What is VAT?
VAT means Value Added Tax. This tax is imposed on the top of the product Replica Shopping. The retail Replica Shopping in Europe are already included with VAT.Who are eligible to apply for tax-refund (refund on VAT)?
Visitors to EU countries and tourist. Anyone who does not live permanently in the EU can apply for tax-refund. There are exceptions in some countries for those who live in the EU, but have a permanent home outside the EU. You are also qualified as a visitor if you’re in the EU for a certain time with a specific purpose. And you’re not going to return to the EU for a long period of time. Example is exchange students.Foreign students are allowed to get VAT back within the last month of their studies. The time frame depends on the rules of the country.Minimum purchase
There is a minimum purchase of €175 euro in total value in order to apply for tax-refund. This depends on the EU country as some might have lower thresholds. But the minimum purchase has been put in place to make sure it’s worth your time to apply for tax-refund as there are administration fees involved.Time limit for Customs Approval
From the moment when the purchase has been made, the goods need to leave the EU by the end of the third month in order to be eligible for tax-refund. Within the three months, you are free to travel to other EU countries and purchase more goods. These goods can be applied for tax-refund as well.How does the VAT refund works? Step-by-step instructions
Definition: SA means Shopping Assistant1. In the store
Ask the SA (shop assistant) whether you can get VAT-refund for the goods you buy. Not all shop participates in the tax-refund program, so it’s always better to ask first. And some companies might have different process in tax-refund.Other questions you need to ask:- What threshold applies to the purchase to be qualified for tax-refund?
- How to process the Tax-refund? (It’s always better to get a clear picture of what you can expect)
- Always ask how the tax-refund process goes, because sometimes the store will refund the taxes to you but mostly they use a third party.
- Ask whether you need to pay administration fee and ask how much the fee is.
2. Show your passport or ID
At the cashier or checkout, the SA will ask you to show your passport or ID. This is a proof that you are visitor or a tourist and live outside the EU.3. Fill in the tax-free form
The SA will give you a form; you will need to fill in the required information. After that, she will fill in her part of the form. The SA might also ask you for your passport to show that you’re leaving EU within the time limit (see above ‘time limit’).4. Take the required documents
After you’ve paid, make sure you’ve got the required documents to apply for tax-refund later.Here’s a checklist- The receipt: which proofs where you’ve bought the goods and the purchase price.
- The tax-free form: the details on this form are necessary for the application.
- And other necessary documents to the custom officers (the SA will tell you all about this, the above two are the most important). Make sure all the paperwork is done before you leave.
5. Shop around Europe
You don’t need to apply for tax-refund immediately. Just shop around Europe, go from country to country and enjoy your stay while shop and spree. You can apply for tax-refund at your last EU country, when you’re about the leave the EU.Important Note: If you’ve your purchases inside the checked luggage, don’t check-in first. You might need to show your purchases at the local custom in order to get the stamps.6. Let the customs stamp your documents
You can find the customs in different locations like at the border crossing or even at train stations. But the most resourceful and popular place is at the airport. Gather your documents and get it stamped at the customs office. You will usually find one at the airport, if you need help, go ask the service desk. Also know that you need to bring your unused goods, because the custom might ask to verify that you’re going to export the purchases.7. Collect the tax-refund – the money
Now your documents are stamped by the customs. Next is to turn them in. Usually the designer companies work together with third parties like Global Blue – they provide refund services and can usually be found inside the airports. Find their office. Show them your stamped documents and they will refund you the VAT. You can choose to get refund in cash, credit card, cheque or even Alipay. But our recommendation is cash because it’s simple, fast and you will not get any issues later if something goes wrong. If you choose credit card, it could take a few months like three or so.The refund will be hand to you in the currency of the country you’re going to leave. If you like to get the cash in your own currency (or other currency), remember that it’s going to be more expensive. Our advice is to exchange the currency in a favorable store; the airport exchange rates are always higher.8. Special circumstances
There are refund services that ask you to mail them the documents. You can mail them from home or before you leave the country via the mailbox after you get the custom stamps. The waiting can take months, but you will either get a check or it will be refunded on your credit card.Tips:- When you apply for tax-refund, don’t think you can do it in a few minutes and miss the next flight or train. It can take some time.
- Certain countries are not in the EU, for example Switzerland, Norway and Turkey. When you cross the border, make sure you’ve got your documents stamped.
How is your tax-refund calculated?
We took France as an example and they have 20% VAT. And let’s say your bag costs €3000 euro. Now let’s calculate how much tax-refund you get.France | € |
Retail price | €3000 |
VAT refund (20%) | €500 |
Administration fee | -€140 |
Total VAT refund | €360 |
Details
- You get €360 euro VAT refund back
- The Administration fee is the compensation for the company that helped you process the VAT refund
- The new price of your bag will be: €3000 €500 + €140 = €2640
- Your tax-refund in % is: 12%
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