How to Claim VAT on Products Bought During Holidays Abroad

When shopping abroad during a vacation or a short stay, the Value Added Tax (VAT) embedded in the price of goods can add up quickly. However, many travellers don’t realise they might be eligible for a VAT refund. This guide explains the process of claiming VAT refunds during or after your international trip.

What is VAT and How Does It Work for Travellers?

VAT, or Value Added Tax, is a consumption tax applied to goods and services in many countries. For travellers, VAT can range from 5% to 25% of the purchase price, depending on the country. The good news is that non-residents are often eligible to claim refunds on VAT for goods they take home. Typical items eligible for VAT refunds include clothing, electronics, luxury goods, and souvenirs (unused or unopened). We will take, for example, a perfume, a watch or a shirt.

Why claim your VAT?

Generally, VAT on goods purchased overseas are refunded to prevent double taxation. VAT is refunded on goods used overseas because Value Added Tax is a consumption tax charged in the place where the goods are consumed, meaning that your country of destination, where the goods will be consumed, will tax you.

It’s important to note that each country has its own rules for VAT refunds, including minimum spending thresholds, eligible goods, and the required documentation. Planning and understanding these rules can help ensure a smooth refund process.

Key Steps to Claim VAT on Purchases

1. Understand the Rules of the Country You’re Visiting

VAT rates and refund processes vary widely across countries. Before your trip, research the refund policies of your destination. Some countries set minimum spending limits to qualify for a refund, while others exclude certain types of goods. Knowing these details in advance will save time and prevent disappointment.

2. Shop at Stores That Offer VAT Refunds

Not all retailers participate in tax-free shopping schemes. Look for stores displaying “Tax-Free Shopping” signs or inquire at the time of purchase. Ask for a VAT refund form or an invoice that includes the VAT amount.

3. Prepare the Required Documents

To successfully claim a refund, you’ll typically need the following:

• The VAT refund form was provided by the store.
• Original receipts or invoices.
• Your passport (or a photocopy, depending on the country).
• Proof of export, such as a stamped document from customs.

Keep these items organised to avoid delays or lost refunds.

4. Complete the Process at Customs

Before leaving the country, you must visit the customs office at the airport, port, or border crossing to have your VAT refund forms stamped. Customs officials may ask to inspect your purchased goods, so keep them easily accessible. Ensure you allow extra time at the airport to complete this step.

5. Submit the Claim

Once your forms are stamped, you’ll need to submit them for processing. Many airports have VAT refund counters or kiosks where you can complete the process. Alternatively, you can mail your forms to the appropriate agency. Refunds are often issued via credit card, bank transfer, or checks and may take several weeks to process.

Pro Tips for a Smooth VAT Refund Process

• Check Refund Thresholds: Some countries require a minimum purchase amount to qualify for a VAT refund. For example, in France, the minimum is €100.01, while in Switzerland, it’s CHF 300.
• Organise Receipts and Purchases: Keep your receipts and purchased goods together in case customs officials request an inspection.
• Account for Fees: Refunds may be subject to administrative fees, reducing the amount you receive. Be aware of these deductions when planning your budget.
• Timing is Key: Customs offices and refund counters may have limited hours, especially at smaller airports. Plan accordingly to avoid missing your chance to claim a refund.

Apps to Simplify VAT Refunds

Technology has made it easier than ever to claim VAT refunds. Several mobile applications offer streamlined solutions for travellers:

Global Blue – Shop Tax-Free: A popular app for tracking refunds, finding participating stores, and accessing tax-free shopping rules across various countries. Available on iOS and Android.

Vatfree.com: This app allows you to upload receipts and manage VAT refund claims for purchases within the EU. It’s accessible via their website and mobile apps.

ZappTax: A fully digital solution for VAT refunds in countries like France, Spain, and Belgium. You can upload invoices and receive refunds directly through the app, available on iOS and Android.

Wevat: Specialising in tax-free shopping in France, Wevat digitises invoices and simplifies the VAT refund process without requiring paper forms. Available on iOS.

Pie VAT: A digital platform for managing VAT refunds with a user-friendly mobile app. Available on the Google Play Store.

These apps simplify the process, allowing you to handle VAT refund claims directly from your smartphone. Be sure to review each app’s features and supported countries to choose the one that best suits your needs.

Conclusion

Claiming VAT refunds on purchases abroad can significantly reduce the cost of your shopping. By understanding the rules, shopping at participating stores, and preparing the required documents, you can navigate the process with ease. Whether you’re buying luxury goods or unique souvenirs, taking the time to claim your VAT refund ensures you get the best value for your purchases.