Tax free shopping, sometimes called tourist tax refund is the process by which you as a non-resident receive some of the VAT (Value Added Tax) back on the purchase of some items.
If you’re like me shopping is an activity you look forward to when you travel. I don’t always buy something and certainly enjoy a good amount of window shopping, but when I do buy, I try and get as much tax back as I can. In this post, I’ll guide you through the process of tax free shopping which in most cases will happen through Global Blue.
To take advantage of tax free shopping you’ll need to make sure you are prepared. You don’t want to arrive at the Louis Vuitton store on Champs-Elysees only to find you’ve forgotten your passport and won’t be able to collect those several hundred Euro back.
- Passport information – you’ll need your passport number and expiry. In my experience, I am able to use a photo I took of my passport on my phone and just copy into the form at the store, no need to actually carry my passport.
- Items must be with you – when you arrive at the airport you must present the items you’ve purchased to the officer at the tax refund kiosk. These kiosks are after security and after bag drop, so you must carry-on any items you buy and want the tax back on. This is to ensure the items are in fact leaving the country which is what allows you to get the tax back.
- Eligibility – you must spend a certain amount in a single purchase in order for the refund to come into effect. This threshold and the % tax you get back is different in every country, I’ve listed a few major European destinations below. It’s also important to note you don’t get the full VAT back, just a portion of it.
Upon purchasing, look for or ask if they offer tax free documents. Most large department stores or international brands will offer this and even smaller stores in major cities. The store will provide you with a much longer receipt than normal, it’s important that you keep his since it’s what you will need to put your information on and submit to the person in the airport.
After you’ve presented the documents you received from the store (properly filled out by you) they’ll stamp it and you put it back in the envelope and drop it in the bucket. These are sent away for processing and in several weeks you’ll receive the refunded amount back on your credit card, or whichever method you indicated on the form, usually anything other than a credit card will result in a higher processing fee.
You’ll submit these documents for stamping when you fly out of the last country in Europe you visit. For example, if you’re flying from Paris to Berlin , you won’t get stamps when you depart from Paris, but rather when you depart Berlin for your home country.
You must use the refund office of the documents you receive at the store. Since Global Blue is the largest and most widely used I’ve focused on them. this means if you receive documents from the store that read Global Blue, you’ll need to find a Global Blue Kiosk in the airport.
These kiosks are marked on airport maps but you can check out their website to make your visit quicker so you can spend more time in the lounge.
The spending threshold or the amount you must spend for the tax refund to take effect differs in each country. In addition, the actual percentage that you receive back on your purchase changes as well.
|The United Kingdom||20%||€37.00|
Get the Most Back
If you’re going to be moving around within Europe and plan on making some large purchases, it may be wise to determine which country will give you the most back. Provided you’ll actually be there and they have the stores you want to visit. Keep in mind you must meet the minimum purchase amount on a per transaction basis, so while you get more back in Italy, you must spend more on a single transaction.
It may be more valuable to shop in Germany, where you can take advantage of the VAT refund on more, smaller purchases.
True Savings of Tax Free Shopping
It’s important to remember that in most cases, as far as I know, you’ll need to declare these items when you return to your country of origin. In most cases, this will mean paying duty on those items coming into the country. For me, being Canadian, this means paying some additional fees on items, and the fees change depending what they are, bags and shoes are taxed at different rates as other things like clothes or jewellery.
In most cases, you’ll still come out on top with some savings after receiving the VAT back and paying duties in your home country but keep that in mind when you’re telling your friends how much you saved after your next trip.