases may include VAT, which is included in the price you pay. However, as a tourist, you might be eligible for a VAT refund on certain goods you bought during your trip.

Here’s How it Works in Simple Terms

• Eligible Purchases: Not all purchases qualify for a VAT refund. Typically, it applies to goods that you’re taking out of the country and not using within that country, such as souvenirs or gifts.
• Retaining Receipts: To claim a VAT refund, you must keep your receipts. These receipts should show that you paid VAT on the items.
• Airport Refund Desk: Before you leave the country, visit the VAT refund desk at the airport. Present your eligible receipts and goods for inspection.
• Validation and Refund: Once your documents are validated, you may receive a refund either in cash, check, or credit to your card, depending on the country’s procedures.
• Leaving the Country: After receiving your refund, you can proceed with your departure.

The idea behind a VAT refund is to encourage tourism and provide a benefit to travelers. It allows you to recoup some of the taxes paid on eligible items, putting money back in your pocket. However, VAT refund rules can vary from country to country, so it’s essential to familiarize yourself with the specific regulations of the place you’re visiting.

VAT Refund Rules

When it comes to VAT refunds, understanding the rules and eligibility criteria is crucial for travelers seeking to recoup some of the taxes paid on their purchases. Here, we’ll delve into the basic rules and shed light on key considerations:

1. Eligible Purchases

• VAT refunds typically apply to goods that you’re taking out of the country and not using within that country.
• Common eligible items include clothing, electronics, souvenirs, and other tangible goods.
• Services, consumables, and certain high-value items may not be eligible.

2. Minimum Purchase Amount

• Many countries impose a minimum purchase threshold for VAT refunds. You must spend a certain amount on eligible items to qualify.
• The minimum purchase amount can vary, so check the specific requirements of the country you’re visiting.

3. Time Limit

• There’s usually a time limit for claiming VAT refunds. You’ll need to apply for the refund within a specified timeframe from the date of purchase.
• This period can vary but is often several months.

4. Proof of Purchase

• Travelers must retain their original receipts, which should clearly show that VAT was paid on the items.
• Ensure that the retailer provides a proper VAT invoice.

5. Departure from the Country

• VAT refunds are typically processed at the airport when you’re leaving the country. You’ll need to show both the purchased goods and the associated receipts at the VAT refund desk.
• Customs authorities may inspect the items to verify that they’re leaving the country with you.

6. Specific Limitations

• Some countries have specific rules and limitations. For instance, certain items like jewelry or luxury goods might have different refund rates or requirements.
• Look out for special procedures or restrictions related to duty-free shopping zones within the airport.

7. Refund Methods

• The refund can be provided in different forms, including cash, check, or a credit to your credit card.
• Be prepared for administrative fees that may be deducted from your refund.

8. Keep Documentation

• It’s essential to keep all relevant documents, such as the refund forms provided by the retailer and any customs stamps, as these may be required to complete the refund process.

How to Get Your Refund?

Claiming a VAT refund at the airport or another designated point is relatively straightforward. Here’s a step-by-step guide to help travelers navigate the process:

• Shop Wisely: Make eligible purchases during your trip, ensuring they meet the minimum spending requirements for VAT refunds.
• Keep Your Receipts: Retain original receipts that clearly indicate VAT paid on the items. The retailer should provide a proper VAT invoice.
• Request a VAT Refund Form: Ask the retailer for a VAT refund form or tax-free shopping form. Complete the form with accurate details, including your contact information.
• Visit Customs: Before checking in for your departure flight, go to the customs desk or designated tax refund point within the airport. Be sure to have your purchased items, receipts, and passport on hand.
• Inspection: Customs authorities may inspect your items to verify that they are indeed leaving the country with you.
• Stamp of Approval: Present your completed VAT refund form, along with your receipts and purchased goods, to customs. They will inspect and stamp the form, confirming your eligibility for a refund.
• Refund Desk: Head to the VAT refund desk, usually located in the departure area, after clearing customs. Submit your stamped VAT refund form.
• Choose Your Refund Method: Select your preferred refund method, which can be in cash, by check, or credited back to your credit card. Some airports may have multiple refund counters for different methods.
• Processing Fees: Be aware that some administrative fees may be deducted from your refund amount.
• Keep Documents Safe: Safeguard all relevant documentation, including the refund form and customs stamps, as they may be required for future reference.

For a successful business trip, making the most of VAT refunds can help offset expenses and make your journey more cost-effective.

Simplifying the Process with airssist

We are your trusted partner in streamlining the VAT refund process for travelers, offering personalized assistance that ensures convenience and efficiency. With airssist’s expert guidance, travelers can navigate the complexities of VAT refund regulations with ease. We not only save valuable time but also offer multiple refund options, making it a stress-free experience, particularly beneficial for busy business travelers. Our seasoned team provides valuable insights, allowing you to maximize your refund potential and focus on your stress-free business travel goals.

Unlock Travel Savings

Unlocking travel savings, particularly through VAT refund airport opportunities, is a savvy way for travelers to make the most of their international journeys. By grasping the ins and outs of Value Added Tax (VAT) refunds and the assistance available, travelers can transform routine shopping into a strategic means of stretching their travel budget.

FAQs on VAT Refund at Airport

1. who is eligible for a vat refund.

Tourists visiting a foreign country can often claim VAT refunds on eligible purchases they're taking out of the country.

2. Is There a Minimum Purchase Amount for VAT Refunds?

Yes, many countries have a minimum spending requirement. Check the specific amount for your destination.

3. How Long do I Have to Claim a Refund?

The timeframe varies, but you typically need to apply within a few months of the purchase.

4. What's the Refund Processing Time?

Processing times can vary, but refunds are often issued at the airport when you depart.

5. Are There Administrative Fees for Refunds?

Some refund providers deduct administrative fees from your refund amount.

6. Can I Claim VAT Refunds for Business Expenses?

Business travelers may be eligible for VAT refunds on certain business-related expenses. Check with local regulations.

7. Are All Items Eligible for a Refund?

No, only certain goods qualify. Common eligible items include clothing, electronics, and souvenirs.

Note : Please note that the information on this page is generic & subject to change due to fluctuations in airport services. Kindly confirm service availability with our team, as offerings may vary daily.

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Tourist Refund Scheme (TRS)

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Upon application travellers not domiciled in the  EU will be refunded the VAT by the seller for goods bought in Austria. Please note the following requirements: The invoiced amount (possibly including VAT ) must exceed  EUR 75.

• Your passport or other cross-border travel document must indicate a domicile outside the EU .
• You must export the item with your personal luggage from the  EU before the end of the third calendar month following the month in which the purchase was made.
• You must prove the export of the item to the seller. This is done by returning to the seller.

Since 01-SEP-2021, the operational processing of the export confirmations for tourist exports at Vienna International Airport has been carried out by Digital Export Validation (DEV).

• The passenger submits the documents required for the processing of the export confirmation (invoice that meets the requirements with regard to content as defined in § 11 of the Austrian Value Added Tax Act ( UStG ) 1994, or additionally an appropriate other form sheet, e.g. Form Sheet U34) to the Digital Export Validation (DEV) service desk.
• The data required for the validation are either electronically recorded on site by Digital Export Validation (DEV), or have already been sent digitally to the system of Digital Export Validation (DEV) in advance.
•  as a rule in electronic form, representing an export confirmation within the meaning of § 7 VI 1 of the Austrian Value Added Tax Act ( UStG ) 1994. In addition, the confirmation is documented by stamping. 
• No exit confirmation of the goods (indication of further procedure)

The digital export confirmation is equivalent to the original document and can thus be used directly as proof of the tax exemption of the tourist export.

An endorsement can be issued at a later date only in special, exceptional cases. At some border-crossings, private clearance offices have been set up that handle the refunding procedure on your behalf against a fee. On the other hand, in several non- EU countries the seller will refund the VAT paid when making a purchase. The respective body (embassy, consular office) will inform you of the conditions and formal requirements that apply to this connection.

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VAT refund for tourists

Marion Castañeda Tax Senior Manager, PwC Philippines 28 Jun 2023

After the Director-General of the World Health Organization declared an end to COVID-19 as a global health emergency, many of us grew eager to return to life as we knew it before COVID-19. Tourism was one of the hardest-hit industries during the height of the COVID-19 pandemic due to the mobility and international travel restrictions that were aimed at reducing the spread of the virus. Now, although many of us remain cautious and continue to wear face masks despite the lifting of most mask mandates, “revenge travel” — to make up for lost time — is a high personal priority for many.

While there are broader factors that will boost tourism (airport capacity and infrastructure, to name two), one proposal aims to improve our attractiveness as a travel destination from a tax perspective. Under House Bill (HB) No. 7292, non-resident tourists would be allowed to obtain a value-added tax (VAT) refund on their purchases of goods worth at least P3,000. The bill was approved by the House of Representatives on third and final reading, and the President himself has signaled his backing for the proposal in principle.

INTERNATIONAL PERSPECTIVE The concept of recouping VAT or similar consumption taxes on foreign tourists’ purchases is not new. In fact, according to the House Ways and Means Committee Chairman, we are one of the last few Asian destinations that do not have a tourist VAT refund system. To better understand this proposal, let’s take a brief look at some of our neighbors.

In Indonesia, Malaysia, Singapore, Thailand, and Vietnam, the general procedures can be outlined as follows: 1) obtain and keep the tax invoices for eligible purchases; 2) show travel documents together with the invoices and the goods purchased (and not consumed) to the refund counter at the airport; and 3) claim the tax refund, most commonly in cash (local currency). Naturally, each jurisdiction has its own set of procedures and rules regarding controls (some have specific “tax-free” shops), purchase or tax amount thresholds, the number of days between when the purchase was made and when the refund is claimed, and even the actual refund mechanism (some allow refunds via credit card reverse charge). Nevertheless, the overarching procedures appear quite similar.

Outside of ASEAN, Taiwan seems to have similar procedures as outlined above, albeit with an option to use an “E-VAT Refund Machine” instead of proceeding to a refund counter. Interestingly, Japan has a drastically different approach: either a) pay for the purchase with consumption tax already deducted upon presentation of a passport, or b) obtain a refund by visiting the designated tax exemption bulk deduction counter (in-store, not at the airport) and presenting the purchased goods, receipt, and passport.

CURRENT PHILIPPINE VAT RULES The purchase of goods within the Philippines is generally subject to 12% VAT. As an indirect tax, VAT is passed on to and shouldered by the buyer. As a tax on the “value added,” the ultimate consumer or end-user primarily bears the cost of VAT. This burden is especially felt by individual buyers, who are typically not VAT-registered and do not have the benefit of claiming input VAT credits on their purchases.

The proposal for VAT refunds on tourist purchases would add Section 112-A to the Tax Code, the salient portions of which read as follows:

“SEC. 112-A. TOURIST VAT REFUND. — A tourist shall be eligible for a value-added tax (VAT) refund on goods purchased from accredited retailers in the Philippines if such goods are taken out of the country within sixty (60) days from the date of purchase, and the value of goods purchased per transaction amounts to at least three thousand pesos (P3,000.00) …

For purposes of this section, a ‘tourist’ shall refer to a foreign passport holder, who is a non-resident individual not engaged in trade or business in the Philippines.”

The proposal seems simple enough. Tourists who are foreign nationals and not residents of the Philippines can refund the 12% VAT imposed on goods that they purchase within 60 days before they leave the country. The bill authorizes the Secretary of Finance to promulgate the rules and regulations for the law’s implementation. It appears that the legislators prefer giving leeway to the executive branch as to the exact mechanics of the VAT refund process.

POINTS FOR CONSIDERATION According to the Presidential Communication Office, the VAT refund program for foreign tourists is targeted for implementation by 2024 and is billed as an effort to boost tourist arrivals. The counterpart Senate bill still faces hearings at the Senate Committee on Ways and Means at this writing. Nevertheless, here are a few salient points to consider about the pending measure:

1) Administration: With the ultimate goal of boosting tourist spending in mind (thus helping retailers generate more sales and growing our economy), the government should ensure that rules or requirements are simple to comply with for retailers.

2) Convenience: From the foreign tourists’ perspective, a tedious process for obtaining a VAT refund will discourage them from applying in the first place, in turn discouraging them from spending. It bears highlighting that, at 12%, we have the highest VAT rate in ASEAN.

3) Safeguards : As a refund program, this measure will likely entail funds to be programmed into the government’s annual budget. As with any government-funded measure, policies for transparency and governance must be strictly enforced.

As we welcome foreign visitors, we can, in addition to showing them a great time at our beaches and other destinations, perhaps they will also buy more “pasalubong” for their loved ones back home — VAT-free, if this proposal becomes law.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

This article was originally published in BusinessWorld.

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Marion Castañeda

Tax Senior Manager, PwC Philippines

Tel: +63 (2) 8845 2728

Lyn Golez-Geronan

Tax Librarian, PwC Philippines

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I found a post from 2008 saying that there is no vat refund for tourists. And, I have 'googled' this and it looks like that is indeed the case.

Can anyone give me new updates - is there a VAT refund for tourists (US) ??

I am pretty sure there is not...and if there is, then I have lost thousands of $!

> is there a VAT refund for tourists (US)

No, there isn't.

This topic has been closed to new posts due to inactivity.

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10 tips for Canadians travelling to Europe in 2024, from visa requirements to tipping culture

P lanning a European vacation this year? Whether you're eyeing a summer trip spent Greek island hopping or you'll be heading to Paris this fall, there are plenty of things you'll want to keep in mind before you head out.

From entry rules to what to pack, there are quite a few key things that Canadians should be sure to prepare for if they're travelling overseas.

To help, we've laid out a few key tips for Canucks visiting Europe in 2024. Including requirements for your Canadian passport , how to get a tax refund and local tipping etiquette, here are 10 things to keep in mind before embarking on your trip.

Check visa requirements

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Before travelling to Europe, make sure you're aware of the entry requirements of the country or countries you'll be visiting.

While Canadians won't need a visa to visit most European countries, some have different rules when it comes to how long Canadians can visit visa-free .

For instance, in Schengen area countries such as Iceland, Italy, Portugal and Spain, visa-free travel only applies to stays of up to 90 days in any 180-day period and includes visits to any Schengen area country.

Other countries outside the Schengen area may have different rules. In the United Kingdom , for example, tourist visas are not required for stays of up to six months.

According to the Government of Canada, it's important to get your passport stamped when you first enter the Schengen area.

Without this, you may run into problems if you encounter the local police (or other authorities) anywhere in the Schengen area during your visit or with immigration officials when you depart.

Make sure your passport is valid

How long your passport needs to be valid for will also vary by country.

For instance, in Schengen zone countries, your Canadian passport must be valid for at least three months beyond the date you expect to leave the area.

Other European countries, such as Andorra , only require that your passport be valid for the duration of your stay.

Some countries in Europe are landlocked and without their own airports, meaning you'll have to also meet the entry rules of neighbouring countries in order to visit.

You can check the entry and exit requirements of a country by referring to Canada's travel advisory page .

Pack an adapter

Be aware that your Canadian appliances won't fit in the electrical outlets in Europe, which uses two round prong outlets unlike the flat pin outlets used in Canada.

A simple solution is to purchase a power adaptor or voltage converter beforehand. A voltage converter can also save you from potentially frying your hair dryer, as Europe uses 220 volts, compared to Canada's 110, according to the Travel Industry Council of Ontario.

If you're partial to Apple products, the company sells a World Travel Adapter Kit that you can buy on Amazon. However, you can get them from pretty much any travel store and even at the airport for last-minute shoppers.

It may be a good idea to bring more than one — that way, you can charge multiple items at once.

Travel with local currency

If you're travelling to Europe, you'll want to have some of the local currency on hand, which is especially important if you’re travelling outside big tourist cities to smaller towns.

While many European Union countries use the euro , some countries still use their own national currencies. Currently, the euro is the official currency of 20 out of 27 EU member countries which together constitute the Eurozone.

They are Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Malta, Luxembourg, the Netherlands, Portugal, Slovakia, Slovenia and Spain.

There are also six countries that are part of the EU but use their own national currencies: Bulgaria, Czechia, Hungary, Poland, Romania, and Sweden.

Non-EU member countries, including Iceland, Norway, Switzerland and Liechtenstein, use their national currencies.

It's a good idea to check beforehand what kind of currency you'll need for your trip and to have some on hand.

Besides cash, you can usually also use your Canadian credit card when travelling in Europe, but be aware of differing conversion rates depending on the local currency.

Be aware of tourist fees

As a Canadian, there are certain fees you'll have to pay when visiting Europe that vary by country.

Many countries impose tourist taxes on foreigners in certain major cities, usually added to the price of the tourist's accommodation.

For instance, Barcelona in Spain charges a tourist tax that's levied on official tourist lodging and varies depending on the type of accommodation. As of April 2024, the tax is 6.75 euros (about CA$9.92) for five-star hotels, 4.95 euros for four-star hotels, and 5.50 euros for "housing for tourist use."

Other European countries including Switzerland, France, Portugal and Greece also charge tourist taxes. Check with your accommodation or the tourism board for each destination before travelling to be sure how much you need to pay.

Canadians will also have to soon pay a fee to visit 30 countries in Europe.

Starting in the first half of 2025, Canadians will have to pay a travel authorization called the ETIAS to travel to countries including Portugal, Belgium, Iceland, Greece, Italy, France, and Germany.

The ETIAS will allow travellers to stay in the territory of European countries requiring an ETIAS for up to 90 days within any 180-day period.

A full list of countries where the ETIAS will apply can be found on the European Union website .

Once it does come into effect, Canadians will be charged a fee of 7 euros (CA$10.29).

Get a VAT refund

Canadians visiting the EU who are about to leave EU territory to go home or to some other place outside the area may be able to buy goods free of VAT.

VAT, which stands for "value added tax," is a sales tax included in the price you pay for the goods you purchase while in the EU.

As someone who does not live in the EU, however, a Canadian traveller is eligible to buy goods free of VAT in special shops.

Generally, you will have to pay the VAT while shopping, but can get a refund on the tax.

The European Commission advises asking the shop assistant in advance whether they provide this service, and finding out what threshold applies to the purchase in order to be eligible for a refund.

To get your refund, you'll need to show your passport or other identity document proving your residence outside the EU, and will be asked to fill out a form.

You'll then receive an invoice for the goods which you must show to customs officers of the last EU country you leave in order to obtain the refund.

According to the European Commission, you can claim your VAT refund in bigger airports immediately; otherwise, you will have to send the refund form to the address given to you in the shop.

You can also get a refund on VAT when shopping in other European countries that are not members of the EU, such as Iceland and the U.K.

Know the local laws

Remember that different countries will have different local laws that you must abide by. Some apply to certain activities that may be perfectly legal in Canada, but could land you in hot water while abroad .

For instance, in Italy, certain municipalities — particularly those that see a high number of visitors like Venice, Rome, and Florence — have adopted strict public conduct rules, according to the Government of Canada .

In these areas, certain behaviours including sitting, eating or drinking on a monument or an archaeological landmark, walking in an urban setting in swimwear or without a shirt, and feeding pigeons are actually illegal.

Other European countries have their own rules for activities that would be innocuous in Canada. In Spain , some municipalities, including Barcelona, have banned beachwear outside of local beaches, and those caught could face on-the-spot fines.

Be sure to research the destination you're travelling to. You can consult the Government of Canada's travel advisories for information regarding local laws and culture.

Understand tipping etiquette

While tipping is practically obligatory in Canada, tipping culture is much different in Europe.

While it varies by country, generally, tips are not expected in Europe as they are in Canada.

"For most, tips are not expected in Europe, and it's fine not to tip at all, especially in more casual settings like bars or cafes," says ETIAS.com .

The website lays out tipping etiquette in several popular European destinations. For example, in France, tips are not obligatory, it says, and diners instead may notice a " service compris" or "service included" fee equivalent to 15 percent of the bill added to their cheque.

That said, diners may want to still leave something small to show their appreciation; in this case, they can simply round up the bill to the next euro, a common practice for when a larger tip may not be warranted.

For other country-specific tipping information, travellers can look to the local tourism board for their destination, which will often have information on local tipping etiquette.

Consider a budget airline

While Canada doesn't have many budget airlines flying to Europe, in 2023, Play Airlines launched its first flights from the True North, offering Canucks cheap flights to over 30 European destinations.

With Play, you can fly from Toronto to destinations like Greece, France, Italy, Portugal and more for considerably cheaper than other major Canadian airlines.

The airline also frequently has sales that offer additional savings on their already cheap flights.

Check baggage restrictions

If you'll be travelling in Europe, be aware that local European airlines will often have different luggage restrictions compared to those of Canada.

For instance, if you were travelling to the islands of Greece, you'd likely have to take a Greek flight once you arrive in the country on your flight from Canada.

While your Canadian airline may have not had any restrictions on cabin baggage weight ( Air Canada , for instance, specifies that cabin baggage has no weight restrictions but must be light enough that you can store it unassisted), the local airline you fly with in your destination may have different rules.

Popular Greek airline Aegean , for instance, says that carry-on baggage must weigh no more than 8 kilograms (17.6 pounds).

Be sure to check the luggage requirements for every airline you'll be flying with to avoid any hassles during your trip.

Bon voyage!

Before you get going, check out our Responsible Travel Guide so you can be informed, be safe, be smart, and most of all, be respectful on your adventure.

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• EU: New draft of EU VAT reform (VAT in the Digital Age (ViDA))

Updated draft of “Value Added Tax (VAT) in the Digital Age (ViDA)” package, which, if adopted, would amend EU VAT rules

New draft of EU VAT reform (VAT in the Digital Age (ViDA))

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The European Commission (EC) on 8 May 2024 published an updated draft of the “Value Added Tax (VAT) in the Digital Age (ViDA)” package, which, if adopted, would amend the EU VAT rules in the following three areas:

• Expand the VAT digital platform rules to platforms facilitating the provision of passenger transport and short-term accommodation
• Expand the single VAT registration and compliance mechanism under the One Stop Shop (OSS)
• Introduce a new real time digital reporting system based on electronic invoicing (e-invoicing) for businesses that operate cross-border in the EU

The EC initially proposed the VIDA package on 8 December 2022 (read TaxNewsFlash ). Since then, member states have discussed the proposal at an EU level to take into consideration various concerns (e.g., some member states have already implemented e-invoicing mandates). The updated draft therefore reflects thus a compromise of the different positions and, in certain areas, significantly amends the initial proposal. The Economic and Financial Affairs Council (ECOFIN), which is made up of the economic and finance ministers from all EU member states, will discuss the updated proposal on 14 May 2024 and may reach political agreement. Once such political agreement is reached, the proposal should be formally approved.

If adopted as proposed, the new digital platform and single VAT registration rules would enter into force on 1 January 2027 (1 January 2025 in the initial proposal), with certain technical provisions being effective 1 January 2026. The e-invoicing and digital reporting rules would however only be effective 1 January 2030 (1 January 2028 in the initial proposal).

Expansion of the VAT digital platform rules

In the EU, digital platforms such as marketplaces facilitating the sale of digital services and certain goods to final consumers are deemed to perform a buy-sell of the digital services/goods, thus taking over the liability to collect and remit VAT on such sales to final consumers (B2C).

The updated proposal states that effective from 1 January 2027, platforms facilitating short-term accommodation rentals or passenger transport services via an electronic interface are considered to have received and sold those services themselves, unless the service provider has provided their VAT identification number (VAT ID) and declared they will charge any VAT due. Member states can require that the platforms validate the VAT IDs they receive.

Short-term accommodation rental services in this context refer to the uninterrupted rental of accommodation to the same person for a maximum of 30 nights. Such short-term rental would be considered similar to the hotel industry and would thus be subject to rules set by each member state. Member states are required to inform the VAT Committee about their national laws related to these criteria, conditions, and limitations before 1 July 2027. The EC will then compile and publish a comprehensive list by 31 December 2027, detailing the criteria, conditions, and limitations set by each member state.

Unlike the initial proposal, the updated proposal provides that member states can choose to exclude short-term accommodation rentals and road passenger transport services, which are made under the special mechanism for small enterprises, from the deemed seller rules. In such a situation, the proposal includes specific record-keeping and retention requirements. For more information on the special mechanism for small enterprises, read TaxNewsFlash .

The updated proposal would further clarify that facilitation services provided to final consumers would be sourced to the member state when the underlying transaction is taxable. This new sourcing provision would not be limited to platforms facilitating the sale of short-term accommodation and passenger transport services.

Finally, the initial ViDA proposal considered expanding the deemed buy-sell rules to marketplaces facilitating the sale of EU established vendors as currently marketplaces are only liable for sales of goods within the EU facilitated for non-EU vendors. This initial proposal is no longer included in the compromise text.

Expansion of the single VAT registration mechanism

In the EU, historically, taxpayers were required to register for VAT in each member state where they performed taxable sales and were liable to collect VAT. However, in 2015, the EU introduced a simplification mechanism, the One Stop Shop (OSS), applicable to providers/digital platforms of B2C digital services. This allows taxpayers to register in one member state and declare the VAT owed across the EU in a single EU-wide return. This mechanism was expanded in 2021 to all remote B2C sales services and certain B2C sales of goods to be reported under this mechanism.

According to the updated draft, effective from 1 January 2027, the OSS would be expanded to:

• Transfers of own goods between member states. Such transactions are currently considered a taxable transaction for EU VAT purposes, thus requiring the taxpayer moving such goods between member states to register in multiple jurisdictions, unless a specific exemption applies
• B2C sales of goods with installation or assembly; sales of goods on board ships, aircrafts or trains; and sales of gas, electricity, heating and cooling by taxpayers who are not established in the member state of consumption
• Domestic B2C sales of goods by taxpayers who are not established in the member state of consumption
• Certain zero-rated transactions (e.g., sales of goods and services inter alia under diplomatic, consular arrangements and to certain other international bodies)

The initial proposal also included in the scope of the expanded OSS mechanism, sales subject to the margin scheme (e.g., second-hand goods, works of art). This initial proposal is no longer included in the compromise text.

In addition, the ViDA proposal would expand the requirement for the purchaser to self-assess VAT under the reverse charge mechanism. VAT is typically charged by the seller of goods or services, but under certain circumstances, the recipient of the transaction may be required to account for the VAT owed and the deductible VAT in the same return. In this respect, the ViDA proposal would mandate the application of this mechanism when vendors are not established or identified for VAT purposes in the member state where the VAT is due and the recipient is identified for VAT purposes. These sales would then need to be reported through a recapitulative statement. Member states would also be allowed to apply the reverse charge mechanism to sales by non-established vendors to any customer, regardless of their status, subject to the conditions laid out by the member state.

Finally, the ViDA proposal would introduce technical amendments such as with respect to when VAT is reportable in an OSS return, when and how amendments of the OSS return can be made, and repeal the call-off stock simplification as it would become obsolete with the implementation of the OSS regime for transfers of own goods.

Introduction of mandatory e-invoicing and digital reporting

Effective from the entry into force of the ViDA package, member states would have the authority to mandate taxpayers established in their territory to use e-invoicing for domestic transactions, without needing to request approval from the EU.

From 1 January 2030, e-invoicing and digital reporting would become mandatory for the following transactions:

• Intra-EU sales of goods
• Intra-EU acquisitions of goods, except transfers of own goods (member states may opt out of this requirement)
• Taxable sales of goods and services for which the customer is liable under the reverse charge mechanism
• Taxable purchases of goods and services for which the customer is liable under the reverse charge mechanism (member states may opt out of this requirement)

Regarding the EU e-invoicing requirement, the updated proposal specifies that e-invoices must comply with the EU standard as per Directive 2014/55/EU. For transactions not subject to the EU mandate (e.g., domestic transactions), member states may accept other formats. In addition, e-invoices should be issued within 10 days of the chargeable event for the transactions in scope of the EU mandate (two days in the initial proposal). This timeline is shorter than the current requirement to issue valid VAT invoices within 15 days of the end of the month following that in which the chargeable event occurs.

The new digital reporting requirement would replace the current requirement to file recapitulative statement. Once this new reporting obligation becomes effective, the draft proposes that taxpayers would be required to submit it to their tax authority by the following deadlines:

• For sales, at the time of invoice for transactions when the seller issues the invoice or five days after the invoice issuance for sales when the buyer issues invoices
• For purchases, five days after the invoice issuance for intra-community acquisitions and purchases subject to the reverse charge mechanism

Member states would also be permitted to implement digital reporting requirements for business-to-business (B2B) transactions not falling under the EU mandate made by resident taxpayers or nonresidents registered for VAT purposes (e.g., domestic sales). In this case, the updated proposal includes general harmonization language with the EU requirement (e.g., timing of the data transmission and that member states must allow transmission of the data in compliance with the EU e-invoicing standard). Member states that have opted for this additional reporting would also be permitted to entitle taxpayers to deduct VAT on purchases only if they hold a valid e-invoice. Currently, the possession of a valid VAT invoice is not considered a substantial requirement to deduct VAT. Therefore, this new option would significantly change the EU VAT credit mechanism.

By 31 March 2033, the EC would be required to present an interim evaluation report on the e-invoicing and digital reporting requirements to the European Council.

For more information, contact a KPMG tax professional:

Philippe Stephanny | [email protected]

Ramon Frias | [email protected]

Chinedu Nwachukwu | [email protected]

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.

Senate passes FAA bill with new consumer protections

The legislation will require airlines to refund customers for flight delays

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What happened

The Senate voted 88-4 on Thursday to reauthorize the Federal Aviation Administration and enact a raft of measures aimed at improving air safety and customer service. Senators also approved a one-week extension of FAA authorization, which expires Friday night. The House passed the weeklong extension on Wednesday, before leaving for the weekend.

Who said what

The bill "gives the FAA the stability it needs to fulfill its primary mission — advancing aviation safety — while also making travel more convenient and accessible," said Sen. Maria Cantwell (D-Wash.). The bipartisan legislation increases the number of air traffic controllers and aircraft safety inspectors, requires airlines to refund customers for flight delays and prohibits them from charging extra to seat families together. 

The FAA package is "one of the few remaining bills considered a must-pass item this year," The New York Times said. If the House doesn't pass it by May 17, the FAA will have to furlough about 3,600 workers.

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Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.  

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PRESS RELEASES

Travel advisor community aggrieved over senate passage of the faa reauthorization without a ticket refund remedy.

Alexandria, VA, May 10, 2024 – The amended FAA Reauthorization bill (H.R. 3935) approved by the Senate in the late evening on May 9 failed to address a recent Department of Transportation (DOT) final rule that leaves travel agencies on the hook for providing airline refunds in cases where they are the merchant of record .  

“Time and time again, we’ve heard politicians in Washington give lip service to small businesses. Travel agencies are not positioned to float the kind of financial obligations that policymakers are strapping on their backs,” said Zane Kerby, President and CEO of ASTA. “Consumer protection could have been accomplished without sacrificing the interests of small business travel advisors who work diligently every day on behalf of the traveling public,” Kerby continued. 

ASTA notes that in both the regulation and the legislation, “ticket agents” were painted with a broad brushstroke, and not all ticket agents are created equal. The ability of a large online travel agency (OTA) to repay an airline refund is vastly different from a third-generation retail travel agency.  

“Those household name OTAs are resourced with billions more dollars than our retail agencies, 98 percent of which are small businesses. Airlines have been bailed out by Congress over and over, and they are now looking to travel agencies to serve as their bank, paying their customers with no onus to repay the agencies. Requiring advisors to extend credit from their own pockets to pay airline refunds is a gross misplacement of responsibility that must be rectified,” Kerby said. “Congress failed in its duty to protect Main Street from monolithic airline corporations. In the end, the consumer suffers, as travel advisors will be less inclined to book airfare, leaving the flyer without an advocate when travel plans go south,” Kerby concluded.  

Travel advisors will meet with lawmakers this September for ASTA’s annual Legislative Day . This will be the first item on the agenda in those congressional meetings. Travel advisors will want to know how their lawmakers plan to address this significant oversight. 

ASTA extends its appreciation to Sen. Rand Paul (R-KY), who introduced an amendment restoring the original language included in the House version of the bill that would have placed the refund obligation on the party holding the funds. Unfortunately, Senate leadership failed to provide an opportunity to consider amendments.

ABOUT ASTA Rebranded in 2018 as the American Society of Travel Advisors, ASTA is the leading global advocate for travel advisors, the travel industry and the traveling public. Its members represent 80 percent of all travel sold in the United States through the travel agency distribution channel. Together with hundreds of internationally-based members, ASTA’s history of industry advocacy traces back to its founding in 1931 when it launched with the mission to facilitate the business of selling travel through effective representation, shared knowledge and the enhancement of professionalism. For more information about the Society, visit our mission statement .  

RETURN TO PRESS RELEASE LISTING

Bonza administrators tell customers no refunds for now, despite company's promise to reimburse cancelled flights

Jennifer Hinton was one of thousands of Bonza customers left in the lurch this week.

The single mother had spent months saving up for a trip from Mackay to Melbourne with her young daughter for what would be their first holiday in five years.

"The idea of going on holidays is a luxury for people like me and then to have something like this happen, it's just disgusting — really poor form," Ms Hinton said.

"I can't afford to just start forking out money straight away like that to pay for a new set of flights."

Qantas came to the pair's rescue by replacing their flights free of charge.

But Ms Hinton has been left $623 out of pocket and will not be receiving a refund from Bonza any time soon.

The embattled low-cost carrier cancelled all services across the country on Tuesday morning, and has now ruled out any further flights until after Tuesday, May 7.

Bonza promised full refunds in text messages to some affected passengers, not long before it was placed into voluntary administration.

Newly-appointed administrators Hall Chadwick released a statement on Wednesday night acknowledging it was a "difficult time for all involved".

"Unfortunately the administrators and/or the company are not in a position to process or issue refunds at this time," the statement read.

"We understand how frustrating this is and we appreciate customers' patience."

The Australian Competition and Consumer Commission (ACCC)  is urging affected customers to contact their banks for potential reimbursement. 

More than money lost

Townsville pensioner Katy Hamilton said she held little hope of Bonza passengers ever seeing their money again.

"Good luck to them. I'm sorry, but that's how I see it," Ms Hamilton said.

Ms Hamilton had been using the budget airline to fly to the Gold Coast, before catching a train to Brisbane to visit her sister who is in palliative care.

But her most recent cancelled flight was to attend a netball competition for her daughter.

She said she was owed $125 by Bonza, but had also lost $300 in accommodation costs.

"That's not a lot, but to me it is when I'm trying to support my child," she said.

Sunshine Coast woman Sarah Wood had paid about $400 to fly to Darwin with her husband Rob on Wednesday morning.

"As small-business operators, we really don't get that much opportunity for a holiday so this week off is really precious to us," Ms Wood said.

“The stress level was through the Richter scale.”

She said she was told by Virgin and Qantas that they were not eligible for free flights as they were not considered "stranded".

The couple has spent an extra $2,000 on flights, accommodation and transport just to ensure their trip could go ahead.

“We're lucky enough that we had the available money to be able to purchase alternative tickets.

"My heart goes out to those others that didn't have that choice," Ms Wood said.

Airline 'monopoly'

Bradd Morelli, managing partner from insolvency firm Jirsch Sutherland, said it was not unusual for customers to miss out on refunds in the early stages of a company collapse.

"That would be a standard position from an administrator," Mr Sutherland said.

"If they've pre-booked, they're technically a creditor." He said it could be months before refunds were issued — if at all.

"If Bonza is going to restructure or if there's a sale, it may be that the purchaser wishes to honour those bookings in order to maintain or maximise goodwill," Mr Morelli said.

Ms Hinton said while she was very grateful to Qantas for stepping in and providing free flights, its airfares were well out of reach.

"I paid $623 with Bonza, the ticket price of my Qantas flights was $1,884," she said.

Despite the dramas, Ms Wood said the low-cost carrier should stay in the air, and called on the Federal government to intervene.

“They do everything in their power to help Qantas and Virgin … where's the help to Bonza?" she said.

“Where is the assistance to help these little regional airlines get off the ground so that we don't have a monopoly with the big two? It's another Coles and Woolies scenario."

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